Once again, Coca-Cola was ranked the most valuable brand in the world, according to Interbrand, one of the nation’s top global brands experts. Apple, to the surprise of no one, was very close behind. When one considers the consumer electronics company’s growth, it will easily eclipse the longtime No. 1 brand by next year.
While some of the biggest brands — including Amazon.com, Samsung and Oracle — have grown their value by more than 20 percent since last year’s report, others have fallen precipitously. Goldman Sachs, still one of the world’s most valuable financial brands, lost 16 percent of its brand’s worth. BlackBerry lost nearly 40 percent of its brand’s value. Based on the Interbrand report, 24/7 Wall St. reviewed Goldman, BlackBerry and eight other brands that lost the most value compared to last year.
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Several industries have grown substantially in the past year. Auto companies, still recovering from the recession, saw major gains in their brand value since the last report. Nine of the 11 large European, Japanese and American automakers on 100 most valuable brands list grew in value last year, up a combined 12 percent.
Taken together, technology firms measured by Interbrand, led by Apple’s stunning 129 percent brand value growth, have grown by nearly 27 percent to more than $320 billion in total value. However, the performance of brands within the technology sector has been much more mixed than auto industry brands. While Apple and Samsung are among the most improved brands compared to last year, the sector also has some that are the worst-performing — and that is not a coincidence. As Apple and Samsung have redefined the mobile phone market, brands like BlackBerry and Nokia are being left behind.
Brands are successful when they are able to redefine a market, Interbrand CEO, New York, Josh Feldmeth told 24/7 Wall St. He offered the example of Apple, which took the mobile phone market and turned it into an ecosystem in which consumers buy games, listen to music and browse the Internet on a single device.
When comparing the brands that are doing well to the brands that are struggling, Feldmeth said, the brands that have done well have been able to predict what people want in a market. “Strong brands anticipate needs and transform desires,” Feldmeth said.
Some sectors are struggling across the board, arguably none more so than financial services. In Interbrand's 2008 report, the combined brand value of the financial services industry was more than to $130 billion. As of the 2012, brand value had fallen to just over $91 billion. The damage to banks is partially a result of negative press generated from the recession, but also in part because they are performing poorly as a business. Feldmeth explained that a large part of Interbrand’s valuation comes from the performance of the company, and that has affected the Citigroup, J.P. Morgan and some of the other large banks. “If you can’t make money with a brand, it’s not really valuable,” Feldmeth said.
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24/7 Wall St. reviewed Interbrand’s Top 100 Global Brands 2012 report, which measures the period of July 1, 2011, to June 30, 2012. Included in the valuation of each brand were the strength of the brand, the financial success of the branded products or services and the extent to which the brand plays a role in that company’s success. 24/7 Wall St. also obtained the financials of each brand’s parent company, including market share and company revenue.
These are the brands that lost the most value over the past year:
1. BlackBerry
- Percent brand value decline: 39 percent
- Brand value: $3.9 billion (93rd)
- Parent company: Research in Motion Ltd.
- One-year change in revenue: -25.2 percent
- Industry: Electronics
The BlackBerry, built by Research In Motion, used to dominate the smartphone market, with loyal users often joking about their addiction to their “crackberry.” Yet blunders such as a BlackBerry outage in late 2011, the failure of its Playbook tablet and the stiff competition from Apple Inc.’s iPhone and Google’s Android devices have led to a rapid decline of BlackBerry’s brand value. BlackBerry’s share of the smartphone operating platform market dropped from 21.7 percent in July 2011 to 9.5 percent just a year later, according to comScore. Meanwhile, Apple’s market share went from 27 percent to 33.4 percent in that time, while Google’s share went from 41.8 percent to 52.2 percent. The parent company has seen its stock decline nearly 90 percent in the past three years. RIM announced in June that it would cut approximately 5,000 jobs out of about 16,500 employees, or around 30 percent of its workforce. RIM is pinning its hopes on the BlackBerry 10, which will likely come out in early 2013.
2. Goldman Sachs
- Percent brand value decline: 16 percent (tied for third)
- Brand value: $7.6 billion (48th)
- Parent company: Goldman Sachs Group Inc.
- One-year change in revenue: -23.2 percent
- Industry: Financial services
Goldman Sachs' brand has taken a major hit since the financial crisis because of its involvement in the sale of complex collateralized debt obligations and in the Greek debt crisis. The company’s practices returned to the spotlight this March when an executive director in the firm’s London office resigned in a scathing op-ed piece published The New York Times. Greg Smith wrote, “The interests of the client continue to be sidelined in the way the firm operates and thinks about making money,” and he noted that managing directors would often refer to clients over email as “muppets.” Revenue in the first half of 2012 was at its lowest level since 2005 due primarily to weak trading volume. The company responded by cutting pay by 14 percent during the first six months compared to the previous year and reducing its head count.
3. Nokia
- Percent brand value decline: 16 percent
- Brand value: $21.0 billion (19th)
- Parent company: Nokia Corp.
- One-year change in revenue: -20.5 percent
- Industry: Electronics
Nokia has had a rough year. After Nokia lost market share for several years, Samsung finally overtook it as the largest manufacturer of mobile devices in the first quarter of 2012. The company’s stock price has been cut by more than half in the past year, and the company announced in June that it was cutting 10,000 jobs to preserve cash. Now the Finnish company is staking its hopes on the Microsoft Windows’ mobile operating system. In September, the company previewed its Lumia 920 smartphone to investors, but they were not impressed. “The challenge is that the world is working on the fourth, fifth and sixth editions of their devices, while Nokia is still trying to move from Chapter 1,” RBC analyst Mark Sue told Reuters following Nokia’s presentation to investors. “It still has quite a bit to catch up.” But even Nokia’s catch-up efforts were hurt in April when early buyers of the Nokia Lumia 900 had problems connecting to the web.
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4. Moët & Chandon
- Percent brand value decline: 13 percent (tied for fifth)
- Brand value: $3.8 billion (98th)
- Parent company: LVMH Moët Hennessy Louis Vuitton
- One-year change in revenue: 22.4 percent
- Industry: Alcohol
Part of French luxury conglomerate LVMH, Moët & Chandon’s brand value declined by more than $500 million in the past year. The brand lost value despite opening a boutique hotel in St. Tropez and launching celebrity-hosted tours worldwide. To help restore brand value, Moët & Chandon has signed a sponsorship contract with the America’s Cup, one of the most well-known sailing races worldwide. Interbrand’s Josh Feldmeth told 24/7 Wall St. that, “It’s not that the Moët & Chandon brand is any weaker, it’s that rituals are changing” as economic growth comes from parts of the world that do not yet associate champagne with celebration. The brand also remained the best-selling champagne in the United States last year, with sales volume rising 1.3 percent to reach 410,000 cases according to Shanken News Daily, a wine, spirits and beer industry news service.
5. Yahoo!
- Percent brand value decline: 13 percent
- Brand value: $3.9 billion (97th)
- Parent company: Yahoo Inc.
- One-year change in revenue: -10.6 percent
- Industry: Internet services
In the past year, news stories about Yahoo! have centered around the firing of its foulmouthed chief executive and the dismissal of her replacement due to discrepancies in his resume. Although the company looks to have finally found a CEO who can last long-term in Marissa Mayer, a change in Yahoo!’s fortunes will not come easily. Over the past several years the company has increasingly lost its share of the display ad market to Google Inc. and Facebook Inc. EMarketer now predicts that Yahoo! will have 9.3 percent of the web’s display ad revenue in 2012, below Google’s 15.4 percent and Facebook’s 14.4 percent. In 2011, Yahoo!’s share of display ad revenue was 11 percent, down from 14 percent in 2010, when it brought in more display ad revenue than any other Web property. Nevertheless, Mayer is looking to make Yahoo! into a more mobile company, where it can begin to gain back revenue through smartphones and tablets.
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