GLOBAL BRANDS InsideDon’t imitate Toyotaif your reputationis under fire, saysStefan SternPage 4FINANCIAL TIMES SPECIAL REPORT | Wednesday April 28 2010

www.ft.com/global­brands­2010 | twitter.com/ftreports

Big names prove worth in crisis

For companies whosefinancial value dependsheavily on the health oftheir brands, the sever-

ity and abruptness of the reces-sion was a challenge.

The abruptness with whichmany consumers stopped spend-ing, and large companiesreduced capital investment andwound down capital investment,caused a shock to the system.Many companies experiencednot only the financial crisis, butalso a crisis of confidence.

Marketers and advertisingagencies preach the gospel thatthe companies that emerge bestout of recessions are those thatmaintain their marketingbudget and protect brands whenthe going gets tough. In prac-tice, few companies were certainenough of the future to comply.

Yet some of the Doomsdayscenarios about the value ofbrands in a new, less leveragedworld, have not come to pass.Emerging from the recession,luxury goods companies andmany other consumer brandcompanies are enjoying arebound.

The underlying value of anybrand – the premium com-manded by products and serv-ices with strong reputations andidentities – has not been elimi-nated by the crisis. Even thosecompanies that did not investheavily in their portfolio in theworst times are regaining someconfidence.

Indeed, this year’s BrandZbrands survey suggests that,even if the value of brands isbelow its 2007 peak, it hasrebounded more sharply thanthe S&P 500. Millward BrownOptimor, the WPP subsidiarythat compiles the ranking, calcu-lates that a portfolio of the top100 brands – updated each yearas a new list is compiled – is 18.5per cent up from its level fouryears ago, compared with an 11.5per cent fall in the S&P 500.

The premium for the top 100brands was squeezed as manycountries went into recessionbut it opened up again comingout. In other words, the outlookfor brands has not been funda-mentally altered as a result ofthe recession; instead, it looksfamiliar.

“Brands outperform in goodtimes and when there is a reces-sion they do go down, but theycome out the other side with asustainable advantage,” saysJoanna Seddon, chief executiveof MBO.

The nature of brands contin-ues to evolve. Technologyrather than marketing is nowthe defining characteristic ofseven of the top 10 brands, withCoca-Cola, McDonald’s andMarlboro making up the otherthree.

Google remains the world’smost valuable brand, but edgingup close behind it are two othertechnology companies, IBM andApple. Both of these outrankMicrosoft, whose brand valuewas stable during the year.

Meanwhile, China Mobile,General Electric and Vodafoneoccupy the lowest three placesin the top 10, which comprisesthe same brands as last year’sranking. Although GE’s brand

value fell by 25 per cent from$59.8bn in the list published ayear ago, due mainly to its diffi-culties with GE Capital, thetechnology and infrastructure-related parts of its businessretain their strength.

The resurgence in Appleunder Steve Jobs, through theiPod, the iPhone and now theiPad, continues unabated and,on present trends, it could bepressing Google for first placewithin a year or two. That is atribute to a company thatinspires devotion among cus-tomers.

It may also be a reflection ofthe value of inspirational leader-ship, and the way in which con-sumers identify some of theworld’s most valuable brands,such as Oracle and Starbucks,with founders who embodiestheir qualities. Larry Ellison ofOracle and Howard Schultz ofStarbucks are not only thefounders but keepers of theflame.

This broad shift towards tech-nology is a reflection of theimportance of the internet andcommunications in the fortunesof many companies, includingTelcel, the mobile phone groupcontrolled by Carlos Slim Helu.Telcel is the first Mexican com-pany to enter the top 100 (in69th place).

The social media boom led bycompanies such as Facebookand Twitter – as well the rise insmartphones led by Apple – hashad a broader impact on the top100. It has boosted mobile opera-tors such as Verizon and AT&T,

despite the com-plaints of iPhone users aboutAT&T’s 3G coverage.

Although mobile phone com-panies are struggling to upgradetheir data networks, the trendtowards the mobile internet isgiving them valuable revenueopportunities. “Everyone is twit-tering and sending pictures oniPhones, and data is whatmakes money,” says Ms Seddon.

Yet technology can also dis-turb traditional brand valuesand make it easier for youngcompetitors to break into mar-kets. The best example of thatat the moment is the mediaindustry, where technologycompanies such as Google, Ama-zon and Apple dominate distri-bution.

That is causing problems formedia conglomerates with old-established brands in film, tele-vision and print. They are fac-ing similar problems to the con-sumer goods companies thatconfront powerful discountingdistributors, particularly Wal-mart.

Apart from the influence oftechnology, the biggest secularshift in brand value is the con-tinuing rise of emerging marketbrands. Some 13 of the top 100brands now come from emerg-ing markets, with seven of thesefrom China. In the 2006 rankingthere was just one emerging-market brand – China Mobile.

For the moment, most of thesebrands tend to be based onfinance or resources, with bankssuch as ICICI of India and ChinaConstruction Bank, and energy

John Gapper findsthat top brands areemerging fromrecession in bettershape than their rivals

Reboundis on thecards inbanking

A year ago financial brandswere still reeling from the after-effects of the global banking cri-sis of autumn 2008, so it waslittle surprise that the categorywas one of the worst performingin the April 2009 Top 100, beatento the wooden spoon only by thelamentable performance of carsand insurers.

But, after falling 11 per centin last year’s ranking, the finan-cial institutions category hasbounced back, rising 12 per centin the 2010 list – more than anyof the other 16 categories.

The bald figures are flattering,however. The recovery is due inlarge measure to a very strongperformance by brands thathave been relatively well insu-lated from the credit crisisbecause of their business model,conservative approach to lend-ing or location. Four of the 20are in this year’s list of top 20risers by brand value (see tableon Page 2).

Pride of place goes to the twobig card payment companies,MasterCard and Visa, whosebrand values rose 57 and 52 percent respectively. CristianaPearson, an MBO director,attributes this in part to thebrands’ growing presencebeyond credit cards, with theexpanding use of debit cards forsmall payments, and pre-paidcards. “In emerging markets inparticular, you are seeing a risein the way that people pay forthings like utility bills and othersorts of basic bills, which usedto be by cheque or cash,” shesays.

Joanna Seddon, MBO’s chiefexecutive, adds that in China,workers are receiving their pay

on credit cards – “your pay is acard and you go and deal with itin a bank”. Elsewhere, she saysan increasing number of US air-lines have switched from cashto credit card for small pur-chases by passengers. Anotherstrength, according to PeterWalshe, MBO’s global BrandZdirector, is that paying by debitprevents a large monthly creditcard bill from building up.“That’s a smart move in timesof recession,” he says.

This healthy scenario for thecard payment brands is con-firmed by Antonio Lucio, Visa’sglobal chief marketing officer.“I’d attribute the improvementin Visa’s brand position to twokey factors,” he says. “First,Visa’s product mix includesdebit, pre-paid and credit, andthat diversity gives us tremen-dous resilience in challengingeconomic times.

“Second, our marketingefforts are gaining real traction.The ‘More People Go with Visa’campaign and its recent Olym-pic Games extension, ‘GoWorld’, were the first globalcampaigns in Visa’s history.Together they’re deliveringexcellent returns.”

Compared with Visa and Mas-terCard, American Express hasbeen more exposed to thebroader financial crisis, saysMBO, and less to some of thefactors that have boosted its tworivals. So its brand value hasfallen by 7 per cent.

The other two big risers inthis sector were Goldman Sachs– currently facing mountingthreats to its reputation follow-ing US fraud charges – andHSBC. Goldman, up 25 per cent,was the bank that predicted thecrisis, says MBO, and conse-quently did not suffer as theother banks did. As well as hav-ing a record financial year, itsbrand value is also up acrossmost countries.

HSBC’s 23 per cent rise inbrand value is attributed partlyto its strength in Asia, but alsoto the creation of a global brandfrom scratch via acquisitionsover the past seven years.“They’re positioned around val-ues, the idea of celebrating glo-bal diversity,” says Ms Seddon.“They’ve really been pushingtheir global brand marketingaround something that is a big-ger idea than banking.”

Nick Cooper, MBO’s senior

Financial institutionsMasterCard and Visahave led the recovery,writes Andrew Baxter

Inside this issue

Oil and gas brands JoannaSeddon explains a big change inthis year’s ranking Page 2

BrandZ Top 100 The 2010ranking, plus the fastest­risingbrands and aggregate data from17 business sectors Page 2

Retailers Andrea Felstedchecks out the big store groups’efforts to get into bankingPage 3

Social media Tim Bradshaw ona new way for leading brands toconnect with consumers Page 4

The rankingsThere is a wealth of extra datafrom Millward Brown Optimor’s2010 BrandZ ranking publishedonline at www.FT.com/global­brands­2010. This includes top10s and top 20 tables for 17product categories. We alsopublish Top 10s on a regionalbasis – covering North America,Europe and Asia.The full report from MBO is alsoavailable as an app for theiPhone, Nokia and BlackBerry.The ranking can be downloadedat www.millwardbrown.com/brandz and www.brandz.com

On FT.com

All about emerging markets, trust and price

The growing importance of brandsfrom emerging markets is one of sev-eral themes picked out by compilers ofthe 2010 BrandZ Top 100 ranking.

Seven of the 13 emerging-marketbrands on the list come from China,two each from Russia and Brazil, andone apiece from India and Mexico. Newentrants include Baidu, the Chinesesearch engine, along with ICICI andTelcel from India and Mexico respec-tively. Both these last two are theircountry’s first representatives in theTop 100.

ICICI, the big Indian financial serv-ices group, makes its debut in animpressive 45th place, with a brandvalue of $14.5bn.

Joanna Seddon, chief executive ofMillward Brown Optimor, praisesICICI’s chairman, KV Kamath, forchampioning ATMs throughout Indiaas a way of breaking down the coun-try’s traditional hierarchical barriers –everyone has to wait in line, whetherthey are a cleaner or a bank executive.

ICICI scores a high nine for brandmomentum because of its potential inIndia and elsewhere – it already oper-ates in 18 countries.

Just outside the Top 100, butincluded for the first time in the Tech-nology Top 20, is Infosys Technologies,the big Indian IT group. Ms Seddonsays it is an interesting brand becauseof its co-founder Nandan Nilekani andhis espousal of the “flat world” concept– that is, servicing customers throughoutsourcing anywhere in the world (aspopularised in the bestseller by Tho-mas Friedman, The World is Flat: ABrief History of the Twenty-First Cen-tury).

Both Mr Kamath and Mr Nilekanifeature in another theme identified byMBO – the chief executive as brandleader.

Many of the top 100 have been built –or revived – by leaders with brandvision. They include Carlos Slim of Tel-cel, Apple’s Steve Jobs, Lou Gerstner ofIBM and Starbucks’ Howard Schultz,who returned to a day-to-day role aschief executive two years ago to revivethe fortunes of the company he nur-tured from infancy into a global brand.

Mr Schultz’s vision for Starbuckswas all about making human connec-tions, says Ms Seddon.

“He abdicated from running it andwhat did they do? They went intodrive-throughs. Now, if you’ve got a

brand that’s about human connections,maybe a drive-through doesn’t quitefit. They expanded very fast, and kindof lost the brand essence, and he’scome back again and the brand isdoing better [its brand value rose 17per cent in the latest Top 100].”

Peter Walshe, MBO’s global BrandZdirector, says some of the visionariesare no longer chief executives but theirsuccessors are following the same

vision as a unique aspect of those com-panies, with great success.

Examples of the successors includeSam Palmisano at IBM and MichaelGeoghegan at HSBC, whose chairman,Stephen Green, is an ordained ministerin the Church of England and author ofServing God, Serving Mammon.

Legal addiction – whether of thelong-established variety (cigarettes) ormodern (playing with mobile phones orBlackBerry) – is another theme pickedout by the ranking’s compilers. Marl-

boro, ever present in the top 10, hasseen its brand value grow at an aver-age compound annual rate of 10 percent over the past five years.

Overall, the latest Top 100 list “tellsyou that people in their stressful liveswant to do something to relieve thestress, fiddling with their hands”, shesays. “They are either smoking, orthey’re twiddling on their BlackBer-ries, and we have an example: if youhave a really stressful job, like presi-dent of the United States, you may feelthe need to do both.”

In mobile phones, the world’s top 10operators are all in the top 100 of theBrandZ rankings, says Ms Seddon,along with Apple, BlackBerry and Sam-sung, and a lot of this is down to thephenomenal growth of mobile applica-tions or apps – “everything fromSudoku to Find a Mechanic to BrandZ”,she says.

Mr Walshe adds that two key thingsdrive brands – trust, which is the his-toric brand value that has been builtup, and current user recommendation.“What’s interesting about this cate-gory . . . is that the brands are particu-larly high in user recommendation.They’re not particularly driven bytrust,” he says.

Some of the most valuable brands areunderpinned by both trust and recom-mendation – another key finding fromthe rankings.

While IBM is driven hugely by trustand Apple by recommendation,research by MBO has shown that Pam-pers and Tide, two consumer/house-hold products, are the top trusted andrecommended brands (Tide has slippedout of the Top 100 because of the influxof oil companies).

Brands that are high on both criteriaare either visionary or benefit fromhaving built up a heritage, based onhistoric performance, says Mr Walshe.“And they are delivering it today,together with innovation, and keepingthemselves relevant…particularly inrecent times, as politicians and bankslose credibility, trusted brands becomemore and more valuable.”

The role of price, and the fact thatthe strongest and most valuable brandsare more price-resistance, is a furtherimportant finding from research byMBO.

Because of the desire they createfrom consumers, they tend to com-mand a healthy price premium, even inrecessionary times, and the Top 100brands get the balance right betweenpricing and the power of the brand.

Data from BrandZ show that only 7per cent of consumers buy on pricealone; under a third make a compro-mise between price and brand; andbrand is an important influence fornearly nine out of 10, while more thanhalf take little notice of price.

AnalysisAndrew Baxter looksbehind the numbers topick out the main themesin the BrandZ Top 100

Nandan Nilekani,co­founder ofIndia’s Infosys,espoused the‘flat world’ concept– servicingcustomers byoutsourcinganywherein the world

An increasing numberof US airlines haveswitched from cash tocards for smallonboard purchases

companies such as Pet-roChina and Petrobras combin-ing both financial value and alarge domestic market.

One reason for the two lattergroups’ debut in the latestBrandZ Top 100 is that MBO hasused new research to reflect theupstream brand value of oilcompanies for the first time.Previously, only the down-stream distribution arms ofenergy groups such as BP andExxonMobil were fully reflectedin the brand rankings.

This has had a significant

effect, with BP being allo-cated a brand value of $17bnand entering the top 100 at 34while ExxonMobil comes in justbehind it in 39th place, withbrand value of $15.5bn. It is anillustration of how brands mat-ter not just to customers but ina business-to-business context.

As ever, the year includedexamples of famous brands hav-ing difficulties – the most nota-ble being Toyota, the Japanesecar company. Problems with thebrakes on some models led toproduct recalls in the US and

damage to its reputation forquality.

Toyota’s brand value fell from$29.9bn in the 2009 ranking to$21.7bn in the latest one, andthe effect of the product recallsmay not yet have fully workedits way through. Toyota joinedHome Depot, another well-estab-lished brand that lost its way,falling from a brand value of$18.3bn in 2007 to $9bn this year.

Many analysts expected prob-lems for luxury clothing andgoods makers, which faced awave of discounting by retailersat the end of 2008, and fearsabout whether consumers wouldcontinue to be extremely highprices for a luxury image.

In practice, however, well-est-ablished luxury goods brandssuch as Louis Vuitton have kepttheir value, even if they havenot seen the kind of growththey might have hoped for. Thevalue of the Louis Vuittonbrand, at $19.8bn, is 2 per centup on the previous year.

So, despite the shock thatmany experienced following thefinancial crisis, brands are play-ing their traditional role of giv-ing companies some cushionagainst market pressures. Theyhave proved their capacity toretain loyalty among consumerseven through downturns.

Many brands will experiencecrises, or simply stagnate, in thecoming year and have to clawtheir way back but the after-math of the crisis has provenonce again an old lesson.Brands may suffer, but they arehard to destroy altogether.

Sources: Millward Brown Optimor, BloombergBased on the Top 100 brands for each year, with theportfolio amended at the start of the corresponding year

BrandZ portfolio performanceagainst the S&P 500Total returns (%)

2006

07 08

09

10

0

BrandZ top 100 portfolio

S&P 500

18.5

46.9

-47.3

-11.5

Continued on Page 3

2 ★ FINANCIAL TIMES WEDNESDAY APRIL 28 2010

Global Brands

Oil and gas companiesTop 10 by brand value

Rank Brand BV 2010 ($m) BC BM1 BP 17,283 1 32 Exxon Mobil 15,476 1 23 Shell 15,112 1 34 Petrochina 13,935 1 55 Petrobras 9,675 1 86 Chevron 7,254 1 37 Total 6,986 1 28 Gazprom 6,350 1 59 ConocoPhilips 5,347 1 1

10 Eni 4,566 1 3Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)

Rank

Rank

ing

Chan

ge

Bran

d

Bran

d va

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2010

($m

)

Bran

d va

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2009

($m

)

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2008

($m

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Bran

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% B

rand

val

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10 v

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2009

Four

-yea

r CA

GR

(%)

1 = Google 114,260 100,039 86,057 5 9 14 32

2 2 IBM 86,383 66,622 55,335 4 4 30 24

3 3 Apple 83,153 63,113 55,206 5 8 32 51

4 -2 Microsoft 76,344 76,249 70,887 5 7 0 5

5 -2 Coca-Cola1 67,983 67,625 58,208 5 6 1 13

6 -1 McDonald’s 66,005 66,575 49,499 5 6 -1 23

7 3 Marlboro 57,047 49,460 37,324 4 7 15 10

8 -1 China Mobile 52,616 61,283 57,225 5 9 -14 8

9 -1 GE 45,054 59,793 71,379 1 2 -25 -5

10 -1 Vodafone 44,404 53,727 36,962 3 4 -17 17

11 1 ICBC 43,927 38,056 28,004 4 7 15 N/A

12 5 HP 39,717 26,745 29,278 3 6 48 19

13 -2 Walmart 39,421 41,083 34,547 2 8 -4 1

14 2 BlackBerry 30,708 27,478 13,734 4 8 12 107

15 11 Amazon 27,459 21,294 11,511 4 9 29 46

16 -1 UPS 26,492 27,842 30,492 4 5 -5 5

17 4 Tesco 25,741 22,938 23,208 5 4 12 13

18 18 Visa 24,883 16,353 N/A 4 9 52 N/A

19 6 Oracle 24,817 21,438 22,904 1 5 16 16

20 14 Verizon Wireless 24,675 17,713 19,202 5 9 39 13

21 -2 SAP 24,291 23,615 21,669 3 5 3 26

22 6 AT&T 23,714 20,059 12,030 4 6 18 N/A

23 7 HSBC 23,408 19,079 18,479 4 3 23 14

24 3 Bank of China 21,960 21,192 19,418 3 6 4 N/A

25 -7 BMW 21,816 23,948 28,015 5 6 -9 -2

26 -12 Toyota 21,769 29,907 35,134 5 4 -27 -8

27 -3 China Construction Bank 20,929 22,811 19,603 3 7 -8 N/A

28 -6 Gillette 20,663 22,919 21,523 5 4 -10 4

29 = Louis Vuitton 19,781 19,395 18,446 5 8 2 1

30 7 Wells Fargo 18,746 16,228 24,739 5 7 16 N/A

31 7 Santander 18,012 16,035 14,549 3 9 12 11

32 = Nintendo2 17,834 18,233 N/A 3 8 -2 N/A

33 -2 Pampers 17,434 18,945 N/A 5 6 -8 N/A

34 New BP 17,283 N/A N/A 1 3 N/A N/A

35 -2 Cisco 16,719 17,965 24,101 2 5 -7 -4

36 12 RBC 16,608 14,894 18,995 5 9 12 N/A

37 4 Bank of America 16,393 15,480 33,092 2 9 6 -12

38 14 Budweiser3 15,991 13,292 10,839 4 8 20 9

39 New ExxonMobil 15,476 N/A N/A 1 2 N/A N/A

40 New Shell 15,112 N/A N/A 1 3 N/A N/A

41 -21 Disney 15,000 23,110 23,705 3 5 -35 -8

42 5 Carrefour 14,980 14,961 15,057 5 7 0 10

43 -30 Nokia 14,866 35,163 43,975 4 5 -58 -13

44 -1 Accenture 14,734 15,076 14,137 4 4 -2 11

45 New ICICI 14,454 N/A N/A 1 9 N/A N/A

46 4 Honda 14,303 14,571 16,649 3 4 -2 1

47 9 Colgate 14,224 12,396 10,576 5 7 15 25

48 -25 Intel 14,210 22,851 22,027 2 3 -38 -13

49 -4 L'Oréal 14,129 14,991 16,459 5 6 -6 7

50 3 Orange 14,018 13,242 14,093 2 6 6 11

51 New PetroChina 13,935 N/A N/A 1 5 N/A N/A

52 -6 American Express 13,912 14,963 24,816 3 3 -7 -7

53 -13 Mercedes 13,736 15,499 18,044 5 3 -11 -6

Rank

Rank

ing

Chan

ge

Bran

d

Bran

d va

lue

2010

($m

)

Bran

d va

lue

2009

($m

)

Bran

d va

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2008

($m

)

Bran

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% B

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10 v

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2009

Four

-yea

r CA

GR

(%)

54 -5 Citi 13,403 14,608 30,318 2 7 -8 -18

55 8 T-Mobile 13,010 10,864 8,940 3 8 20 3

56 -1 BBVA 12,977 12,549 9,457 5 9 3 N/A

57 -18 NTT DoCoMo 12,969 15,776 15,048 3 7 -18 -10

58 -14 Pepsi4 12,752 14,996 15,404 4 5 -15 N/A

59 = Nike 12,597 11,999 12,499 5 7 5 4

60 2 Movistar 12,434 10,911 8,117 1 6 14 N/A

61 5 Chase 12,426 10,582 12,782 4 9 17 6

62 -5 Target 12,148 12,254 14,738 4 7 -1 19

63 -5 H&M 12,131 12,061 11,182 2 7 1 11

64 -4 Subway 12,032 10,997 10,335 5 5 9 N/A

65 -30 Porsche 12,021 17,467 21,718 5 4 -31 0

66 -24 Dell 11,938 15,422 15,288 3 6 -23 -10

67 20 MasterCard 11,659 7,427 6,970 4 7 57 N/A

68 33 Samsung 11,351 6,322 11,870 4 9 80 -1

69 New Telcel 10,850 N/A N/A 4 9 N/A N/A

70 7 O2 10,593 8,601 6,309 2 7 23 29

71 -10 TD 10,274 10,991 N/A 5 7 -7 N/A

72 -1 MTS 9,723 9,189 8,077 3 4 6 N/A

73 New Petrobras 9,675 N/A N/A 1 8 N/A N/A

74 -5 FedEx 9,418 9,491 11,486 5 6 -1 3

75 32 Baidu 9,356 5,768 N/A 5 10 62 N/A

76 -22 eBay 9,328 12,970 11,200 3 7 -28 -8

77 -26 Siemens 9,293 13,562 14,665 1 6 -31 8

78 10 Goldman Sachs 9,283 7,415 11,944 4 9 25 1

79 -15 Wrigley’s 9,201 10,841 N/A 5 4 -15 13

80 -4 Zara 8,986 8,609 8,682 3 4 4 16

81 -11 Home Depot 8,971 9,280 15,378 2 3 -3 -24

82 -3 Red Bull5 8,917 8,154 N/A 4 4 9 N/A

83 -9 Aldi 8,747 8,638 5,811 1 6 1 37

84 -17 Nissan 8,607 10,206 11,707 2 2 -16 -5

85 4 Starbucks6 8,490 7,260 12,011 5 5 17 -5

86 -4 Hermès 8,457 7,862 6,951 5 7 8 16

87 3 Barclays 8,383 6,992 7,382 1 7 20 14

88 New US Bank 8,377 N/A N/A 5 8 N/A N/A

89 -11 Standard Chartered 8,327 8,219 6,855 1 6 1 31

90 -10 China Merchants Bank 8,236 8,052 3,000 1 4 2 N/A

91 = State Farm 8,214 6,922 9,425 5 8 19 1

92 -20 Beeline 8,160 8,884 N/A 4 4 -8 N/A

93 -10 JP Morgan 8,159 7,852 9,762 1 7 4 4

94 8 Sony7 8,147 6,848 6,109 3 5 30 -3

95 -3 Morgan Stanley 8,003 6,765 11,327 2 2 18 -6

96 -31 Auchan 7,848 N/A 7,148 4 7 N/A 11

97 -11 Gucci 7,588 7,468 6,479 5 4 2 17

98 = Bradesco 7,450 6,565 N/A 2 9 13 N/A

99 -24 Avon 7,293 8,631 7,209 3 5 -16 4

100 -1 Tim 7,280 6,409 7,903 2 6 14 -211Includes Diet Coke, Coke Light and Coke Zero2Includes Wii and DS3Includes both Bud Light and Budweiser4Includes Diet Pepsi and Pepsi5Includes Sugar-free and Cola6Includes retail as well as coffee sold at supermarkets7Includes PlayStation 2 and 3, and PSP

Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)

Global top 100By value

How the BrandZ ranking is created

The BrandZ Top 100 is the only rankingbased on a brand valuation methodologythat is grounded in quantitative customerresearch and in­depth financial analysis,writes Joanna Seddon.

Insights into customer behaviour andbrand strength come from WPP’s uniqueBrandZ database — the world’s largestrepository of brand equity data. Coveringthousands of brands and based on more

than a million interviews, it provides adetailed, quantified understanding ofcustomer decision­making the world over.

Financial data are sourced fromBloomberg, analyst reports, Datamonitorindustry reports, and company filings withregulatory bodies. Millward BrownOptimor’s consultants then preparefinancial models for each brand that linkbrand perceptions to company revenues,

earnings, and ultimately shareholder andbrand value.

The valuation methodology is similar tothat employed by analysts andaccountants. Brand value (BV) is derivedfrom each brand’s ability to generatedemand. The dollar value of each brand inthe ranking is the sum of its predictedfuture earnings, discounted to a presentday value.

An important element of the overallcalculation is brand contribution (BC), theportion of earnings that can be consideredto be driven by brand equity, which ispresented as an index from 1 to 5 (5 isthe highest); an additional metric is brandmomentum (BM), which indicates eachbrand’s short­term growth potential. Thisis presented as an indexed figure thatranges from 1 to 10 (10 is the highest).

Going upstreamto capture biggroups’ full value

Five of the 11 newentrants into thelatest BrandZ Glo-bal Top 100 – BP,

ExxonMobil, Shell, Pet-roChina and Petrobras —are oil companies. This isnot because of a suddensurge in their brand valueslast year, but because a newmethod has been used tocapture their full value.

Previously, the BrandZrankings measured only thevalue of brands in the retailfuel station businesses. Thisresulted in the undervalua-tion of oil brands, sinceretail is a relatively smallpart of the business.

The major part of oil com-pany business and brandvalue is created in theirupstream businesses –exploration, extraction,refining, trading and whole-sale – not on fuel stationforecourts. The brand ele-

ment is at least as impor-tant, if not more, in thebusiness-to-business envi-ronment than it is on theretail side.

A government, for exam-ple, will carefully weigh anoil company’s reputationfor having the latest tech-nology and promoting sus-tainability when grantingdrilling rights.

However, unlike manybusiness-to-business brands,oil companies have rela-tively few customers intheir upstream markets,and these can be very diffi-cult to reach through quan-titative research.

This year MBO furtherdeveloped the BrandZ meth-odology to capture the fullvalue of oil and gas brands.The existing methodologywas retained for the retailpiece, which values eachbrand via the amount ofretail gasoline it generates.A royalty relief approach —the generally accepted wayof determining brand valuefor licensing purposes —was adopted to measurebrand value in theupstream businesses.

This approach calculates

brand value as the presentvalue of the brand royaltiesthat the business would payif it had to license thebrand from a third partyinstead of owning it.

The licensing rate for thebrand within the upstreambusinesses is estimatedbased on two factors: com-parable brand licensingrates for upstream oil busi-nesses, and an adjustmentto the average of the com-parable licensing rates

based on the strength of theoil company brand beingvalued. The strength ofeach oil company’s brand inthe upstream businesses isdetermined by conductingresearch among oil and gasindustry analysts and port-folio managers.

The outcome is that, notsurprisingly, some oil com-

panies have very valuablebrands. This is not justbecause they are very bigcompanies. The correlationbetween oil company sizeand brand value is far froma straight line relationship.

PetroChina, for example,is the largest company inthe world by market capi-talisation – it is almosttwice as big as Google – andit is popular in China pre-cisely because of its size.But size does not equatedirectly to brand value, andPetroChina comes in onlyat 51st place in the Top 100.Despite a market capitalisa-tion exceeding $350bn, morethan double Google’s$170bn, its brand value isonly $14bn compared with$114bn for Google.

And despite being themarket cap leader amongoil companies, PetroChinais only the fourth most val-uable oil company brand.BP, Shell and Petrobras allhave smaller market capsthan PetroChina, but theirbrands contribute propor-tionately greater value. Allthree have been notably

successful in cultivatingtheir brands in ways thathelp them address the par-ticular challenges they face.

Among oil companies,ExxonMobil is consideredthe most innovative, thebest corporate citizen andthe best at communicatingwith its shareholders. Basedon those factors and itsupstream businesses, itwould be the brand leader.

However, BP has pro-pelled past ExxonMobil tothe number one brandvalue position with a some-what less valuableupstream brand but a muchstronger downstream brandamong businesses and con-sumers. Key factors in BP’sdownstream brand valueare its worldwide retail net-work – most of it stronglybranded with the greenHelios “sun god” logo – andits large investment inadvertising and communi-cations.

For BP, brand is nowplaying a complex role. TheBP brand must reconcile areputation for environmen-tal leadership with the busi-

ness imperative to producefossil fuels to meet energyneeds.

Shell is respected for itsexpertise in dealing withlocal governments and com-munities and its 45,000 Shellbranded retail outlets inevery corner of the globe.Its acquisition and rebrand-ing of Texaco’s US outletsand those of DEA in Ger-many make it the world’slargest branded retailer:Shell now has more retaillocations outlets thanMcDonald’s.

Petrobras is the mosttrusted oil company with abrand strength that flowsdirectly from an enormous

depth of national feeling.Brazil was an energyimporter until Petrobrasestablished a bold strategyto develop new deep seadrilling technology, founddeposits which doubled itsreserves and made Brazilenergy self-sufficient. Thecompany is seen as havingsaved the country. It winson both sides — consumerslove it and investors recog-nise it as one of the bestbrand investments amongcompanies in the Bric (Bra-zil, Russia, India and China)nations.

Five other brands – Chev-ron and ConocoPhilips fromthe US, Total from France,

Eni from Italy and Gazpromfrom Russia are ranked inthe Oil & Gas Top 10 (seechart) but none of themmade it into the Top 100.

Oil companies have cometo recognise that brand isincreasingly important totheir industry. In additionto the role of their brandsto increase sales to consum-ers and businesses, brandsinfluence investors, regula-tors, and governments, andare important in addressingthe environmental concernsof civil society everywhere.

Joanna Seddon is chiefexecutive of Millward BrownOptimor.

Oil and gas brandsJoanna Seddon ona key change inthis year’s Top 100

The correlationbetween size andbrand value is farfrom a straightline relationship

Across the sectors

After the sharp peaks andtroughs in last year’s BrandZreport, the 17 categoriescovered in the 2010 rankinghave performed more sedately,reflecting a less volatilebusiness environment, writesAndrew Baxter.

The top risers in theprevious ranking were mobileoperator brands, up anaggregate 28 per cent, andsoft drinks, up 24 per cent, butthe biggest increase this timeis just 12 per cent for financialinstitutions, reversing the 11per cent decline of a year ago.

At the other end of thetable, cars and insurance arestill battling for the woodenspoon, but at least this timeboth sectors have stemmedthe decline. After a whopping48 per cent decline in brandvalue in last year’s ranking,insurance brands have fallenjust 7 per cent in the latestlist, while cars are down 15 percent, compared with 22 percent a year ago.

The best performingcategory after the financialbrands (see article, Page 1) isbeer. “Like last year, light beerbrands are growing faster,”says Cristiana Pearson, adirector at Millward BrownOptimor. “Corona, the Mexicanbrand, is also doing well,helped by its ‘Corona tuespacio’ concept of having amoment alone with yourCorona. Skol is benefiting fromthe merger of Anheuser­Buschand InBev, and from its strongposition in Brazil where it isvery involved in cultural events,music festivals, things thatyoung people really bond with.”

In cars, Toyota has lost itstop place to BMW. “As acorporation Toyota has beenaffected by the recalls [seearticle, Page 4], so that hasimpacted on the financials[which form an element of thebrand value formula],” saysJoanna Seddon, MBO’s chiefexecutive. “All the brands aredown except for Ford, VW andAudi in the top 10. Ford, apartfrom having the best socialmedia campaign ever [see TimBradshaw’s article on Page 4],dealt with the whole [crisis inthe US car industry] beautifullyfrom a brand and reputationpoint of view.”

Full details of all 17 categories,with tables, are at www.FT.com/global­brands­2010

Fastest risers

Samsung takes the prize forfastest­rising brand in thisyear’s BrandZ Top 100 – an80 per cent increase takes itsbrand value to $11.3bn,allowing the Korean electronicsgroup to power its way backinto the Top 100, in 68thplace, after a one­yearabsence, writes AndrewBaxter.

The company’s televisionbusiness has been performing“incredibly well”, says CristianaPearson, a director at MillwardBrown Optimor. JoannaSeddon, MBO’s chief executive,adds: “The TV business is verystrongly branded and Samsunghas the strongest brand in LCD[liquid crystal display] TVs,that’s really a lot of what thisis about.”

Close behind is Baidu, theChinese internet search engine,which makes its debut in theTop 100 after a 62 per centrise in brand value to $9.4bn,putting it in 75th place. Baiduis also one of just two brands– Skol is the other – toachieve a maximum 10 forbrand momentum, whichindicates each brand’s short­term growth potential.

Peter Walshe, MBO’s globalBrandZ director, says Baidu isone of the most trusted brandsin China. This is due partly tothe fact that a majority ofChinese think they do a betterjob than Google at picking upthe nuances of differentChinese dialects, says MBO.

Next, the UK clothes retailer,achieved a 54 per cent rise inbrand value to $2.6bn (thebrand is not in the Top 100).“Next is a recovery brand, itwas down 40 per cent lastyear,” says Ms Pearson. “It hastried to adopt the Zara/H&Mmodel of quick turnrounds.moving its products fastthrough the stores.”

Then comes Hewlett­Packard,the US hardware and ITservices group, with a 48 percent rise in brand value to$39.7bn. This reflects therebranding of EDS to the HPbrand and a brandrepositioning, with a new logoand “Let’s do amazing” tagline.

There is an expanded versionof this article at www.FT.com/global­brands­2010

Year-on-year growthSector Brand

value growth (%)

Financial Institutions 12Beer 10Technology 6Fast Food 1Retail -1Soft Drinks -1Mobile Networks -1Bottled Water -2Gaming Consoles -3Spirits -3Luxury -3Apparel -4Personal Care -4Coffee -6Insurance -7Cars -15Source: Millward Brown Optimor (in-cluding data from BrandZ, Datamoni-tor and Bloomberg)

Top 20 risersBy brand value growth, (year-on-year)

Brand Brand value growth (%)

Samsung 80Baidu 62MasterCard 57Next 54Visa 52HP 48Verizon Wireless 39Apple 32IBM 30Sony 30Amazon 29Goldman Sachs 25HSBC 23O2 23Skol 22Gatorade 22Corona 21Evian 21Budweiser 20T-Mobile 20Source: Millward Brown Optimor (in-cluding data from BrandZ, Datamoni-tor and Bloomberg)

A worker checks pipelines at a PetroChina oilfield in Sichuan province Reuters

FINANCIAL TIMES WEDNESDAY APRIL 28 2010 ★ 3

Global Brands

Financial institutionsTop 20 by brand value

Rank Brand Brand value $M

Brand contribution

Brand momentum

Brand value change (%)

Two-year CAGR

1 ICBC 43,927 4 7 15 112 Visa 24,883 5 9 52 NA 3 HSBC 23,408 4 3 23 64 Bank of China 21,960 3 6 4 35 China Construction Bank 20,929 3 7 -8 36 Wells Fargo 18,746 5 7 16 -57 Santander 18,012 3 9 12 78 RBC 16,608 5 9 12 -29 Bank of America 16,393 2 9 6 -15

10 ICICI 14,454 1 9 NA NA 11 American Express 13,912 3 3 -7 -1312 Citi 13,403 2 7 -8 -1713 BBVA 12,977 5 9 3 1014 Chase 12,426 4 9 17 015 MasterCard 11,659 5 7 57 1516 TD 10,274 5 7 -7 NA 17 Goldman Sachs 9,283 4 9 25 -618 Barclays 8,383 1 7 20 419 US Bank 8,377 5 8 NA NA 20 Standard Chartered 8,327 2 6 1 5

Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)

vice-president in the UKand Europe, adds thatHSBC also emerged withclean hands from the creditcrisis, and with no state aid.“They’ve obviously pickedup a lot of business fromother brands that havedone less well,” he says.

Other good performers inthis sector include Bar-clays, which also did nottake any public funding andhas been investing heavilyin its brand; Chase, buoyedby its acquisition of Wash-ington Mutual but also byavoiding serious trouble inthe credit crisis; and RoyalBank of Canada, helped byits home country’s conserv-ative banking laws, and abeneficiary of the fall-outfrom the financial turmoil.Through acquisitions in theUS over recent years it hasbeen building a NorthAmerican identity via itsRBC branding – “it’s diffi-cult to expand to the south-ern American states if

you’re called the RoyalBank of Canada”, says MsSeddon.

Then there is Santander,with its strong position inLatin America offsettingthe financial crisis in Spain,but also benefiting fromovert brand promotionthrough its sponsorship ofFormula One motor racing.

Ms Seddon forecast a fur-ther big rise in brand valuefor the “monolithic”Santander in next year’sranking as brands it hasacquired, including Abbeyin the UK, are renamed.

Overall, the top 20 in thissector underlines how theworld of banking has

changed in the past fiveyears. In 2006, 2007 and2008, the Citi and Bank ofAmerica brands were jos-tling for top place, but nowit is China’s ICBC, up 15 percent this year, that headsthe ranking (see table).

“[ICBC] really does havea strong brand – youmightn’t think so fromlooking at its name but itdoes,” says Ms Seddon.Bank of China and ChinaConstruction Bank occupyfourth and fifth places,respectively, while India’sICICI makes its debut in10th slot. Meanwhile, Bankof America and Citi havefallen to 9th and 12th.

Looking ahead, however,it is not all about the inexo-rable rise of the Asian bankbrands. Four of the top 20brands – Visa, Santander,RBC and Bank of America –are in the overall top 10 for“brand momentum”, a for-ward-looking measure of abrand’s potential. A strongpresence in emerging mar-kets is one reason for this.

Trust thestores toget intobanking

While banks’brands haveyet to recoverfrom the global

financial crisis, retailershave emerged relativelyunscathed from the down-turn.

This is creating opportu-nities for big store groupsaround the world to stretchtheir brands into otherareas, particularly financialservices.

Tesco, the UK’s biggestretailer and 17th in Mill-ward Brown Optimor’s

BrandZ Top 100 with abrand value of $25.7bn, haspledged to become the “peo-ple’s bank”. The US super-market giant Walmart –four places higher with BVof $39.4bn has long har-boured ambitions to offerbanking services in itshome market after success-fully developing bankingoutlets in Mexico.

A host of other retailers,including J Sainsbury (BVof $2.7bn, outside the Top100), Marks and Spencer(BV of $5.7bn, also outsidethe Top 100) and JohnLewis (not in the ranking)in the UK, are all pushing,or eyeing expansion in,financial services.

Michael Lafferty, of Laf-ferty Group, a retail bank-ing research house, saysretailers have a once-in-a-lifetime opportunity to getinto financial services,given the blight on banks’brands and the creditdrought in parts of the con-sumer finance market.

“Bank brands are seri-ously damaged, there is nodoubt about it, and there-fore, there is a really majoropportunity for retailers toget into consumer lending.”There is, he says, a “chancefor a new renaissance ofretailer based consumerlending.”

At the heart of the oppor-tunities for retailers lies thetrust in their brands thathas withstood the ravagesof the recession.

According to research lastautumn for Asda, 65 percent of people polled trustedsupermarkets more thanpolitical parties, while 36per cent thought supermar-kets were on their side dur-ing the recession.

David Roth, chief execu-tive of The Store WPP, theadvertising group’s retailpractice, says the brandvalue of the top retailers

has gone down by 1 percent, according to theBrandZ ranking publishedtoday.

In contrast, the brand val-ues of banks and insurersrose, because they sufferedsuch a steep deteriorationin the 2009 ranking. How-ever, other sectors faredmuch worse this time – carmanufacturers saw theirbrand value fall by 15 percent.

“It could have been a lotworse [for retailers] says MrRoth.

Within the retail sector,Tesco, which has set outambitious plans in financialservices, saw its brandvalue rise 12 per cent, whileAmazon’s climbed 29 percent, and Best Buy (not inthe Top 100) saw its brandvalue increase by 18 percent to $5.8bn.

“There are some veryinteresting opportunities,”says Mr Roth. “[Retailers]can capitalise on consum-ers’ distrust of other sec-tors, and issues that havecome up in the recession,and extend their brandsinto areas [in which] con-sumers currently distrustthe players. [Retailers’]brands are strong enough,and have that bond of trustthat can extend acrossother categories heavilyimpacted by the recession.”

Mr Roth says consumers’poor opinions of brandsdamaged by the downturn“will open up space for thepower retailers with bigbrands to enter new mar-kets and create engines ofgrowth. Banking is an obvi-ous one.”

Another study by WPP’s

The Futures Company andMillward Brown, usingBrandZ data, looked at therelationship between trustand recommendation – thatis, how well a brand istrusted, and how preparedan individual would be torecommend it.

“We found that retailers,in general terms, are highlytrusted and getting moretrusted as the consumer hasa deeper and deeper rela-tionship with that retailer.Once again, [that] allowsthe retailer the ability touse their brand acrossmany different product sec-tors,” says Mr Roth.

However, offering bank-ing services, particularlycurrent accounts – the keyrelationship account – andmortgages, is very differentfrom putting soap powder,or even sweaters, on super-market shelves.

Robert Jones of WolffOlins, the brand specialist,says that to succeed, retail-ers first of all require abanking licence.

Tesco has had a bankinglicence since 1997. In theUS, Walmart has yet to

secure a banking licence,restricting its US financialservices operations tomoney transfer, chequecashing, bill payments andthe pre-paid cards used topurchase goods. Mr Laffertysuggests however, that inthe wake of the financial

crisis, the US authoritiesmay be more willing toextend a banking licence tothe world’s biggest retailer.

Retailers must also buildall the requisite infrastruc-ture and information tech-nology systems, somethingthat can be complex andtime consuming.

Despite the bold ambi-tions stated a year ago,Tesco has yet to offer a cur-rent account or a mortgage.It has indicated it couldintroduce a mortgage bythe end of this year andcurrent accounts next year.

Store groups must alsoenhance existing skills, ordevelop new ones, such asthe management of capitaland liquidity. Mr Jones saysthey must also encouragethe most lucrative custom-ers to switch to their serv-ices.

The complexity of build-

ing banking operationsleads him to suggest thatretailers may have missedthe optimum time to enterbanking – last year whenmemories of the financialcrisis were still fresh inconsumers’ minds.

“At a time when bankswere in crisis, that was amoment of turbulence thatcould have been exploited,”he says. “The really hotopportunity last year, theyhave missed out on, butthat doesn’t mean there isnot still an opportunity.”

Retailers also face chal-lenges entering financialservices, and the trust insupermarkets must not beoverstated. “Surveys showthat this lack of trust inbanks actually goes acrossbig corporations generally,and banks just happen to bea special case of itrecently,” says Mr Jones.

In addition, if storegroups begin behaving likebanks – repossessing housesat the most extreme forexample – customers maycome to view them with thesame disdain.

“That is the branddilemma,” says WPP’s MrRoth. “But the customercentricity of retailers canteach the banks some veryinteresting lessons, and Ithink, overall, there is avery strong customer propo-sition for retailers in finan-cial services.”

He adds: “I don’t thinkany retailer will want to gointo the banking arena tothen behave like a tradi-tional bank. There is novalue in doing that. Theywill want to go into bank-ing to do it in a differentway. That may well be aproposition that consumersfind very attractive.”

RetailersAndrea Felsted onambitious brandextension plans bythe sector’s giants

Credit where it’s due: an employee at a Walmart bank store in Mexico – the giant US retailer has long harboured ambitions to offer banking services in its home market Bloomberg

In spite of the boldambitions stated ayear ago, Tescohas yet to offer acurrent account

Rebound is on the cards asbanking sector recoversContinued from Page 1

ContributorsJohn GapperUS Business Columnist

Andrew BaxterSenior Writer, FT Reports;commissioning editor

Tim BradshawUK Digital MediaCorrespondent

Andrea FelstedRetail Correspondent

Stefan SternManagement Writer

Steven BirdDesigner

Andy MearsPicture Editor

For advertising details,contact: Robert Grange,tel +44 (0)20 7873 4418,fax +44 (0)20 7873 4006,e­mail robert.grange@ft.com or your usual FTrepresentative

‘It’s difficult toexpand to thesouthern Americanstates if you’recalled the RoyalBank of Canada’

4 ★ FINANCIAL TIMES WEDNESDAY APRIL 28 2010

Global Brands

How to avoid makinga drama out of a crisis

The brand careering off theroad is Toyota’s. Chillingrecordings of the phonecalls made by distresseddrivers to the emergencyservices – sometimes frompeople behind the wheel ofan out-of-control car – havebeen repeated on TVprogrammes for monthsnow. Proof, if any wereneeded, that there is sucha thing as bad publicity.

The Japanese carmakerhas been strongly criticisedfor its response to thiscrisis, and the embarrassingrecall of several Toyotamodels. “Speed of response,transparency of messageand visibility are the threekey principles to successfulcrisis management,” saysBasil Towers, foundingpartner of Hesleden, areputation managementconsultancy. “Toyotaarguably failed on allthree.”

For a brand built on thekey elements of qualityand reliability, the eventsof the past few monthshave been disastrous.Worse, the at times slowand almost grudgingresponse to that criticismthe company displayed – atleast initially – seems tohave done it even moreharm. US politicians leapton to the opportunity tokick a foreign businesswhen it was down.

So if Toyota (brand valuedown 27 per cent to$21.8bn in the latestBrandZ Top 100 ranking –see Page 2) offers us a casestudy in how not to reactto a crisis and protect yourbrand, which examples aremore helpful? The goldstandard in brandprotection remains the 1982case of Johnson &Johnson’s Tylenolpainkiller.

For once the scarestories put out by themedia had some substanceto them. Seven people

living in the Chicago areadied after taking Tylenol,the top-selling painkiller inthe US, which had beencontaminated with cyanide.

Johnson & Johnson didnot go into denial. Seniormanagers did not get intoa non-communicativehuddle and hope theproblem would go away.Instead, the companyquickly took the difficultand financially painfuldecision to recall morethan 30m bottles of thedrug. It kept up a regularflow of information – the“transparency andvisibility” recommended byHesleden above – andintroduced new safetymeasures, includingimproved tamper-proofpackages.

When the new batches ofsafe Tylenol startedreappearing on thepharmacy shelves, thecompany opted to takeanother financial hit byoffering discount coupons.But the public wasconvinced. The Tylenolbrand was intact, regaining70 per cent of its marketshare within five months.It is still the number onebrand today.

Mattel, the US toymaker,had to own up to severeproblems with its Chinesemanufacturers in thesummer of 2007. It wentinto hyper-communication

mode. After a productrecall announcement ateam of 16 press officerscontacted dozens of USmedia outlets. Aconference call with seniorexecutives was arranged.

Robert Eckert, Mattel’schief executive, did 14 TVinterviews in one day, aswell as conducting manyphone calls with reporters.He got the tone ofcontrition and candour justright, apologising for hiscompany’s recall of faultytoys.

“I’m disappointed, I’mupset, but I can assureyour viewers that we aredoing everything we canabout the situation,” MrEckert said on CNN.“Every production batch oftoys is being tested, andwe’ll continue to enforcethe highest qualitystandards in the industry.”In one week, Mattel dealtwith more than 300 mediarequests in the US alone.Their faith in the companyintact, shoppers stuck withthe brand.

PepsiCo was also praisedfor its open and robustreaction to a crisis in 1993.It was claimed thatsyringes had been found incans of diet Pepsi. Whenan arrest was made after apolice investigation, thecompany was happy topublicise it. It alsoproduced a video made atone of its factories showinghow such tampering wasimpossible.

The so-called syringeproblem was in fact ahoax, carried out clumsilyby various individualsaround the country. Therewas nothing wrong withthe company’s productionprocedures, as they wereable to show. Pepsi reactedfast partly because italready had a plan ofaction in place ready todeal with a case of producttampering.

Clearly it is possible totake action quickly andexplain to a worried publicthat a perceived problem isbeing dealt with. But ofcourse, wise managers tryto make sure that, as faras possible, they avoidsudden, unexpected crisesin the first place. This,too, is part of the businessof protecting the brandand the corporatereputation.

Hesleden’s Mr Towersraises a few questionsabout the Toyota debaclewhich, had they beenanswered sooner, mighthave prevented a lot of thesubsequent damage:

“Did/does Toyota engagein systematic scenarioplanning and simulation tostress test or benchmarkits responses to crises?” heasks.

“Did/does its businessleaders recognise theimportance of the broadestlevel of stakeholderengagement andtransparency? To whatextent is Toyota reviewingits approach to the crisisand the lessons it canlearn?”

Unexpected disasters canhit any company at anytime. But as some haveshown, the brand can stillbe protected and repaired.You do not have to make adrama out of a crisis.

The gold standardremains the 1982case of Johnson& Johnson’sTylenol painkiller

Facing the press: Toyota president Akio Toyoda AP

Stefan Stern

Big names are all a­Twitter over Facebook

When first faced withthe prospect ofmarketing on socialnetworks, many

people ask a reasonable ques-tion: how many people want tobe friends with a brand? Theanswer – surprisingly, perhaps –is: millions do, on a daily basis.

More than 10m people eachday become a “fan” of a brandon Facebook. The world’s larg-est social network – with well inexcess of 400m members glo-bally – plays host to more than1.4m branded fan pages on Face-book. BrandZ Top 100 brandssuch as Coca-Cola and Star-bucks, along with other smallerbrands outside the Top 100 suchas Adidas (brand value or BV of$3.3bn in the latest MBO list),have each “befriended” millionsof people.

“A lot of our best brand build-ers are also some of the bestcompanies using social media,”says Joanna Seddon, chief exec-utive of Millward Brown Opti-mor, which compiles the BrandZranking. “A lot of the leadershipin social media is really centredin the top 100 brands.”

Social media has matured rap-idly in recent years. Sites suchas YouTube, Facebook andTwitter offer scale and reach torival Google – still the mostdominant single site for onlineadvertising – and many televi-sion channels. The best adver-tisers use social media alongsidethese traditional channels for acombination of brand-building,direct sales, customer serviceand PR. The worst simplyignore them, blissful only untilthey realise the complaints andaccusations that disgruntledcustomers are telling otherwould-be consumers.

“Social media have given con-sumers a voice to respond, aswell as hundreds of channelsthrough which to do so,” saysDebbie Klein, joint chief execu-tive of Engine, a UK-basedagency group. “These websites

have fundamentally trans-formed marketing from a mono-logue to a dialogue. Brands can-not hide.”

Eurostar, for instance, facedcriticism last December forignoring Twitter messages –which, unlike most Facebookposts, are usually made publicfor anyone to read – from angrycustomers trapped on trainsbetween Paris and London.Eurostar had failed to grab itsbrand name on Twitter, and itsmain presence on the site –named “little_break” to tie intoa wider marketing campaign –was still showing special offersrather than information on thedisrupted service for somehours after the problems began.

In the fast-paced, “real-time”environment of Twitter, just a

few hours is long enough forsuch criticism to spread widely,be chewed over by its denizensand, if it reaches a certain vol-ume, be picked up and amplifiedfurther by the mainstreammedia. Kevin Smith, a filmdirector, caused a similar Twit-ter storm when he complainedto more than 1m followers thatSouthwest Airlines threw himoff a flight for being overweight.Southwest later made two pub-lic apologies on its blog.

But for every Eurostar orSouthwest, there is a successstory that proves social medianeed not be just for moaningand crisis management. Dell,another Top 100 brand, claimsto have generated several mil-lion dollars in sales from Twit-ter alone, where it regularly

posts special offers on its com-puters.

Facebook likes to point to theexample of Adidas, the sports-wear maker which has morethan 2.7m fans on its Adidas

Originals page. Each fan is esti-mated to be worth around $100 ayear in footwear, making its fanpage a community worth morethan $200m with which it cancommunicate directly all year

around, for only the cost ofmaintaining the page. Becominga fan of a brand on Facebookmeans agreeing to allow a com-pany to send messages into thatuser’s main “news feed” – thepart of the site in which Face-bookers spend around twothirds of their time.

The new forms of social mediaare also generating new creativepossibilities for brands. Aheadof the launch of its new Fiesta,Ford (BV up 19 per cent thisyear to $7bn, just short of thecut for making the Top 100)gave 100 “internet celebrities”the latest model and gave themfreedom to document their expe-rience online. Millions ofYouTube viewings later, theyhad sold 10,000 cars in six daysand had ready-made content for

the TV ad officially launchingthe car.

Last year, Burger King’s“Whopper Sacrifice” offered afree hamburger to anybody whodeleted 10 of their Facebookfriends. Each sacrificial victimwas sent a message explainingwhat had happened, and so themessage spread (at least, untilFacebook made Burger Kingtone down its application aftermore than 200,000 such sacri-fices were made).

But although social media canbe used to achieve high impactwith much lower investmentthan traditional media, sea-soned observers note that manyostensibly “viral” campaignshave had more than a littlenudge along the way.

“The beauty of social media is

that they are accessible across alarge range of budgets,” saysJason Klein, co-president of LBiin New York, a digital agency.“[As for Facebook] pages withhundreds of thousands of peo-ple, some [companies or prod-ucts] have brand equity toattract that but a lot, I wouldassume, have been driven upwith some form of media buy…Facebook has been shrewdabout building a platform thatmakes it very difficult to growgroups organically.”

Facebook’s “engagement ads”are one way for companies tobuy traffic for their fan pages.Twitter has recently introducedadvertising in its search results,in the form of “promotedtweets”, which have seen Star-bucks’ messages appear whenpeople search for “coffee”.

But Mr Klein warns againstusing follower counts or groupsize as a measure of success insocial media. “People don’tknow what they want to getback so they have to hang theirhat on the number of posts,friends or comments. We havetried hard to educate our clientsthat even though these aren’tthe exact metrics to know some-thing is successful, to focus juston the numbers takes your eyeoff the ball a bit. Would I ratherhave thousands of peoplebelieve in my brand than hun-dreds of thousands signing upbecause they got a free keychain?”

Navigating the constantlyevolving world of social mediawill claim more casualties yet.

Simon Clift, until recently thechief marketing officer at Uni-lever, has warned of a “lost gen-eration” of marketers who donot understand the social web,either because they are too old,or too young to learn from theirchildren.

“There is no question thatsocial media of all the chal-lenges in media is the hardestone,” Mr Clift says. “You haveto listen rather than impose,which is difficult for all market-ers.”

Meanwhile, in another sign ofthe times, Facebook has madeits own debut in the BrandZrankings. With a BV of $5.5bn, itis not yet in the Top 100, butslips in as 20th in the Technol-ogy Top 20.

Social mediaTim Bradshaw on anew way to listen andrespond to wellconnected customers

Brand new medium: more than 10m people each day become a ‘fan’ of a brand on Facebook AP

Seasoned observerssay many ostensibly‘viral’ campaigns havehad more than a littlenudge along the way