New BrandZ™Vital Signs Index diagnoses brand health
North American brands—all from the US— drove the value growth of the BrandZ™ Global Top 100 Most Valuable Global Brands 2017, continuing a long-term trend. The North American Top 10 increased 12 percent, compared with a 9 percent rise for the Asia Top 10, followed by the Continental Top 10, with an increase of 4 percent, and a decline of 4 percent for the UK Top 10.
Variations in regional value change resulted from several factors, including geopolitical and economic issues and the mix of categories in each region. In addition, regional value change correlated with overall brand health, according to BrandZ™ analysis using a new brand diagnostic tool called the Vital Signs Index.
Five of the North American Top 10 are technology category brands. Facebook, , rose 27 percent in value. Two business-to-business technology brands, Microsoft and IBM, rose 18 percent. In addition, Amazon, which BrandZ™ ranks in the retail category, increased 41 percent in value.
Similarly, technology brand performance influenced the value rise of the Asia Top 10, led by the 27 percent value increase of Tencent, China’s most valuable brand, and a 23 percent increase by Samsung, a South Korean brand. Alibaba, which BrandZ™ ranks in the retail category with Amazon, rose 20 percent.
Technology also affected the value increase in the Continental Europe Top 10, with a 16 percent rise in SAP, the German business-to-business brand. Europe’s results were aided by the 18 percent rise of Hermès, the French luxury brand. In contrast, the UK Top 10 includes no technology brands, but several global banks and telecom providers, categories that have experienced limited value growth.
Only four Latin American brands are included in the BrandZ™ Top 100 Most Valuable Global Brands 2017. They all are beer brands. And although each increased significantly in value, led by a 34 percent rise by Brahma, the Brazilian brand, Latam makes less of an impact on the BrandZ™ Global Top 100 because of the relatively low value of the individual Latam brands.
US contribution rises
In 2006, 54 US brands produced 63 percent of BrandZ™ Global Top 100 value. In 2017, 56 US brands produce 71 percent of Global Top 100 value. Over those 12 years, the contribution of US brands to the Global Top 100 increased 181 percent.
Twelve years ago, only one Chinese brand—China Mobile, the state-owned telecommunications brand—ranked in the BrandZ™ Global Top 100. Since then, the number of Chinese brands ranked in the Global Top 100 has increased from 1 to 13, and the contribution of Chinese brands has rocketed up 937 percent.
Other Chinese state-owned enterprises (SOEs) subsequently joined the ranking, including bank, insurance, and oil and gas brands. With the shift to more open competition in China, additional consumer-facing Chinese brands joined the ranking, including Tencent, the internet giant that this year ranks No. 8 in the BrandZÔ Global Top 100.
Along with technology category performance, brand building plays an important part in the value growth of the US and Chinese brands. The brands in the US and China Top 10 are relatively young, founded, on average, in 1976, compared with 1928 for those in Continental Europe and 1935 for the UK. Most important, these brands exhibit robust health.
The US far outscores all regions in brand health, according the new BrandZÔ Vital Signs Index. A measurement of brand health, BrandZ™ Vital Signs assigns a composite score to brands based on their scores in these aspects: Brand Purpose, Innovation, Communications, Brand Experience, and Brand Love. An average score is 100.
The BrandZ™ US Top 10 score 122 in BrandZ™ Vital Signs, compared with the Vital Signs scores for the BrandZ™ Top 10 in these countries and regions: China, 112; Asia (excluding China) 105; Continental Europe, 109; and the UK, 103. The US outscores each of these countries and regions in each of the five aspects of the BrandZ™ Vital Signs.
These aspects work together most effectively on a foundation of Brand Purpose. Innovation, built on a foundation of Brand Purpose and effectively communicated, can produce great Brand Experience and result in consumer Love of the brand. Most important, a high Vital Signs score also produces Meaningful Difference, an important competitive advantage.
Brands viewed by consumers as Meaningful (filling rational and emotional needs in relevant ways) achieve greater market share, and brands perceived as Different (trend setting and distinctive) can command a higher price premium. The BrandZ™ US Top 10 score 146 in Meaningful Difference.