Slip, Slip, Sliding Away
Brand USA fading in key metrics
In addition to measuring the value of brands from the US, we can also assess the strength of Brand USA itself. The Best Countries ranking does exactly that, comparing perceptions of countries around the world held by a broad spectrum of consumers. Developed by WPP’s Y&R BAV Group, it surveys 21,000 people across 36 countries to understand how a nation’s policies, politics, and people are affecting its perceived standing in the world. It then ranks countries against a series of attributes—such as education, culture, and openness to business—all of which have the potential to drive trade, travel, and investment.
At #8 in 2018, the United States enjoys a robust standing in the world, where it is seen as a strong leader with an influential culture and a bright, innovative spirit. However, this is not the headline of the story for the past two years.
Most countries would be happy with the US’s high ranking, which places it ahead of well-regarded nations, like France and the Netherlands. However, the ranking also reveals some significant recent developments for Brand USA.
Because country rankings are based on a wide range of attributes and perceptions, they generally vary little from year to year. Perceptions of a country’s strength, friendliness, or cultural relevance are determined by slow moving factors that can only nudge a country in one or another direction over time. For example, even with the turmoil caused by Brexit, the UK fell only one rung in the rankings in 2018.
In two short years, however, the United States has fallen from #4 to #8. The country is slipping thanks to global dismay with recent developments, like country’s withdrawal from the Trans Pacific Partnership and the Paris Climate Accord. Add in its exclusionary policies, belligerent rhetoric on trade, and the terrible optics around its child separation policy, and the United States ranks poorly in how open for business it is (#45). It has also fallen steeply on trustworthiness (from #12 to #23) and political stability (#17 to #23).
To understand why, we need bring up the elephant in the room. Love him or hate him, President Trump and his administration’s policies are extremely unpopular around the world. A recent survey on business and political leaders by BAV found Trump’s global approval rating is only 25 percent, with 58 percent disapproving, for a net approval of -33.
This might not seem too bad, but most people do not have strong opinions—and especially not strong negative opinion—of other countries’ leaders. For example, the next least popular national leader is Rodrigo Duterte of the Philippines, who has carried out a violent anti-drug campaign that has indiscriminately killed thousands of people. He rates only a -11. As does Vladimir Putin. That makes Trump by a wide margin the least popular leader in the world.
The Trump effect on Brand USA has been profound. Once seen as a reliable, stable partner, it is now increasingly watched with worry, with many feeling it is no longer welcoming and likely to spin out of political control. While the United States still has an enviable brand with many positive attributes, it is also slipping downward at a fast rate—and brand managers should keep a close watch on this moving forward.
The Trump non-effect on US brands
Historically, there has been a close relationship between how people feel about a country, and their attitudes towards the brands they associate with it. Strong countries fuel strong brands, and vice versa.
If the BrandZ Top 100 US Brands ranking shows anything, it’s that the best American brands has shown little damage from the Trump effect and continue to benefit from the country’s strong international standing. With record high brand valuations and an encouraging increase in Brand Value across the board, the importance of building a Meaningfully Different brand couldn’t be clearer.
This is likely reinforced by the fact that the current policies of the US have been rejected by many Americans, and many have been met with furious protests. Many brands have also weighed in against them, stepping off the sidelines and highlighting their more inclusive values.
The US by the numbers
On the bright side, the United States is still #1 when it comes to power, and it is seen as particularly strong through its military, alliances, and economic influence. Although it may nominally be going “America First,” in practice it is heavily involved around the world, and consumers rated it as the most influential nation.
It is also, not surprisingly, seen as an innovator. As the birthplace of Silicon Valley and home of many startups with ready access to venture capital, the US scores well when it comes to entrepreneurship, where it ranks #3, behind only Germany and Japan.
As you might expect, the US is a cultural force to be reckoned with. It is the birthplace of jazz, the home of Hollywood, and a trendsetter in everything from music to fashion. Around the world people wear baseball caps and blue jeans, both iconic American symbols. They perform hip hop in almost every language and go on Facebook and YouTube daily. As a result, the US scores well in culture, trailing only Italy and France, which enjoy much longer and richer cultural traditions.
Education is another bright spot for the United States. With a mandatory public education system that sends 70 percent of its students to college and a post-secondary system that includes 8 of the world’s top 10 universities according to BAV, it ranks at #2 in the world, behind only the United Kingdom.
The country’s more challenging rankings come with things like “Adventure” and “Open for Business.” Given the tone of American discourse, this is hardly surprising. Among other things, Adventure measures how fun and friendly a country is, while Open for Business looks at the cost of manufacturing, corruption, and government transparency. Both measures have been influenced by trade and immigration policies that have turned sharply isolationist, and even in some instances unduly harsh.
Of course, any country can turn around its rankings, and given how reservations about the US seem tied to policies that are set by executive fiat, it’s likely that if such policies were changed, these perceptions will not prove durable.
The value of strong national brand attributes
Impressions of a country matter immensely to brands because the feelings people have about a place are projected onto the brands that come from there. This, in turn, affects what people are likely to buy, and how much they’re willing to pay for it.
We certainly will pay more for wine and cheese from France than we do, in general, from Portugal or Chile. Likewise, if a new technology product comes from Silicon Valley, we’re more open to its consideration and purchase. We travel to have fun in Brazil and to soak up food and culture from Italy. Each country’s brand influences a product’s perception, especially if it is new or unusual to us.
And just as countries perform an ambassadorial role for the brands they’re home to, brands also perform the same role for their home country. Samsung has helped reshape international views about South Korea, for instance, Sony has done the same for Japan and Japanese products. The reason American technology products and services sell so well around the world is because companies like Apple, Facebook, and Google have profoundly changed how people live.
How Do We Measure a Country?
The Best Countries 2018 ranking incorporates the views of more than 21,000 individuals surveyed in 36 countries in four regions: the Americas, Asia, Europe, and the Middle East and Africa. These people included a high proportion of “informed elites” – college-educated people who keep up with current affairs – along with business decision makers and members of the general public.
Respondents are asked about the 80 countries that feature in the 2018 ranking; between them, these countries account for about 95 percent of global Gross Domestic Product, and represent more than 80 percent of the world’s population.
People surveyed for Best Countries are asked how closely they associate 65 attributes with a range of countries. These attributes are then grouped into eight categories, which are used to calculate the Best Countries ranking:
The 8 elements of a country’s brand
Adventure: a country is seen as friendly, fun, has a pleasant climate, and is scenic or sexy.
Citizenship: it cares about human rights, the environment, gender equality, is progressive, has religious freedom, respects property rights, is trustworthy, and political power is well distributed.
Cultural influence: it is culturally significant in terms of entertainment, its people are fashionable and happy, it has an influential culture, is modern, prestigious and trendy.
Entrepreneurship: it is connected to the rest of the world, has an educated population, is entrepreneurial, innovative, and provides easy access to capital. There is a skilled labor force, technological expertise, transparent business
practices, well-developed infrastructure, and a well-developed legal framework.
Heritage: the country is culturally accessible, has a rich history, has great food, and many cultural attractions.
Open for business: manufacturing is inexpensive, there’s a lack of corruption, the country has a favorable tax environment, and transparent government practices.
Power: it is a leader, is economically and politically influential, has strong international alliances and a strong military.
Quality of life: there’s a good job market, affordable living costs, it’s economically and politically stable, family-friendly, safe, has good income equality and well-developed public education and health systems.
Each of the eight measures is given a weighting in its contribution to the total score for each country, as follows.
Top of the world
Switzerland tops the ranking as it is highly regarded for its citizenship, openness for business, and for providing an environment that encourages entrepreneurship. It offers its citizens a high quality of life and is quite culturally influential. All of the other countries in the top five also score highly across all of these measures. Canada is especially strong on the citizenship measure. Germany has a similar Best Countries profile to the UK, though Germany is stronger on entrepreneurship and is seen as offering a better quality of life. Japan’s greatest strength is also entrepreneurship, but it also scores highly across all the other measures.
Being the best they can be
While the decline in Brand USA may be striking, the positive aspects of the brand still resonate with global consumers. US brands can make most of what their country brand already represents in the minds of international consumers, and at the same time contribute to what “Made in the US” means. Brands can use their country of origin to greatest effect when they align with values and positive attributes already associated with that country.
A focus on the following attributes will ring true to international consumers:
The United States is a vibrant cultural leader especially with beloved music, TV, and movies. Brands that lean into cultural trends, and emphasize their fun, humor, and glamor stand to benefit from association with US culture. The worldwide popularity of hip hop, the new global look of American movies, and the vast interest in its high budget television production all offer opportunities for brands to connect meaningfully around the world.
The US Top 100 is dominated by technology brands, a fact reflected by the large number of tech brands that have become household names around the world. Globally, consumers expect innovation from US brands, which can then place a premium on products that the country’s heritage in technology. Brands that can lean into the customer experience and incorporate new technologies like IoT and AI in their products and services will likely see outsized rewards at the cash register.
The US ranks more highly than any other brand when it comes to power, a measure of both military strength but also the strength of its economy and global connections. Likewise, its brands are often viewed as globally influential forces in their own right. Those that can take the positive perception of leadership and marry it with the aspirations of their audiences should do well in the minds of international consumers.
While the US scores poorly as a “mover” overall, this is likely due to the fact that the it is a country whose inventions often flow easily to other parts of the world. The distinct productions of American culture, like fast food and hip hop, or Facebook and Google, have been quickly assimilated in places like Germany and Thailand, making them seem less exotic. Nonetheless, America is seen as a highly dynamic place, where movers and shakers thrive. Brands that can capture the excitement of change will find that it works well with global consumers.
Few people see the US or US goods as affordable, but the US ranks well on measures of prestige. Consumers believe that while US goods might be expensive, but that their premium pricing is justified, and this helps explain the strong predisposition to buy American. The iPhone X is the last thing from a bargain product, but it was well received around the world. So while US brands are not cheap, they represent a good value for money and are often purchased over similar, less pricey options.
About Best Countries
Best Countries was developed by WPP’s Y&R BAV Group, and The Wharton School of the University of Pennsylvania, with U.S. News & World Report. The ranking is revealed each year at the World Economic Forum in Davos, the world’s largest gathering of global leaders and heads of industry and influence. For more detail visit: https://www.usnews.com/news/best-countries.