Strong brands survive and thrive
Strong brands do far more than win media plaudits and climb rankings such as this one. The value of a brand has a clear, measurable link with the share price of the company behind it.
Over the 13 years in which we have been tracking the BrandZ™ Top 100 Most Valuable Global Brands, the companies behind the top-ranking brands have far outperform stock market benchmarks. The value of the BrandZ™ Strong Brands Portfolio – a subset of the Top 100 that best exemplifies the building blocks of smart branding – has increased 196 percent between April 2006 and April 2019, outperforming both the S&P 500 and the MSCI World Index. (The MSCI World Index is a weighted index of global stocks.)
What that means is that $100 invested in 2006 would be worth $159 based on the MSCI World Index growth rate, and $228 based on the S&P 500 growth rate. But that $100 invested in the BrandZ™ Strong Brand Portfolio would be worth almost $300.
In difficult economic times, having a strong brand does not make a brand impervious to business pressures, but it can help lessen their impact. In 2008-2009, the most valuable brands in the world took a hit due the global economic downturn, but their value was somewhat protected. Their value did not fall by the same extent as other brands, and their recovery came more quickly as conditions improved.
And in the Netherlands, strong Dutch brands outperformed the AEX in the short term by 28 percent over the past year.