Fast-growing brands

Michael Alan Hamlin

Posted on October 2, 2006

Ultimately, it’s recall

The world’s two foremost brand consultancies, Omnicom’s Interbrand and Young & Rubicam’s Landor Associates (Y&R itself is a division of WPP Group), recently published the results of their annual brand surveys. As usual, there was not much movement at the top, a space chronically dominated by Coke, Microsoft, IBM, GE, and Intel. In fact, the most notable quality of the top five global brands in the Interbrand survey may be that three declined in value last year (Coke, Microsoft, and Intel).

More meaningful insights – in terms of what resonates in our evolving global marketplace – are provided by fast-growing brands. In evaluating brands in general and fast-growing brands in particular, Interbrand focuses on annual growth in brand equity. Landor Associates takes a mid-term view of fast-growing brands, evaluating them over a three-year period to provide a sense of sustainable growth. Interbrand, which undertakes its study in partnership with BusinessWeek, provides substantially all its results on both the BusinessWeek website and its own.

Landor is more parsimonious with its harvested knowledge, but provides a summary of results in the form of a news release on its website. FORTUNE magazine also provided a brief write up in the September 18 issue of the magazine. It’s interesting to compare Interbrand’s list of top-growing brands for 2006 with Landor’s top-growing brands for 2004-2006.

Before that, in case you hadn’t already guessed, there’s no scientific basis for comparing the lists. Aside from the timeframe (Although Interbrand data for three years is also available.), the Interbrand survey covers top global brands while the Landor survey examines top brands in the U.S., and the methodologies vary. For example, brands in the Interbrand study must derive a third of their revenues outside of their home countries, make marketing and financial data publicly available, and be recognizable outside their customer base.

Landor has its own metrics, including differentiation, relevance, esteem, and awareness. Both firms try to calculate the financial contribution brands make to market value, but do this in different ways. Finally, both Interbrand and Landor eliminate some companies and even whole industries that they consider too difficult to evaluate for a variety of different reasons.

So what’s the point of the surveys, you might ask, and of spending time comparing their results? Primarily, it is that while brand equity may seem nebulous, it is even more strategically important in an age characterized by consumer empowerment, if not downright dictatorship. But it also shows that perception of brand value is an imprecise science, which makes trying to get branding right a scary undertaking.

A quick scan of the top-ten fastest-growing lists for both studies provides a couple of immediate impressions. First is that technology-driven consumer services do well on both lists. Interbrand ranks Google number one, eBay three, Motorola four, Yahoo eight, Apple nine, and LG – the only Asian company on the list – ten. But enabling technologies play a much reduced role in the Landor list. iPod is number one. eBay comes in at the bottom.

The non-technology-driven companies on the Interbrand list are just four: Starbucks, Hyundai, BMW, and boring old UBS. Such companies dominate the Landor top-ten, and include Viking, Converse, Robitussin, Best Buy, Kohl’s, French’s, Geico, and Dove. This deep contrast in two studies meant to identify fast-growing brands in a fast-globalizing world gives pause.

In its press statement, Landor said its “strategic experts conducted additional analysis” of the top-ten fast-growing brands, “and found that each enhanced their dialogue with customers by embracing one or more” of three trends. Two of the three trends are distinctly and overtly “touchy-feely.” The first is “building on a foundation of trust.” In more palpable terms, read, “Deliver on the value proposition.” No brand can be sustained without doing so.

The second trend is “cultivating brand communities.” Landor explains, “leadership brands capitalize on the basic need for human connection by allowing enthusiastic customers to borrow the brand image to express a collective voice.” At first, I thought the experts might be referring to Xerox, as in “Please Xerox this document,” but Xerox as a company is in the brand graveyard. Then I thought Google, as in “Have you Googled him?” But Google’s not on the Landor list. So it must have something to do with iPod. I can’t imagine Robitussin as an expression of collective voice.

Finally, Landor’s experts say some brands empower customers with knowledge, by providing knowledge. This is tricky too, and I’m assuming it refers to transparency of some sort. But I have difficulty understanding how much educating Dove can do. FORTUNE believes Viking, a manufacturer of high-end kitchenware, fits here because it opened a chain of cooking schools: “the classes reinforce the simple pleasures of sharing meals with loved ones.”

One thing is certain when it comes to fast-growing brands: brands recalled when a purchase is contemplated come out on top.

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