A look at the list of the world’s most valuable brands tells the story of how Google, Facebook, Amazon, Tencent and Alibaba built globally successful brands in a period of twenty years or less. Fortune’s list of the top 50 unicorns also shows that tech start-ups are here to stay. So how are these brands born and how have they grown from embryonic ideas to global powerhouses? We shared this presentation at a recent UK event which brought together some of the brightest minds in the industry to discuss the opportunities and challenges of becoming a start-up success story and the role of brand in driving business success.
6. 6BRANDZ™ Top 100 Most Valuable Global Brands: 86 common brands valued in both 2006 and 2017
WE KNOW THAT
‘MEANINGFUL’
BRANDS GROW AT
A FASTER RATE
12 year value change
2006 – 2017
75%
145%
Low Meaningful High Meaningful
7. 7BRANDZ™ Top 100 Most Valuable Global Brands: 86 common brands valued in both 2006 and 2017
WE ALSO KNOW THAT
‘DIFFERENCE’ PLAYS
A CRUCIAL ROLE.
‘MEANINGFULLY
DIFFERENT’ BRANDS
ARE PRIMED TO
GROW AT AN EVEN
FASTER RATE
53%
213%
Low Meaningful
Difference
High Meaningful
Difference
12 year value change
2006 – 2017
8. IN PRACTICE WE
SEE THAT
DIFFERENCE IS
TYPICALLY THE
LEAD COMPONENT
MEANING AND SALIENCE
TEND TO FOLLOW…
8
9. Average Brand 100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
99
Example 1
+42%
GLOBAL BRAND VALUE 2009-2017 #89
152
DIFFERENT
SALIENT
MEANINGFUL
124
104
13. NOTE HOWEVER
THAT DIFFERENCE
CAN ALSO BE A
LEAD INDICATOR
OF EQUITY
DECLINE…
13
Mobile phone handsets
PRE IPHONE
2007
IPHONE LAUNCH
2008
POST IPHONE
2017
EXAMPLE 5
Average brand 100
100
167
249
76
103
270
122
181
14. 14
PRE IPHONE
2007
POST IPHONE
2017
EXAMPLE 5
MEANING SHOWED
A MORE GRADUAL
BUT NONETHELESS
DRAMATIC DECLINE
FOR BOTH BRANDS
IN THE UK
Average brand 100
163
87
99
69
130
Mobile phone handsets
16. 16
A new, unique and
motivating proposition
to challenge the
established order,
meet an emerging
consumer need, or
both!’
A DEFINITION OF A DISRUPTIVE BRAND…
17. 1717
BRAND DISRUPTION DIFFERENCE
156 158
137 150
131 206
123 128
122 137
119 138
115 121
113 117
111 119
105 141
HOW ARE
DISRUPTION AND
DIFFERENCE
RELATED? AREN’T
THEY MEASURING
THE SAME THING!?
2015-2017
Average brand 100
18. 90
100
110
120
130
140
150
65 85 105 125 145 165 185 205 225 245
DISRUPTION SHOWS
A GOOD RELATIONSHIP
WITH DIFFERENCE
BUT DOESN’T
COMPLETELY
EXPLAIN IT
R² = 0.56
18
DISRUPTION
DIFFERENT
10,295 global brands measured between 2014 and 2016
20. 20
BUT critically it is
those brands
perceived to be
Different AND
Disruptive that grow
at an even faster
rate
3 year global brand
value % change
DIFFERENCE
DISRUPTION
+28%
HighLow
LowHigh
+11%
+5%-5%
(same 67 brands 2015 to 2017)
22. Average brand 100
22
170
128
DISRUPTION/MEANINGFUL DIFFERENCE
Launched 1920 Launched 2010
114
Disruption
CLEAR PURPOSE AND
TRULY DISRUPTIVE
INNOVATION CAN
BUILD MEANINGFUL
DIFFERENCE
RELATIVELY
QUICKLY
EXAMPLE 1
23. Launched 1995
IN FACT CLEAR
PURPOSE AND
TRULY DISRUPTIVE
INNOVATION CAN
BUILD MEANINGFUL
DIFFERENCE VERY
QUICKLY!
23
DISRUPTION/MEANINGFUL DIFFERENCE
Launched 2007 Launched 2016
115
Disruption
144
132
117
EXAMPLE 2
Average brand
100
24. A NUMBER OF OTHERS
IN THE UK AND US HAVE
COMBINED STRONG
DISRUPTION WITH
CLEAR MEANINGFUL
DIFFERENCE, IN A
RELATIVELY SHORT
TIMEFRAME – PRIMING
THEM FOR FUTURE
GROWTH
BRAND COUNTRY DISRUPTION
MEANINGFUL
DIFFERENCE
144 137
143 161
127 118
123 139
24
DISRUPTION/MEANINGFUL DIFFERENCE
2017
25. 25
THE BATTLE FOR
MEANING WITHIN
ONLINE FOOD
DELIVERY IN
THE UK
DISRUPTING THE DISRUPTOR
BRAND MEANINGFUL DIFFERENT SALIENT
158 117 178
66 131 75
EXAMPLE 3
2017
26. Disruption only adds
value in the short
term for emerging
brands and is
impossible or
irrelevant to maintain
in the long term
A FINAL THOUGHT
26
28. 28
The ‘Fearsome Five’ remain
INCREDIBLY MEANINGFULLY DIFFERENT
in their respective categories…
180 174 163 159 145
2017 MEANINGFUL DIFFERENCE
Average brand 100
29. 29Brands featuring in Global Top 100 2017
SHAKING THINGS UP
….AND YET THEY
REMAIN SOME OF
THE MOST
DISRUPTIVE BRANDS
IN THE WORLD.
A FIRM COMMITMENT
TO A DISRUPTIVE
MINDSET CAN PAY
DIVIDENDS
148
144
143 143
138
137
136
135 135
133
131
127 127 126 126
Average brand 100
30. What next for Amazon?
30
“Day 2 is stasis. Followed by irrelevance.
Followed by excruciating, painful decline.
Followed by death…
…And that is why it is always day 1.”
Jeff Bezos
32. So what have we learned today?
FIVE SIMPLE TAKEOUTS
32
#1 Shake things up
#2 Think about Difference,
not just Disruption
#3 Question whether your
USP has scalable relevance
#4 Layer Meaning onto
Difference sooner rather
than later
#5 Don’t stop being
Disruptive
Editor's Notes
Firstly a quick word on BrandZ, which we’ve used to provide many of the insights for today. BrandZ is run by Kantar Millward Brown on behalf of WPP and is the largest brand equity database in the world, containing data from over 3M consumers and 120k brands. Based on this wealth of data we are able to understand what makes a brand primed to grow and also demonstrate the power of disruption!
So let’s begin with a review of the key factors we know are important for building strong brands generally…
This is probably BrandZ’s most famous chart and proves definitively that building a strong brand is a way of maximising and protecting shareholder returns – MARKETING SHOULD BE VIEWED AS AN INVESTMENT, NOT A COST. This is demonstrated here by some of the largest and most successful brands in the world but today we’re focussing on newer ‘disruptive’ brands – as we’ll see later on though, some of the world’s most successfully established brands remain the most provocative!
So what do we know about building strong brands?
Well we know that ‘Meaningful’ brands grow at a faster rate - they combine an ability to meet consumer needs with a strong emotional connection. Colgate as a classic example…it wouldn’t have been able to build such a strong emotional connection with consumers if it didn’t ultimately clean your teeth!
(Difference = literal difference and perceptions of leadership/trend setting)
So perceptions of Difference play a vital role in amplifying a brand’s potential to grow
The combination of Meaningful Difference is a very powerful one
BUT which comes first – Meaning or Difference? Let’s look at some examples
In fact our ‘Meaningfully Different’ model of brand equity proves that three elements are vital for brand growth – Meaning, Difference and Salience. Salience is the third key element – if a brand can effectively amplify a Meaningfully Different proposition then growth will very likely follow. Our analysis shows that Difference is often the leader of these three components. Let’s look at some examples…
Aldi has been making inroads on the traditional Supermarkets in many countries, including the UK. Its GLOBAL brand value has increased impressively, featuring at #89 in this year’s Global top 100 with a brand value of $12.273B
In the UK all three aspects have improved (mainly from 2013) but clearly a strong sense of Difference has led this growth in Meaning and Salience and ultimately value
UK data
Aldi founded in 1946
A clear perceived point of Difference vs. other Digital TV providers has grown over time and led development of clear Meaning to users – they LOVE this brand! A QUARTER OF UK HOUSEHOLDS NOW SUBSCRIBE TO NETFLIX. Salience has built more slowly and there remains room to grow further – WATCH THIS SPACE! Note: 2017 data not available in time for this event (likely Q4)
Broke into the Global Top 100 for the first time in 2017 @#92 worth $12.057B
Context = Digital TV providers
Netflix launched in the UK in 2012 – 5M household subscribers by the end of 2015 – projected to be 9M by 2020
YouTube is also a brand on the rise globally after entering the BrandZ global Top 100 for the first time in 2017 @#65 valued at $16.785B
In the UK the brand has always been defined by a very clear point of difference, though its meaning to users has recently overtaken Difference for the first time as the brand has become more well known and loved. A CONSISTENTLY DIFFERENTIATED POSITIONING HAS BEEN THE LAUNCHPAD FOR BUILDING THIS FUNCTIONAL AND EMOTIONAL CONNECTION WITH USERS
Founded in the US in 2005
Facebook is another example of MASSIVE growth being driven by the engine of perceived Difference. The brand’s IPO in May 2012 explains the large Salience spike at the time in the US. The IPO was the biggest in technology and one of the biggest in internet history, with a peak market capitalization of over $104 billion.
Facebook is one of the fastest growth brands we have measured. Up 2,250 percent in 7 years (!) in GLOBAL brand value.
US data – Facebook founded in 2004
Category defined as either Internet networks and services or Online Sharing and Networking
Note - 2017 data not available in time for this event
We’ve seen that Difference can act as a lead indicator of success….But this example shows that it can also be a lead indicator of a brand’s equity decline – particularly in the face of very disruptive competition. Both Nokia and Blackberry had their perceived Difference decimated by the entry of iPhone in the UK – a pattern mirrored around the world
This example again suggestions that establishing a clear point of difference can be the Launchpad to establishing strong Meaning (and hence achieving clear ‘Meaningful Difference) to consumers.
So we’ve established that establishing Meaningful Difference is critical for brand success + Difference as a lead component of equity growth and decline but so far we’ve mainly looked at pretty well established brands. What role does disruption have to play, how are the rules different for disruptive brands and can disruptive brands realistically achieve Meaningful Difference quickly?
First let’s begin with a definition of a ‘Disruptive brand’ - note this definition will form the beginning of our panel debate later on so feel free to comment or offer your own definition then!
A number of disruptive brands are also clearly defined by their point of difference though not yet their meaning or salience to consumers. So how are Difference and Disruption related – aren’t they the same thing?
Snapchat founded 2011, Airbnb 2008, Asos 2000, Uber 2009, Amazon Instant Video 2011, AO.com 2000, Apple Pay 2014, Pingit 2012, GiffGaff 2009, Metrobank 2010, OVO Energy 2009, Deliveroo 2013
NOTE – THIS SHOWS THE LATEST YEAR OF DATA WE HAVE AVAILABLE FOR THESE BRANDS BUT THE FIRST YEAR WE HAVE SHOWS THE SAME PATTERN:
Uber Indonesia 2016 – 64/105/48
ASOS UK 2013 – 79/131/82
Airbnb France 2015 – 65/192/87
M/D/S/Dis
Airbnb – 70/206/103/131
Snapchat – 76/121/71/115
Amazon prime – 83/128/77/123
AO.com – 96/137/72/122
Apple Pay – 43/158/55/156
Pingit – 52/138/55/119
Giffgaff – 86/117/66/113
Metro bank – 79/119/67/111
Ovo Energy – 100/150/67/137
Asos – 79/141/89/105
In fact yes, the two do show a good relationship but not a perfect one. Disruption is not completely explained by difference and vice versa – so does disruption alone add value?
Difference = Leadership (Setting trends) + Uniqueness (Different to others)
Disruption = Shaking things up
Strong perceptions of disruption can add brand value – so should we just aim to be as disruptive as possible?
H = 115+ (19 brands)
M = 114 – 105 (21 brands)
L = 104 and below (27 brands)
In fact it’s where we see disruption and difference overlap that we see the most value created, not just disrupting for the sake of disruption… So this suggests that by disrupting with a clearly different proposition we’re on to a guaranteed winner?
Well this collection of brands were certainly deemed to be disruptive and different enough by a large number of investors – attracting over $1Bn in investment between them….
Yet each of them failed and closed down this year for various reasons – why? They either identified a ‘need’ that didn’t really exist or were not different ENOUGH versus their existing competition [EXPLAIN EXAMPLES].
So yes difference is also a critical element but it must be difference combined with relevance of proposition…
These brands did not achieve scalable relevance and ultimately Meaningful Difference
But is it possible then for disruptive brands to achieve Meaningful Difference quickly?
Juicero – US - (initially raised $120M from investors) – founded 2014 – closed 2017
Pre-packed fruit and veg + expensive juicing machines. Could actually be squeezed by hand as easily..
Sprig – US – 2013 – 2017 – online (healthy) food cookery and delivery – couldn’t be scaled profitably
Yik Yak – US – 2014 – 2017 – social media smartphone app - create discussion threads within a 5 mile radius of location
Quixey – US – 2009 – 2017 – ‘The search engine for apps’ – missed revenue targets and shutdown
Beepi – US – 2013 – 2017 - online peer-to-peer marketplace for buying, selling and leasing used cars. Failed to raise further funds
Jawbone – US – 2011 – 2017 (1999 as Aliph) – wearable technology and fitness – achieved less than 3% share and lost legal case vs. FitBit
Yes! – example 1
Colgate has been the clear market leader in oral care in India for a very long time with no serious challengers.
Patanjali was founded in 2006 and manufactures mineral and herbal products across a range of categories. Launched toothpaste in 2010 and based on strength of proposition and point of difference, the brand has quickly become a player in the toothpaste market.
Baba Ramdev started as a yoga teacher before setting up a pharmacy selling herbal products. Popularity soared and Patanjali as a private company was born in 2006, which has since rolled out a range of products - in healthcare, hair care, dental care, toiletries, food and more - at breath-taking speed. Media attention and low pricing have certainly helped as well as the clear vision and delivery across numerous categories
Colgate launched ‘Vedshakti’ as a direct competitor to Patanjali in 2016 – focuses on herbal content
Yes! – example 2
150M subscribers in 8 months
Everything free for first 6 months then a small subscription charge – Disrupted the entire category - India data now the cheapest in the world as a result. Vodafone likely to consolidate business and pull out of the market…
The company commercially launched its services on 5 September 2016. Within the first month of commercial operations, Jio announced that it had acquired 16 million subscribers. This is the fastest ramp-up by any mobile network operator anywhere in the world. Jio crossed 50 million subscriber mark in 83 days since its launch. Subsequently crossing 100 million subscribers on 22 February 2017.
Jio MDS 2017 = M 103, D 130, S 86
Spotify – launched in Sweden in 2008, UK 2009, US 2011 – rumoured to IOP late 2017 or early 2018 – valued @$13B
Pandora Radio – ‘a music streaming and automated music recommendation service’ – founded 2000 in the US – now only available in the US (previously ANZ also) – IPO in 2011
Brewdog – founded in Scotland in 2007 – valued at £1B – plan to IPO ‘in the next 4-5 years’
The battle in the food delivery sector in the UK between Just Eat and Deliveroo is a great illustration of this. Having had a head start, Just Eat has already built Meaning to supplement its point of difference. Deliveroo has been able to disrupt and establish a greater point of difference by pre-empting a consumer desire for restaurant delivered food. It is also now tapping into breakfast and lunch occasions to maintain difference and drive growth. However, annual revenues are a quarter of those of Just Eat. If Deliveroo can build meaning by continuing to identify functional areas of difference and communicating those in a way that builds an emotional connection, it can create a meaningfully different brand that is primed for significant growth. A lot will be riding on its recently launched “memorable moments” campaign which represents its first national TV campaign.
Just Eat founded 2001 – intermediary between take-aways and customers – 13 markets
Deliveroo – Founded 2013 – focuses on restaurants and charges them and customers a fee – 12 markets
So we’ve established that disruptive brands can establish Meaningful difference quickly with the right proposition…but does disruption have longer term power?
Ask audience if anyone disagrees with this assumption before building the answer
These brands are BrandZ’s globally most valuable brands and this value is ultimately anchored in their Meaningful Difference
These brands also remain perceived to be very disruptive – they have successfully retained this power
Whatever Amazon chooses to do next , we can be sure it will be ground-breaking and disruptive….
Innovative brands based on the top performers on ‘Dynamic’ element of Difference – setting trends vs. follows others