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Global 2015: THOUGHT LEADERSHIP | BRAND VALUE

Brand valuation and insights critical for success in a changing marketplace 

They drive sales, grow market share and build shareholder value 

Brand is among the most valuable financial assets of modern corporations. Brand contributes more to shareholder value creation than any other asset – tangible or intangible. Strong brands help drive sales, grow market share and build shareholder value. They’re a key to the success of many of today’s leading stock market winners.

Valuable brands deliver superior return to their shareholders. We matched a portfolio of brands from our BrandZTM Top 100
Most Valuable Global Brands against the performance of the S&P 500 over the past 10 years. The BrandZTM portfolio grew by 102.6 percent, substantially outperforming the S&P 500 Index, which grew only 63 percent.

As revealed in this 10th Anniversary of our BrandZTM Top 100 Global ranking, market disruptions and changing consumer
attitudes about consumption and corporate responsibility will make building and sustaining strong brands vital over the next decade. In this new normal, measuring Brand Value and mining the rich insights embedded in those valuations also are becoming even more important. We see examples every day.

  • - An IPO raises record funding based on past performance and future promise. But soon after the IPO, the stock weakens. How does an entrepreneur restore the brand to its upward trajectory?
  • - Acompanymakesasubstantial investment to expand its brand. But brand isn’t a static mission statement. Brand becomes fully formed only when it’s activated. How does a company motivate the entire organization to align behind the brand?
  • - It’stimetopursueamergeroracquisition. How does a company assess the value
    of the potential purchase? And after the purchase, how does the company quickly understand how the brand is perceived

    in the minds of consumers worldwide, country-by-country?

    Impact on sales, bottom line, shareholder value

    The answers to these questions affect sales, the bottom line and shareholder value. Consider Alibaba. The Chinese e-commerce giant achieved a record IPO and entered the BrandZTM Global Top 100 for the first time

this year, rising immediately to number 13 and passing Walmart and Amazon to reach the top of the retail category. But soon after its IPO, Alibaba’s share price weakened.

Consumer insights based on BrandZTM data could help reverse this trend, as indicated
by the example of another Chinese Internet company. Autohome is the leading online automobile news, social media and purchase site in China, providing independent and interactive content to automobile buyers and owners. Its IPO raised $120 million. After the IPO, the CEO decided he wanted to focus

on shaping the business to meet the future needs of existing and new customers.

Based on BrandZTM research and findings, the Autohome board decided to expand into e-commerce and the used car business with an aligned brand vision, summarized as “Lead everything auto.” Revenue year-on-year increased by 82.1 percent to $100.5 million for the first quarter of 2015, and Autohome’s share price increased 72 percent.

Now that Autohome has expanded its brand, how can it align the brand through the organization? First inspire people
with the brand and its purpose. Then, incentivize people to enthusiastically and consistently implement the brand. Several of the BrandZTM Top 100 Global brands, in North America, China, and India, already use BrandZTMmetricsasanobjectivebonusKPI to systematically measure and reward brand implementation.

Unparalleled view of consumers

BrandZTM data also helps companies assess potential mergers and acquisitions. The BrandZTM valuation authoritatively quantifies the financial value of the target company’s most important intangible asset, its brand. In addition, BrandZTM data provides an unparalleled view of consumer attitudes about the brand, which is priceless knowledge to have both before and after a merger or acquisition.

The importance of understanding, and strengthening, consumer perception can’t be overstated, as the Apple experience suggests. Consumer belief in the brand sustained Apple as its share price weakened after the death of its founder Steve Jobs. Brand strength provided the space for the company to recover and return with a burst of creativity in the form of iPhone 6, Apple Watch and Apple Pay, which drove a 67 percent gain in brand value and propelled Apple to number one in the BrandZTM Top 100 Most Valuable Global Brands 2015.

The key to achieving and sustaining brand strength at the level that’s required to compete successfully today requires access to the best big data, to insightful analysis that flows from that data, and to the creative talent that can transform the insights into communicating big ideas. And that is ultimately the power of BrandZTM.

Voice of the consumer

The valuations in this BrandZTM Top 100 Most Valuable Global Brands report are based on the BrandZTM methodology, which is explained in detail in the resources section at the end of the report. To understand why BrandZTM can most accurately measure brand value and provide rich customer insights it’s important to understand these two points:

1. Big data. BrandZTM has over 4.5 billion data points. On an ongoing basis we look at 10,000 brands across over 30 country markets. Our data includes over two million in-market quantitative consumer interviews.

2. Consumerview.Likeanybrandvaluation methodology, BrandZTM begins with financial information. But we uniquely combine the financial data and our consumer research to calculate the final brand value.

The rich data that provides the basis for brand valuations also forms a uniquely deep and broad reservoir of consumer attitudes at any given time, in just about any place
in the world. This is the kind of knowledge and insight that can help guide performance of an IPO, activate brand throughout an organization and evaluate a potential merger or acquisition.

This data can be mined and analyzed for insights about categories, competition, generational values changes, just about any information necessary for brand building. And all of this proprietary knowledge is available to WPP companies and their clients to craft winning brand propositions, create and implement impactful communications, and build strong and valuable brands.