What is a brand worth?
Does logo recognition, and the values or attributes associated with a brand’s image, have any real impact on business performance?
These are the questions that dog every marketer, and shape the investment of billions of advertising dollars each year.
According to research firm Ipsos Reid, brand matters. Ipsos chief operating officer Steve Levy presented the firm’s annual list of the “Most Influential Brands” in Canada on Tuesday at FFWD Advertising and Marketing Week in Toronto. The research has found that the most influential brands also tend to outperform on the stock market.
“Brands that are influential are also much more valuable,” Mr. Levy said in an interview.
Google, Apple, Microsoft and Facebook held the top spots on this year’s list.
It’s no accident that tech brands dominate, nor that they are among the brands with the fastest growing influence: Amazon, Samsung and Netflix have all moved up significantly since Ipsos first conducted the study in 2011.
There’s good reason: These are the brands that people interact with most often – Googling information, pressing the start button on their computers, and checking in with friends on Facebook. Presence in people’s day-to-day lives, more than advertising, correlates with influence.
“The degree to which any brand can influence you is most certainly related to the frequency with which you interact with it,” Mr. Levy said. “You could refer to it as earned media.” (“Earned media” refers to advertising that companies don’t have to pay for: favourable exposure in the press, for example, or posts about the brand in social media.)
Influence index
Brand influence is measured through a survey of 6,006 Canadians, which asks about their attitude toward more than 100 brands – those that spend the most on advertising in Canada, plus a few other influential brands (such as Google, Chipotle, etc.) which are not among the top spenders but are included at the researchers’ discretion. Survey participants agree or disagree with 57 statements, including whether the brand is “part of our everyday language,” is “sexy,” inspires “trust,” etc., and Ipsos Reid calculates the responses. The overall index itself is measures an average of 100, so the number shows how much more (or less) influential each brand is compared to the average. For example, Google, the top brand, is 4.4 times more influential than the average.
Not all influence is created equal, though. Different factors contribute to each brand’s hold over consumers.
For example, Google scores very highly with people in questions related to being “leading edge” and “trustworthy.” But other factors such as corporate citizenship do not factor as highly in its influence ranking.
Tim Hortons, on the other hand, scores much lower in terms of being “leading edge” but scores very high in “presence” and “corporate citizenship.”
Drivers of Influence
The survey asks people about their impressions of brands, and fall under five categories that all contribute to a brand’s influence. For example, a brand that is “leading edge” might be seen as innovative or changing people’s behaviour. One that is “trustworthy” might be judged by survey participants as a “reliable resource” and as having a “strong future.” “Presence” is a factor for brands that are seen as “established” or that “you see everywhere.” Examples of statements in the survey that judge “corporate citizenship” include “actively cares about and supports my community” and “inspires a sense of Canadian pride.”
Sentiment among Canadian consumers is increasingly moving toward global brands: Canadian brands are increasingly having trouble holding a spot in the top 10. This year, the only Canadian brand to appear there is Tim Hortons, as President’s Choice was edged out and Amazon gained the 9th spot – up from 29th in 2011.
According to Mr. Levy, because global brands have so much going for them, it’s notable when any local brands make the top 10 in any of the 21 countries where the survey is conducted.
“Bottom line is that global brands have more scale, more scope, more capital and more access to talent,” he said.
2015's top ten brands by order of influence, over time
Changing trends also have to do with the changing demographics of the Canadian consumer – and differences in influence among age groups could provide clues into how brands’ influence could change in the future, for better or worse.
Among younger consumers – referred to as Millennials – for example, Netflix ranked as the 5th most influential brand; while it scored 22nd among Gen X participants and 40th for Boomers. Instagram ranked 10th among Millennials, but 67th among Gen X and was not in the top 100 for Boomers.
On the other hand, CBC took the 5th spot among Boomers but was 13th among Gen X and 28th for Millennials. Canadian Tire was at number 7 for the older cohort, but 27 among Gen X and 51 for Millennials.