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Service brands thrive in tech space as product-based struggle

Technology service companies have thrived in 2014 as compared to brands focused on products struggled. Among Millward Brown’s BrandZ Top 100 Most Valuable Global Brands ranking, the top 20 tech companies providing services recorded brand value increases of an average of more than 40 per cent while those making products rose by just 10 per cent.

The clearest example of this pattern comes from Apple and Google. While Google has grown 40 per cent and is now the world’s No 1 brand, Apple has fallen back by 20 per cent, losing the top spot that it held for the last three years.

The same trend can be seen with Samsung, HP and Sony, all product-dominated companies with a less impressive performance than the likes of Tencent, Facebook and Baidu. The latter are up 97 per cent, 68 per cent and 46 per cent respectively, while the former have moved +21 per cent, +19 per cent and -1 per cent.

New entrants to the BrandZ Top 100 as well as the Technology Top 20 include two more technology service platforms, Twitter with a brand value of USD 14 billion and LinkedIn worth USD 12 billion.

“Digital service brands such as Google, Facebook, Twitter, Tencent and LinkedIn are now more than just tools, they have become part of our lives. They offer new forms of communication that absorb people’s attention and imagination, while also helping them organise the rest of their lives at the same time. To gain more of our mind-space brands such as Google are making ambitious plays across existing category boundaries,” said Peter Walshe, Global BrandZ Director at Millward Brown.

Despite the fact that some technology brands are struggling, this remains the largest sector in the BrandZ Top 100 listing worth USD 841 billion in 2014, an increase in the combined value of the Top 20 of 16 per cent.

Sitting at the top of the sector is Google, worth USD 159 billion thanks to innovations such as Google Glass, investments in artificial intelligence and a multitude of partnerships take its Android operating system into goods such as cars.

This year’s fastest climber was Chinese internet brand Tencent, up 97 per cent to USD 54 billion and the No 14 position in the overall Top 100, followed by Facebook which rose 68 per cent to USD 36 billion and took the No 21 spot in the Top 100. Altogether Technology companies are less than a fifth of the Top 100 but make up nearly a third of the value of the BrandZ Top 100 ranking.

The leading B2B brand IBM held onto its No 3 position with a brand value of USD 108 billion, however, increased competition in cloud and big data products has slowed down the growth and also affected rivals such as SAP and Oracle.

The BrandZ Top 100 Most Valuable Global Brands study, commissioned by WPP and conducted by Millward Brown Optimor, is now in its ninth year. It is the only ranking that uses the views of potential and current buyers of a brand, alongside financial data, to calculate its value.

Noor Fathima Warsia

A veteran journalist in the Indian marketing, media and advertising fraternity, Noor Fathima Warsia took on the role of Group Editor -– APAC for Digital Market Asia in May 2013. Noor has focussed on tracking trends and developments in the Indian media industry.