Tag Archives: Interbrand

New measure of success challenges traditional brand valuations

Measures of a brand’s power can differ dramatically, depending on performance criteria.

A new success index believes that in an increasingly connected world, traditional measures of brand equity are outdated. Criteria like social media strength can be overlooked and under-rated.

The D100, a new brand index from a division of a global advertising agency, believes that some strong brands are less meaningful, while others are not receiving the recognition they deserve.

IPG Mediabrands, the media holding arm of Interpublic Group (NYSE:IPG), in partnership with Jonah Berger, Associate Professor, The Wharton School at The University of Pennsylvania and New York Times best-selling author of Contagious: Why Things Catch On, has launched the inaugural D100, ranking the 100 most dynamic companies in the world using new world metrics.

USA

screen-shot-2016-10-16-at-11-44-17-am

 

The D100 marks the first time that brand success is measured with “new world” metrics, specifically:

  • AGILITY: the degree to which brands adapt to changing market conditions.
  • RESPONSIVENESS: the degree to which a brand listens and responds to customer needs and feedback.
  • INNOVATION: the degree to which brands leverage new technology and creates innovative products and services
  • SOCIABILITY: How large and engaged a brand’s audience is on social media.

Global

screen-shot-2016-10-16-at-11-45-07-am

 

Counter-Intuitive 

There are some notable disconnects within the D100, whose ranking can be viewed nationally or globally. For example, Ben & Jerry’s ice cream, has a dynamic score of 59.89, ranking it 20 globally. Its USA score is just 94. Fitbit is 15 globally, with a 62.75 D rating, and just 62 in the USA.

BMW is ranked 7 globally, 16 in the USA and a lowly 99 in Germany.

Each one of these surprises raises questions about methodology and value.

Germany

screen-shot-2016-10-16-at-11-45-42-am
It is interesting to compare the D100 top 10 with InterBrand’s and Forbes’. They are somewhat similar with a few surprises. Those rankings focus more on value. When we get farther down the list we begin to see more significant disruption. Rather than focus on corporate brand, the D100 metrics places more emphasis on brand names associated with specific products.

A branded product may have greater performance value at a given point in time than say an established corporate brand, which may have a high financial valuation.

InterBrand

screen-shot-2016-10-16-at-11-55-01-am

 

To see the global D100, as well as some national rankings, go here. (Tap on the upper right of the screen to pull down the menu.)

UK-based InterBrand’s ranking valuation-oriented brand rankings can be seen here.

Forbes’ top 100 brand values can be found here.

Forbes Top 100

screen-shot-2016-10-16-at-12-00-44-pm

1,200+ Brands Examined

To construct the D100, over 10,000 consumers were surveyed across four global regions in five major markets including the United States, United Kingdom, Germany, China, and India. Consumers were asked questions on both global brands and market specific brands; in total over 1,200 brands were examined.

Image source: various websites associated with indices

Leading Brands Increasingly have the Most Valuable Patents

Patent portfolios associated with strong positive reputation appear to enjoy better performance, or so it seems.

It is no coincidence that many of the world’s best known and most valuable brands have other IP traits in common: Their reputation for quality, innovation, and consistency not only facilitates product sales and shareholder interest, but to enhance the value of their patents, trade secrets and authored content.

At the same time known expertise in securing and managing intellectual property rights and handling patent disputes (e.g. Microsoft (5), IBM (3), Intel (8) and Philips (41)) can add value to overall brand reputation. Good patents held by high-profile brands often appear to be worth more.

It is clear that the reputation of high-value brands for quality and reliability can help to a good patent portfolio to perform even better.

Interbrand’s “best brands” survey for 2012 includes many of the usual world-class names. Note how many of these brand giants are also patent powerhouses in their own right. Nine of the top ten have significant portfolios, and at least five out of the top ten very large ones. For 2012’s top 36 brands see the chart below. For the 100 best with an explanation of each, click here.

*     *     *

In an article for Managing Intellectual Property that I wrote in 1998 with Dr. James E. Woods, an economist, we suggested that associating patents and patent strategy with positive reputation frequently results in enhanced value both for the patents and trademark. A well-known business brand that does not hold least some relevant patents and a strategy to generate return on them, is likely leaving value on the table.

Smart companies are learning how to use brand equity and reputation to leverage their reputation for innovation and importance of their invention rights. Perceived value plays a significant role in intellectual asset management, and a strong brand can make a good patent portfolio even better. Valuable IP rights, notably trademarks and patents, feed off of each other.

Intel Inside® was part of an aggressive advertising campaign launched by Intel (8) in 1991 to stimulate demand for its (patented) Pentium® processor. Whether there was a qualitative difference between it and comparable devices was unclear. Heavy branding in 130 countries via a five note, tone-based, jingle, served to provide the Pentium with margins up to three times higher than its competitors’. Without it the patent on the Pentium would have meant far less.

Functionally, Intel’s PC processor was not that different form AMD’s less costly one, but its venerable branding from an aggressive retail advertising campaign, paved the way to ubiquity. It’s no accident that a semiconductor maker is the eighth most valuable brand in the world, ahead of BMW (12) and Tiffany (70). Does anyone outside of a small circle of techies, lawyers and investors know who Micron is?

Of the Interbrand’s top ten, the only company that I am aware of that is without a respected patent portfolio is McDonald’s (7). Coincidence or intelligence?

Businesses with extensive patent holdings and reputation for generating return on innovation, benefit from branding their IP success. Nortel and Hitachi  are a examples of patent-rich businesses whose IP success and value may have been somewhat undervalued because of their clear brand identify. IP without brand recognition, I believe, leaves money on the table for well-known companies that fail to take advantage of leveraging their intangible assets.

Consumer products companies Disney (13), Nestle (57), L’Oreal (42), and Gillette (16), all have significant numbers of meaningful patents. (Global cosmetics maker L’Oreal, for example, has received 500 to 700 patents per year for the past decade, or about 6,000 patents.) Iconic eBay (36) has very few patents and seem to be uncertain what to do with those they hold. Google (4), until its purchase of Motorola (unrated), and rival Facebook (69) were in a similar boat. Both have yet to leverage their IP rights and strategy in context of their name recognition. Recently, AOL did leverage its reputation for early Internet success with a billion dollar sale to Microsoft. How these transactions are perceived publicly has become increasingly important.

*     *     *

Apple (2), second only to “low tech” Coca-Cola (1), which supports it renowned trade secret with numerous patents, also has not done enough to leverage its highly valuable brand in context of its small patent portfolio. Spending a fortune to defeat Samsung (9) in a very public suit helped to enhance its perceived patent value and validate its strategy.

Large public companies with complex assets have the ability to leverage them in innovative ways: Patents certainly can benefit from the glow provided by a top brand, even those that are essentially geared to consumer products, like P&G’s (41,000 global patents).

At the same time, even the most highly regarded trademarks (brands) can enhance their importance though association with other valuable intangibles, such as patents. Branding patents is a win-win; so are brands with patents.

Illustration source: BrandMagazine.com


%d bloggers like this: