Highlights | Tough year hits Australian brands’ value
Tough year hits Australian brands’ value
Australia’s strongest brands worth nearly US$97 billion
The leading 40 brands in the country have a combined brand value in 2019 of US$96,783 million – a decline of 5 percent over last year’s ranking. The dip reflects a tough year for brands in many sectors, with banks and other service providers’ values hit especially hard by a combination of falling share prices, industry-wide pressures and, in some cases, a loss of consumer confidence.
Commonwealth Bank leads ranking
The nation’s banks are the greatest contributors of brand value to the Top 40, with seven banks contributing 47 percent of the ranking’s total value. They are led by the Commonwealth Bank of Australia, valued at $15,993 million this year – around 50 percent higher than second-placed ANZ, but still 3 percent lower than a year ago. Banks overall have lost 14 percent of their brand value in the past year; Commonwealth Bank’s comparatively strong brand has helped insulate it from the depth of the declines seen more widely across the sector.
Bunnings posts sizzling growth
The DIY chain known as much for its charity sausage sizzles as for its extensive range and store network is this year’s fastest-rising brand, up 46 percent in brand value. Bunnings is an outstanding performer on all BrandZ measures of strength, and is much loved by consumers. It is one of just seven brands to rise in value this year, and the only one to post growth of over 10 percent.
Banks have serious work to do
As if the public drubbing at the Royal Commission wasn’t enough, Australia’s top banks have lost almost $6 billion in brand value in the past 12 months. The “Big Four” have lost the most in dollar value, but banks generally are seen in a very poor light by consumers. Not only are they the least-trusted of any product or service category, they’re viewed as being dishonest, uncaring and arrogant – and they lack dynamism and uniqueness. Banks around the world often struggle to win consumer love, but in Australia, they’re seen as the lowest of the low. This is a far-from-complementary picture, but it does clearly identify where banking brands should focus if they want to stand out and change opinions.
Bumpy ride for services sector
There are 18 services brands that are common to the 2018 and 2019 rankings; none has fared particularly well, with the average loss of brand value at 14 percent. Pay TV provider Foxtel has been hit by a surge in competition, insurers have been, to some extent, caught in the crossfire of the banking Royal Commission, and restructuring in the telecommunications sector has had a deep impact on Telstra and Optus. Food (including fast food giant Hungry Jack’s) and retail – driven by the huge rise in brand value of Bunnings – have been stronger performers this year.
Strong brands are built on trust
This is not about banks, although of course it applies to them, too. In fact, the need for trust as a foundation stone to building a strong brand applies to every category, and in no market is this need more profound than in Australia. Yet consumers looking for brands they can trust go largely disappointed, with low levels of trust across most categories – even among the brands that make the Top 40. The good news? Brands that gained value this year are far more trusted than those that declined, which shows it pays for brands to give people reason to believe.
Creativity can help fill the innovation gap
BrandZ data both in Australia and in other markets shows that when brands are innovative – and consumers regard them as being innovative – the effect on brand value can be tremendous. The problem is that few brands in Australia are seen as especially progressive on this measure and there is a clear innovation gap between the most valuable brands here and overseas. One of the most effective ways of combating this is to focus on a specific aspect of innovation: creativity. This is an attribute that can shift consumer perceptions and drive brand value, but one that top brands in Australia perform poorly on compared to leading brands in other markets. This is a clear opportunity for improvement.
Opportunity knocks for brands with global vision
Leading brands in Australia generate less of their revenue from overseas markets than do brands in any of the other 12 markets in which BrandZ rankings are published; only three brands have the majority of their exposure overseas: Foster’s, QBE and TNT. Global research from the Best Countries annual study, conducted by WPP sister agency BAV, shows that consumers around the world express a preference in many categories for “Made in Australia” products – but that exports aren’t keeping pace.
Top learnings for marketers
1 A healthy brand is a more valuable brand
There’s a compelling correlation between the BrandZ measure of good health, what we call vQ, and strong brand value. Brands with high vQ scores grew in value at 8 percent this year – far outperforming the ranking’s average. And this year’s Australian ranking shows that health isn’t predetermined by the business sector in which a brand operates. The healthiest brands this year are highly diverse – including Australia Post, Qantas, Westfield and Woolworths – showing that when brands give themselves a workout, they can build up brand muscle in the right places to deliver value.
2 Have a mission, promote it, and deliver on it
The brands that have a strong purpose beyond what they produce or deliver every day are viewed more favorably by consumers, and ultimately generate stronger value growth. A brand’s purpose must be more than a PR statement, and it must be evident in every experience a consumer has of a brand. Have a genuine mission to do something for the greater good, articulate that purpose clearly and effectively, and ensure it’s clearly seen as part of the brand’s DNA.
3 It’s vital to be different, in a way that benefits consumers
Being different to other brands is one way of standing out from the crowd, but it’s important that what sets a brand apart is seen as important to the people it’s targeting. We call this “Meaningful Difference” and it’s this that makes a difference to success in the market and a rise in brand value. In the Top 40, the more Meaningfully Different brands are typically more valuable. The fastest risers and new entrants to the ranking this year are more Meaningfully Different than average brands.
4 Any brand can be innovative
Creative disruption isn’t just the preserve of startups and tech brands; the most innovative brands in the Australian Top 40 range in age from just two years old (Afterpay) to more than 200 years (Australia Post). And they’re providing products and services as diverse as telephone connections and Tim Tams. What marks them out is their ability to evolve both their offering and their communications so that they feel relevant to customers’ lives today. There are three elements to innovation: creativity, leading the way, and shaking things up. Creativity is where most Australian brands fall short.
5 Trust is vital – and it’s the basis of brand love
Australian brands will read plenty in this report about how consumers in this market yearn for brands they can trust – and so often feel let down. But why should brands work hard to rectify it? Because trusted brands tend to be recommended more, which is a key route to success in the social media age. There’s also a strong correlation between those brands that people trust, and the ones they fall in love with. Love matters not just because every brand wants to be loved, but because love can sustain a brand in the mind of the consumer in the times when it’s not announcing new products and innovations.