Google crowned strongest global company brand in the 2014 FutureBrand Index; Microsoft ranks #2

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new-google-logo-knockoff.jpgGoogle is the strongest brand among the world’s most valuable 100 companies in 2014, performing better than peers with a higher market capitalisation.

The ‘FutureBrand Index’ from brand consultancy FutureBrand, sanctioned by Global Top 100 Companies creator PwC, measures perceptions of brand strength through in-depth quantitative research among thousands of consumers worldwide.

Fotor070275038.jpgGoogle, followed by Microsoft at position two and Walt Disney at position three each open a positive ‘Cap Gap’ on the positions they occupy by virtue of their financial worth (third, fourth and 40th positions respectively).

Moving in the opposite direction, Apple falls from first to fourth place and ExxonMobil from second to 87th. ExxonMobil is one of the three largest fallers, the others being PetroChina and Wells Fargo (falling 79 places and 72 places respectively). AbbVie, SABIC, and MasterCard are the three greatest risers (rising 80, 72 and 67 places respectively).

Says Tom Adams, global head of strategy at FutureBrand: “Companies are also brands and our results show for the first time the extent to which the strongest in 2014 are able to transcend the positions dictated by opinions of their financial worth; opinions which in any case are formed largely by financial institutions. We felt it was high time for a reappraisal of how company brands are perceived in the round, which takes full account of the affinity felt by consumer stakeholders for their stated purpose and the experience they deliver, to establish a richer perspective on which ones are best positioned to thrive into the future and why. We might even ask if the strongest company brands are undervalued financially, brand perception being a key determinant of the billions of decisions that inform a company’s prospects, from which employer to work for, to whether to buy a product at the given price premium. Crucially, purchase decisions today are guided by knowledge of parent brand reputations, as recent Weber Shandwick research found1.

“Google is the clear leader on such measures, but a special commendation goes to the greatest risers who have really grasped the importance of building a strong company brand to confound expectations of a negative Cap Gap. These include non-direct-to-consumer brands, such as Intel (6, up 43), Unilever (9, up 43) and Inditex (25, up 62), brands operating in a sector that doesn’t prioritise brand spending, such as SABIC (13, up 72), or brands suffering by association with a sector with a poor image, such as EcoPetrol (38, up 57). Their example of gaining competitive advantage through differentiation along various relevant vectors is a beacon for the companies for whom ‘Cap Gap’ perhaps has negative connotations.”

The other main findings:

    • The research identified a four-fold company brand typology: ‘Future Brands’, ‘Experience Brands’, ‘Purpose Brands’ and ‘Corporate Brands’. Only Future Brands score highly on both purpose and experience measures, most consistently thought leadership, innovation and authenticity. This balance between purpose (why a brand is here) and experience (what it does) is shared by the brands that the research discovered a large majority of the public would like to work for and buy from, moreover at a price premium. Future Brands typically exhibit a positive Cap Gap whilst Corporate Brands exhibit a negative one

    • Some sectors perform more strongly than others in ‘The FutureBrand Index’ and the Cap Gap follows distinct sector lines. For example, financial and oil and gas companies tend to dominate the top 30% by market capitalisation, but largely appear in the bottom 30% by strength of brand perception. Conversely, technology and consumer services and goods companies dominate both the FutureBrand Index top 10 and the market capitalisation rankings

    • Spider diagrams showing how sectors perform on average against the 18 experience & purpose attributes resemble closely the spider diagrams describing each sector leader, except in Consumer Goods, Oil & Gas and Consumer Services, where notable differences exist between the leader and the sector average

    • Awareness isn’t everything: Notable by their absences from the top 20 are McDonald’s (51) and Coke (22) who, despite a positive ‘Cap Gap’, are outperformed in brand strength by companies with lower household awareness and no synonymous product-company ties, e.g. SABIC (13, up 72) and Gilead (19, up 27)

    • The best company performers tend to be genuinely global, including most of the top 20 in our ranking. This ensures large but more parochial Chinese firms in particular suffer a negative Cap Gap whereas their East Asian counterparts such as Samsung and Toyota, which genuinely address global markets, are boosted and insulated by a strong reputation. However our ‘ones to watch’ forecast (which excludes those already classified as Future Brands) finds two of the eight organisations seen to be ‘moving forward’ in three years’ time are Chinese: ICBC and Tencent

    • Half of the most future-oriented brands in the ones to watch forecast (a list led by Pfizer) are not even in the current top 20 by market capitalisation. The key to these companies’ progress in the FutureBrand Index and Global Top 100 Companies by market value will be how well they attend to the balance of purpose and experience, to ensure they are not just financially strong and secure across markets, but that they are the kind of companies people want to work for, and for whose products and services they are prepared to pay a premium

Says Clifford Tompsett, capital markets partner at PwC, who made the Global Top 100 Companies by market capitalisation ranking available for FutureBrand’s research: “Organisational perception and reputation are vital ingredients in corporate success in the capital markets and beyond. This study presents a fascinating alternative view of the Top 100 Companies by market capitalisation and the levers the world’s leading organisations might pull for even greater competitive advantage in the minds of the informed global public.”

The full report, ‘The FutureBrand Index’ can be downloaded here.

The PwC report on which it is based can be downloaded here.

1. Weber Shandwick’s 2011 report ‘In Reputation We Trust’ found: “Corporate Brand is as important as Product Brand” – http://www.webershandwick.com/uploads/news/files/InRepWeTrust_ExecutiveSummary.pdf.