The Asia & Pacific (APAC) banking sector continues to show remarkable resilience and progress in 2025, supported by an 11% year-on-year growth compared to the past year. The world’s 500 most valuable banking brands this year comprise of 183 from the region and collectively, their brand value accounts for USD721.8 billion.

While the number of APAC brands in the rankings declined slightly compared to 2024, the remarkable growth among the highest-value brands has been a key driver behind the region’s success story. Most notably, among the top 12 APAC banks in this year’s ranking, 11 experienced an average 30% increase in value while only one, Bank of Communications, recorded a decline. This trend is indicative of the region’s on-going growth trajectory as APAC banks continue to expand their market presence and strengthen their brand equity.

BANKING POWERHOUSES RISE: CHINA, INDIA, AND JAPAN STRENGTHEN GLOBAL PRESENCE

China’s growing prominence in the global banking sector is undeniable with 70 banking brands from the country making it to the Banking 500 list this year, representing 29% or USD476.5 billion of the sector’s global brand value. In comparison with the United States, 73 American brands account for 22% of the global banking brand value.

The top five Chinese banking brands in the global rankings have achieved an impressive collective brand value of USD319.8 billion—double the value of their top five US counterparts — with most of these banks being state-owned.

Asia & Pacific Banking Giants Thrive Amid Rapid Growth and Innovation Their success is largely driven by state support, allowing the banks to align their strategies with national economic priorities, including large infrastructure projects, the Belt and Road Initiative, and real estate development, all contributing to their rapid growth.

China’s ICBC holds the top spot as the world’s most valuable banking brand with a value of USD79.1 billion, reflecting a 10% increase from the previous year. This is followed by China Construction Bank and Agricultural Bank of China.

As among the world’s fastest growing country economically, India’s banking brands account for USD43 billion in value this year, represented by a total of 18 brands in the rankings. HDFC Bank stands out with a brand value of USD13.4 billion, under the leadership of Sashi Jagdishan, who ranks first among brand guardians in the global banking industry this year. He has been instrumental in steering the merger of HDFC Bank with its parent company, HDFC. Meanwhile, State Bank of India and ICICI Bank follow closely, highlighting the country’s rising prominence.

Japan, with 21 banking brands collectively valued at USD42 billion in the global rankings, takes the lead with SMBC (brand value up 45% to USD13.1 billion). This growth follows its rebranding in 2018 from SMFG, which has proven successful, delivering strong returns through synergies. MUFG and Mizuho Financial Group follow as the second and third most valuable Japanese banking brands this year.

PHILIPPINES, SINGAPORE, AND INDONESIA: STANDOUT PERFORMERS

This year, the Philippines stands out with its banking sector recording a remarkable 49% year-on-year or growth of USD3.6 billion.

A significant portion of this growth is attributed to the top two brands, BDO (brand value up 48% to USD3.7 billion) and Bank of the Philippine Islands (brand value up 53% to USD2.3 billion). With a 41% year-on-year growth, equivalent to USD9 billion among its banking brands this year, Singapore continues to contribute towards the region’s success. DBS led this growth with a notable surge of 56% to reach a brand value of USD17.2 billion, followed by OCBC Bank with 28% growth while the debutant from the island nation this year is Bank of Singapore.

This year, Indonesia's banking sector is another noteworthy success story with a 31% year-on-year growth or an increase of USD4.9 billion. Much of this growth was driven by the top three banks from the country namely, BRI (brand value up 36% to USD7.3 billion), Bank Mandiri (brand value up 52% to USD5.6 billion), and BCA (brand value up 42% to USD4.4 billion), underscoring the market's key developments.

STRENGTH IN STRATEGY

Clinching the recognition of the world’s strongest banking brand of 2025 is once again Indonesia’s BCA, with a Brand Strength Index (BSI) score of 97.1 out of 100. BCA has held on to this prestigious rank for two years consecutively, a testament to the fact that customers consistently choose BCA over its competitors, reinforcing its strong position in the market. The bank’s strategic focus on simplifying banking services, combined with strong relationships with small and medium-sized enterprises, has contributed significantly to its success. These efforts have fostered long-term partnerships and reinforced BCA’s position as a model for other banks seeking to enhance their brand strength.

The world’s top five strongest banking brands also includes Vietcombank and Bank of Singapore, each leading with a strong BSI score of 95.3 and 94.7 out of 100 respectively.

Brand Finance research has found that Vietcombank, Vietnam’s largest commercial bank, has a high level of brand familiarity within the country. Similarly, the Bank of Singapore also benefits from a high level of familiarity in its home market contributing to an increased BSI score.

These banks demonstrate that by focusing on simplifying services, strengthening customer relationships, and excelling in key brand metrics, institutions can build long-lasting customer loyalty. Their success highlights the importance of aligning brand strategies with evolving consumer needs to maintain a competitive edge.

NAVIGATING CONSUMER BEHAVIOUR AND THE DIGITAL REVOLUTION IN ASIA & PACIFIC (APAC)

Consumer behaviours across APAC are shaped by both economic and cultural factors. In developed markets like Japan, South Korea, and Australia, customers expect a blend of traditional services and digital solutions, with a focus on convenience irrespective of touchpoint, through branch networks and mobile apps.

In China, rapid digital transformation has made mobile banking and digital wallets essential for customer loyalty, while mainland Asia adopts a hybrid approach, blending fintech with physical branches for a more personalised experience.

South Korea provides a striking example of technology reshaping banking, with KB Financial Group’s KB Star Banking app, which integrates key banking services and features such as the KB Wallet. The 2025 study is following a surge in engagement, after the app reached 12 million monthly users in 2023, according to the bank’s annual report.

Mobile banking and digital platforms continue to rise in importance both in APAC and around the world. This is particularly true in China and India, as mobile banking has become a daily necessity, while markets like Singapore and Hong Kong integrate multi-channel experiences, blending technology with in-branch services.

AI adoption is rising across the region, improving efficiency and reducing wait times, as demonstrated by the Commonwealth Bank of Australia’s investment in AI. Malaysia’s Maybank in the other hand, leverages digitalisation through its M25+ plan to drive growth and embrace sustainable practices, positioning itself as a catalyst in the region’s digital transformation.

Looking ahead, the region’s banking brands are set to expand their influence by balancing local strengths with strategic innovation. Their deep market understanding, strong government ties, and extensive branch networks provide resilience amid geopolitical uncertainty and high interest rates, allowing them to source funds efficiently.

At the same time, leading banks are driving growth through digitalisation, preparing for climate-related challenges, and excelling in specialised sectors. By combining these advantages, APAC banks are well-positioned to shape the future of global finance.

To remain competitive within the region, banking brands must focus on key strategies that blend a thorough understanding of local markets with a commitment to digital transformation. By embracing customer-centric technologies, banks can elevate their service offerings while effectively addressing emerging challenges.

Building strong brand partnerships and ensuring compliance with regulatory standards will be crucial to maintaining relevance in an increasingly dynamic environment. The most successful banking brands in this region will be those capable of navigating complex market dynamics with agility and strategic foresight, ensuring that their institutions not only adapt to the evolving global financial landscape but also meet the ever-changing demands of consumers.

Brand Finance Banking 500 2025 

Read our new report on the world's top 500 most valuable and strongest Banking brands

Every day at Brand Finance we are tasked with evaluating the strength of brands and marketing and valuing the impact of that strength. Within that task lies a requirement to answer different layers of questions including:

1. What is a brand and what makes it strong?
2. Why do brands and brand strength matter?
3. What are the most popular brands?
4. What can you do to build Brand Popularity and Strength? – The Brand Beta model

The following series of short articles is intended to explain how we do that and what that means for businesses.

1. What is a brand and what makes it strong?

In order to talk about what makes a brand strong and set up for growth, it’s important to briefly define what we mean by “brand”.

When we speak about brands in the context of accounting or law, we consider brands to be “trademarks and their associate intellectual property” with this intellectual property being designs, domains, art works etc that are linked to the use of the trade marks.

Trademarks themselves are “any sign capable of being represented graphically and which is capable of distinguishing goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” [1]. In other words, in legal terms, trademarks are simply a signpost distinguishing one company, product or service from another.

As a result of this, “distinctiveness” from the signposts of another legal ‘person’ is the key determinant of whether a mark can be trademarked. Differentiation or reputation don’t even get a look-in, an important fact given the discussion in our industry on the importance of distinctiveness over differentiation in driving brand strength and growth.

However, the ability to trademark a brand does not necessarily mean that that brand is “strong”.

As my colleague at Brand Finance and Insights Director, Steve Thomson, has pointed in an article in April 2019 Brand Strength is “in laymen’s terms how ‘good’ the brand is, and the impact it has on stakeholders’ actions: whether to buy the product, what price to pay, whether to work for an organisation, etc”.

What this means is that brands are more than signposts. In reality, they are a unit of storage for the cumulative familiarity, reputation and appeal among all stakeholders (customers, employees, suppliers, investors and the external public) and a method for exploiting that familiarity, reputation and appeal through the use of clear, distinctive signposting.

This is why at Brand Finance we use the rounded definition of “A bundle of trademarks and associated IP which can be used to take advantage of the perceptions of all stakeholders to provide a variety of economic benefits to the entity”, when identifying brands in order to evaluate and value them.

Importantly, this highlights the fact that brands are there to satisfy customer needs better than the competition and to make money. The way they make money is to influence people to make decisions that are favourable to person, business, nation, organisation etc that they wouldn’t make for the same entity if it had a less strong brand.

Each stakeholder is different but customers are generally the most important, so this article focusses on them and how their view of brands affects profit-seeking businesses.

Among customers, the aim of brands is to make money and a strong brand will be one that stimulates the expansion of the demand curve when present compared to when not present. By stimulating additional demand, the brand has the effect of raising revenue and profit by either allowing for an increase in volume sold or price point or both.

Brands do this by having a higher level of penetration and awareness, and by stimulating a higher rate of conversion among non-customers (trial) and customers (loyalty) than other brands. In other words, they get more people to buy more (preferably at a higher price).

This effect is well summarised within the ‘marketing funnel’. The marketing funnel is a key construct when analysing the impact of brands on business performance. Customers and other stakeholders need to be aware of brands to consider them. Following this, the features of the product, service, price, availability, image etc as well as in some cases the nature of promotional activities lead people to consider and ultimately purchase branded products and services. The marketing funnel encompasses these effects into a simplified structure which provides an overview of strength.

That is not to say it is a panacea. Tom Roach’s article helpfully summarised why an overemphasis on the marketing funnel can be problematic [2]. In particular, it can create issues when used as a measure of marketing effectiveness or to guide media choices. This is because it overlooks the feedback loop that each level has on another (e.g. usage leads to familiarity) and does not directly recognise that marketing and the purchase process rarely work in such a linear way.

That being said, according to our own research and that of other agencies [3], consideration has a very close relationship with sales and sales growth.

At Brand Finance, we have therefore created a model derived from our research of over 4,000 brands in over 30 sectors in over 40 countries, which can be used to predict sales growth as a result of long-term brand equity and awareness.

This model is called the BrandBeta® and is calculated as a combination of brand familiarity and consideration conversion, being the proportion of people familiar with a brand who are willing to consider it. The BrandBeta® model is highly predictive of share.

In fact, our analysis shows that, when combined, familiarity and consideration conversion explain over 80% of the variance in market share within the categories covered.

Analysing the impact of familiarity and consideration conversion, we noted that familiarity explains approximately 65% of the variance in share, while consideration conversion explains approximately 35%. BrandBeta® is therefore a combination of the two measures in the ratio (65:35).

This combination creates a score out of 10 which our additional analysis shows can be used to predict market share growth.

This relationship is across all countries and sectors although there are some small differences in the effects between them. The results for the UK can be seen below:

However, as well as this prediction of share we also need to understand the factors which drive consideration conversion and familiarity.

Marketing activities and past experiences influence familiarity while Brand attributes - such as quality, coolness, availability and trust – influence the likelihood to consider and should be researched. Within Brand Finance’s syndicated research we separate sectors in to in-depth (Tier 1) research sectors and high-level (Tier 2) research sectors.

Within “Tier 1” sectors, these explanatory brand attribute measures are researched. In the “Tier 2” sectors, additional research can be performed as necessary in order to give diagnostic detail on how to improve brand positioning and messaging to influence likelihood to consider and therefore purchase.

Even without these detailed metrics, however, brand strength in the minds of consumers can be summed up by this BrandBeta® figure and later explained more thoroughly through the use of more in-depth research.

BrandBeta® refers to the position of brands within customers minds – awareness and perceptions. This is how the brand is currently perceived by customers and as I have stated, this is an essential part of any brand evaluation.

That being said, a full understanding of a brand’s strength requires an understanding of all stakeholders. It also requires an understanding of the ‘inputs’ (in the form of marketing activities and brand/product attributes) that will influence perceptions in to the future as well as an understanding of whether perceptions are having the desired effect on outcomes (i.e. the demand curve mentioned above). This is neatly summarised in a “Brand Strength Index” about which I talk in a separate article [4].

[1] Section 2 of the Singapore Trade Marks Act

[2] Tom Roach, 01/09/2021, The sales funnel is wrong but it’s here to stay, so let’s fix it., https://thetomroach.com/2021/09/01/the-sales-funnel-is-wrong-but-its-here-to-stay-lets-fix-it/

[3] Gain Theory, 2018, The Long Term Impact of Media Investment, https://www.gaintheory.com/the-long-term-impact-of-media-investment/

[4] Alex Haigh, 02 December 2021, Brand Strength Index: Creating a scorecard for your brand, https://brandfinance.com/insights/brand-strength-index-creating-a-scorecard-for-your-brand

2. Why do brands and brand strength matter?

Brand Strength is “in laymen’s terms how ‘good’ the brand is, and the impact it has on stakeholders’ actions: whether to buy the product, what price to pay, whether to work for an organisation, etc” and brands are the tool by which this strength is harnessed and exploited.

BrandBeta is a composite metric combining brand familiarity and consideration to purchase among those familiar. Together, the measure shows a strong relationship with usage and market share for brands in many markets.

BrandBeta’s more in-depth cousin the “Brand Strength Index” digs deeper into what is causing the BrandBeta results and also benchmarking its success in causing improved performance on the value drivers for the branded business/organisation.

Given that the intention of most marketers working for profit-seeking firms is to increase demand, BrandBeta and Brand Strength more generally can therefore be considered key concepts and useful to see how marketing’s activity changes the needle.

This relevance can be shown quite clearly by the use of two example industries.

BrandBeta in action: the US car industry

Over the last five years we have researched the car-buying public in around 20 countries per year, including in the United States of America.

The graph below shows the results of all automobile brands in the US car market according to our BrandBeta score compared against their market share in the relevant year.

The R² figure shows the fit of the results to the trendline with a number closer to 1 indicating a perfect fit. The figure is above 0.9 indicating a very strong relationship as we have seen in virtually all sectors in all markets.

What is particularly interesting with this set of data is that there appears to be a double jeopardy rule. In other words, the higher a brand’s familiarity and consideration the more their market share will grow per additional unit of familiarity and consideration.

As others have recognised, this can be explained by a tendency for larger brands to have higher loyalty.

It also appears to us to be because consumers have a closer understanding and relationship with larger brands and are more able to positively differentiate their offer from others. In other words, not only are more people familiar with the brands but that the people who are familiar are each individually more familiar with the brands too.

The implications of this finding is that in many cases, a branded business which wants to make sure it is maximising its impact may want to focus itself on markets where it can dominate rather than spreading itself thinly across multiple markets where it is dominant in none.

BrandBeta in action: Banks in ASEAN

To highlight this effect in a different way, I have selected a data set relevant to my role as Managing Director of Brand Finance Asia Pacific – Banks in the countries of the Association of South East Asian Nations (ASEAN).

We regularly research bank brands in Indonesia, Thailand, Malaysia, Vietnam and Singapore and have this year started to do the same in the Philippines. The below graph shows results for the former 5 markets last year compared to the year before.

Rather than showing overall numbers for BrandBeta and market share, it shows the relationship between changes in each on the other. In other words, it shows whether you should expect usage increases if you have an increase in BrandBeta.

The results show that the short answer is that yes, you should. The R² figure which shows the strength of the relationship is 0.53 meaning that usage can be expected to increase as BrandBeta increases and that can be expected the majority of the time. As you can see in the top left and bottom right quadrants there are some outliers but not many.

What this helps to show is that the relationship is not circumstantial but that as you improve brand beta, your market share is likely to move positively too.

What does this mean?

BrandBeta, and more importantly, the measures that underpin it are therefore key measures to track. What is useful about it too is that, by requiring a very small number of measures, it can drastically decrease a tracking budget.

As a result, you can track a brand regularly for a limited budget. This can free up budget to only invest in a larger diagnostic tracker, brand strength index and even brand valuation every year when the budgeting cycle comes up for review or if there is a big change in the measures within BrandBeta that needs explanation while also providing some core brand health KPIs that can be used for analytics like marketing mix modelling.

3. What are the most popular brands?

At Brand Finance we’re known for our rankings and in that respect, this analysis doesn’t disappoint. And while rankings are not the only concern one should have, they can clearly be useful for understanding one’s performance.

In the table below you can see the top brands by BrandBeta in each country where we have researched at least 10 sectors. These can also be considered the “Most Popular” given that they are the ones most well known and most likely to be considered among all brands researched.

What you can see from the list of brands and countries is the prevalence of brands from certain sectors. In particular, Supermarkets/Retail make up 10 of the most popular brands in the 26 countries and Media makes up 8.

Brands in these high usage, low cost (or in the case of media nil cost) sectors tend to have higher familiarity and consideration than other sectors – for example banking or insurance where there is often low day-to-day interest in brands or automobiles where regularity of purchase is low. It is therefore useful to look by sector and even by sector within country since this can be used to compare against market share more effectively.

Unfortunately, given the space I have I cannot list the ranks of the most popular brands in all sectors and countries we have researched for Brand Finance’s Global Brand Equity Monitor database so I will focus on some special sectors close to my home here in Asia.

Looking at Banks in Singapore, market leaders DBS/POSB clearly lead the pack, with DBS commanding a BrandBeta score more than 1 pt above OCBC. DBS’ brand value is almost double that of each of OCBC and UOB, a fact which is explained in large part by this difference in popularity.

DBS, initials which originally stood for the Development Bank of Singapore, has been an important part of Singapore’s miracle growth story from independence. Since 2009, when it installed current CEO Piyush Gupta after 10 bumpy years with 5 different CEOs, it has transformed itself in to a regionally leading bank with customer-centricity at its core and leading the charge towards digitalisation in banking. As a result, it has largely staved off challenges from the 5 recently accredited digital banks in Singapore and strengthened its lead against the other members of the big 3 – OCBC and UOB – in Singapore.

Moving to Australia, if we review the Telecoms sector we can see how Telstra is not only leading but is increasing its lead as Optus was hit by a massive data leak late in 2022.

Optus, which happens to be a subsidiary of Singapore-based Singtel, and is the second largest Telecoms company in Australia, was hit by a data breach back in September 2022. This led to the release of large quantities of personal data on about 40% of Australia’s population (10 million people).  As a result of the breach, Optus’ customer loyalty and perceptions of trust are significantly down and as a result so is its popularity – a sign of an important trend.

As you can see, this BrandBeta® metric can be a useful way to show popularity between brands and track performance year on year. The results can be analysed across category and country and by reviewing the results regularly, you can have a good sense of whether things are going wrong or right. And if they’re not going well, a warning to do something about it.

4. What can you do to build Brand Popularity and Strength? The Brand Beta Model

At Brand Finance, we spend our time analysing the impact of brand reputation on financial performance and on how businesses can use marketing spend, brand strategy and other tools to maximise that impact. We therefore feel we are in a uniquely privileged position to identify what drives people towards choosing one brand rather than another.

As we have established previously through our Brand Beta analysis, brands are able to impact the performance of a business firstly if they are well known and understood and secondly when they command certain perceptions in people’s minds that positively influence their likelihood to purchase or interact with them.

There are different models to explain this, some more complicated than others. However, as I’ve mentioned, in general there are two core points driving the popularity and therefore growth in brands.

1. Awareness and Recall at the point of sale or consideration
2. Relevant/Meaningful Differentiation while considering.

Our Brand Beta analysis has shown the first point to be approximately twice as important as the second. However, there continues to be argument about this relative importance.

In particular, there is contention over what constitutes relevant differentiation. This is why I have made the deliberate distinction between functional and emotional differentiation in the model below since the ability of brands to differentiate on emotional factors is an area of dispute.

Title: The Brand Strength Pyramid. Source: Brand Finance

At the foot of the pyramid is familiarity and salience.

Salience refers to the situation whereby the brand is immediate to the mind of people at the point when they would choose that brand over others. While this represents something a little beyond brand familiarity, it is related concept and encompasses general awareness too.

As Jenna Romaniuk, Byron Sharp and the rest of the Ehrenberg-Bass Institute point out[1], this Salience is often created and reinforced by brands that are distinctive – i.e. easily distinguishable in people’s minds from other brands – as opposed to differentiated. That is, that they have “assets” – for example slogans, colours, patterns, sounds, mascots etc – that help them be more memorable and easier to distinguish. These assets only become powerful and distinctive through continued, consistent use where they are widely seen by the public. In particular, where these assets are widely advertised or promoted over a long period of time.

The implication of this is that products and companies should not change their slogans, mascots, designs etc too often. Assets that are imperfect but consistent and well known may be more powerful than a modernised design or a strapline which explains slightly better the purpose or new positioning of the brand.

Additionally, companies and products should be rebranded as infrequently as possible. Even minor name changes create big mental inconsistencies that are often difficult and costly to recover. A full name change in particular is more often than not a significant destroyer of value.

You can see this effect in the recent rebrand in 2021 of TOTAL to TotalEnergies. What seems like a small change was not widely understood by the public. Taking a sample of 5 European countries, we found that in the year of the rebrand there was significantly lower familiarity towards the new brand despite it being widely used. Over the following year, large amounts of investment were needed to build familiarity back up to its previous level.

Source: Brand Finance Global Brand Equity Monitor

The exceptions to this destruction of value are where the company is rebranded to a brand that is (or will very soon be) better known and liked than the one it is replacing or where the company is associated with a scandal so great that its brand is irreparably damaging to the business. Although in the latter example the irreparability criterion is rarely reached.

Additional to consistent, widespread promotion, our own previous work on this subject for clients finds that these assets are significantly more effective when they are applied to a high standard. For example, where petrol forecourts are appropriately painted and the brand identity properly applied, we have found significant uplifts in demand compared to those forecourts with the same brand but a visual identity applied to a lower and less consistent quality.

Moving beyond salience in the pyramid, there are the two types of differentiation “Emotional” and “Functional”.

Additionally to being distinctive, brands are strong because they are associated with positive attributes of the branded offer. These attributes can relate to both the functional qualities of the product or service offer or they can relate to more emotional attributes (like the positive perceptions of being independently owned or saying something about one’s own self-identity). In both cases, these are assumed and therefore not totally rational.

These areas of differentiation can be found via market research and plotted on a correspondence map to identify relative positioning of each brand. It is worth doing so in order to identify what is driving customer purchase among different target audiences and where a specific brand is doing well or badly.

However, it is easy to overstate the importance of being different. Using the banking industry as an example, Brand Finance’s Global Brand Equity Monitor study of 722 banking brands in 35 different markets, we find a weak relationship between the percentage of respondents who say the brand “Genuinely Offers Something Different” and their consideration to purchase.

Source: Brand Finance Global Brand Equity Monitor

The graph above plots % of respondents agreeing the brand “Genuinely Offers Something Different” versus their consideration to purchase. We note a positive relationship but one where this measure only explains 19% (0.1921) of variance, indicating a weak relationship.

Additionally, many of the brands that strengthen the relationship are fintech brands like GCash a payment service in the Philippines or Revolut – a British Fintech company – which do not, in any case, offer a full service banking offer. This means that being genuinely different is an even weaker predictor of choice in banking than the graph suggests.

But before you say that banking is a particularly unique industry in within which people value steady predictability, we have found this relationship in other sectors too. Having completed this analysis also on the car industry across the 18 markets we research, I can confirm that the relationship is no stronger there. Only about 18% of variance is explained by this measure.

In reality, this is unsurprising. The biggest and most popular brands will come to dominate the market, begin to resemble it and therefore no longer be different. Difference is the victim of success. Uber started off as offering something different to the market but is now so dominant that it just represents it. Over time, difference recedes in importance and something else becomes more important.

What that something else is, however, a source of discussion. Byron Sharp’s books make the case that acquisition is everything, acquisition is largely driven by mental and physical availability (as opposed to differentiation) and that loyalty is more or less just a function of size. This implies that a focus on any sort of differentiation or on improving perceived experience is wasteful when you could focus on improving salience and distribution.

Our Brand Beta analysis highlights that familiarity and therefore mental availability are important for demand but that customers also do differentiate among the brands that they know of and have an ability to purchase.

It is therefore important, at least to a certain extent, to build positive perceptions of your brand and its offer so as not to dissuade those who would otherwise be acquired as a result of your brand’s salience. This creates preference both among new potential buyers and also maintains it among current customers, helping to influence loyalty – at least a little bit!

Title: Brand Value Chain. Source: Brand Finance

Our “Brand Value Chain” schematic above helps to show what this means for people who are trying to build brands.

Paid, earned and owned media need to be managed appropriately in order to build Awareness, Familiarity and Salience. These media exposures need to be sustained at a high level for a long period of time. Within short time periods (i.e. months) there is declining effectiveness as multiple exposures to the same audience have diminishing effects.

However, over long periods, all things being equal (e.g. the effectiveness of the advertising) more is better since the more you spend, the more economies of scale you receive in the form both of discounts from media but also in terms of the memorability of advertising.

Additionally, the likelihood to consider needs to be built among those with whom salience already exists. This should be built through a segmentation, targeting and positioning approach whereby the brand’s offer (its “personality” as well as its price, distribution and other functional factors) are matched with those customers that are likely to be in the market for a product or service of the type you are able to offer.

Salience and positive perceptions (i.e. emotional and functional differentiation) therefore need to be built together.

Related to this, one interesting point to end on is the impact of failing to promote your brand. There have been various studies on the impact of stopping advertising but a recent one by the Ehrenberg-Bass Institute reviewed 70 consumer goods brands in Australia in order to see the impact on sales of stopping advertising completely. They found that when you stop promoting brands entirely, sales volume starts to reduce immediately and on average reduces by about 15% a year.

This highlights the long-term value of brands. Promotional activities are needed to replenish the stock of salience. Good brand governance, a clear customer proposition, consistent, memorable messaging and a strong product, price and ability to distribute make those promotional activities effective and build differentiation.

However, these activities have effects beyond the current year. They are an investment in the future performance and growth of the business. Therefore the acts of identifying the sources of that value, its potential to depreciate and then the level of investment needed to improve value are a necessary part of understanding, managing and building long-term effectiveness.

So, in short, building brands is a marathon, not a sprint. It needs long-term investment in promotion which is consistent, memorable and includes familiar cues (“assets”) but it also needs a clear customer proposition which is effectively delivered. What this proposition should be and how much you in particular should spend to promote it, however, is the next question. Please get in touch so we can help you figure that out!

References:
- Romaniuk J, 2018, Building Distinctive Brand Assets, Oxford University Press

For more information about how we evaluate brands, visit Brand Valuation Methodology | Brandirectory

Analysing Brand Strength and why it matters

Every day at Brand Finance we are tasked with evaluating the strength of brands and marketing and valuing the impact of that strength. Within that task lies a requirement to answer different layers of questions including:

1. What is a brand and what makes it strong?
2. Why do brands and brand strength matter?
3. What are the most popular brands?
4. What can you do to build Brand Popularity and Strength? – The Brand Beta model

The following series of short articles is intended to explain how we do that and what that means for businesses.

4. What can you do to build Brand Popularity and Strength? The Brand Beta Model

At Brand Finance, we spend our time analysing the impact of brand reputation on financial performance and on how businesses can use marketing spend, brand strategy and other tools to maximise that impact. We therefore feel we are in a uniquely privileged position to identify what drives people towards choosing one brand rather than another.

As we have established previously through our Brand Beta analysis, brands are able to impact the performance of a business firstly if they are well known and understood and secondly when they command certain perceptions in people’s minds that positively influence their likelihood to purchase or interact with them.

There are different models to explain this, some more complicated than others. However, as I’ve mentioned, in general there are two core points driving the popularity and therefore growth in brands.

1. Awareness and Recall at the point of sale or consideration
2. Relevant/Meaningful Differentiation while considering.

Our Brand Beta analysis has shown the first point to be approximately twice as important as the second. However, there continues to be argument about this relative importance.

In particular, there is contention over what constitutes relevant differentiation. This is why I have made the deliberate distinction between functional and emotional differentiation in the model below since the ability of brands to differentiate on emotional factors is an area of dispute.

Title: The Brand Strength Pyramid. Source: Brand Finance

At the foot of the pyramid is familiarity and salience.

Salience refers to the situation whereby the brand is immediate to the mind of people at the point when they would choose that brand over others. While this represents something a little beyond brand familiarity, it is related concept and encompasses general awareness too.

As Jenna Romaniuk, Byron Sharp and the rest of the Ehrenberg-Bass Institute point out[1], this Salience is often created and reinforced by brands that are distinctive – i.e. easily distinguishable in people’s minds from other brands – as opposed to differentiated. That is, that they have “assets” – for example slogans, colours, patterns, sounds, mascots etc – that help them be more memorable and easier to distinguish. These assets only become powerful and distinctive through continued, consistent use where they are widely seen by the public. In particular, where these assets are widely advertised or promoted over a long period of time.

The implication of this is that products and companies should not change their slogans, mascots, designs etc too often. Assets that are imperfect but consistent and well known may be more powerful than a modernised design or a strapline which explains slightly better the purpose or new positioning of the brand.

Additionally, companies and products should be rebranded as infrequently as possible. Even minor name changes create big mental inconsistencies that are often difficult and costly to recover. A full name change in particular is more often than not a significant destroyer of value.

You can see this effect in the recent rebrand in 2021 of TOTAL to TotalEnergies. What seems like a small change was not widely understood by the public. Taking a sample of 5 European countries, we found that in the year of the rebrand there was significantly lower familiarity towards the new brand despite it being widely used. Over the following year, large amounts of investment were needed to build familiarity back up to its previous level.

Source: Brand Finance Global Brand Equity Monitor

The exceptions to this destruction of value are where the company is rebranded to a brand that is (or will very soon be) better known and liked than the one it is replacing or where the company is associated with a scandal so great that its brand is irreparably damaging to the business. Although in the latter example the irreparability criterion is rarely reached.

Additional to consistent, widespread promotion, our own previous work on this subject for clients finds that these assets are significantly more effective when they are applied to a high standard. For example, where petrol forecourts are appropriately painted and the brand identity properly applied, we have found significant uplifts in demand compared to those forecourts with the same brand but a visual identity applied to a lower and less consistent quality.

Moving beyond salience in the pyramid, there are the two types of differentiation “Emotional” and “Functional”.

Additionally to being distinctive, brands are strong because they are associated with positive attributes of the branded offer. These attributes can relate to both the functional qualities of the product or service offer or they can relate to more emotional attributes (like the positive perceptions of being independently owned or saying something about one’s own self-identity). In both cases, these are assumed and therefore not totally rational.

These areas of differentiation can be found via market research and plotted on a correspondence map to identify relative positioning of each brand. It is worth doing so in order to identify what is driving customer purchase among different target audiences and where a specific brand is doing well or badly.

However, it is easy to overstate the importance of being different. Using the banking industry as an example, Brand Finance’s Global Brand Equity Monitor study of 722 banking brands in 35 different markets, we find a weak relationship between the percentage of respondents who say the brand “Genuinely Offers Something Different” and their consideration to purchase.

Source: Brand Finance Global Brand Equity Monitor

The graph above plots % of respondents agreeing the brand “Genuinely Offers Something Different” versus their consideration to purchase. We note a positive relationship but one where this measure only explains 19% (0.1921) of variance, indicating a weak relationship.

Additionally, many of the brands that strengthen the relationship are fintech brands like GCash a payment service in the Philippines or Revolut – a British Fintech company – which do not, in any case, offer a full service banking offer. This means that being genuinely different is an even weaker predictor of choice in banking than the graph suggests.

But before you say that banking is a particularly unique industry in within which people value steady predictability, we have found this relationship in other sectors too. Having completed this analysis also on the car industry across the 18 markets we research, I can confirm that the relationship is no stronger there. Only about 18% of variance is explained by this measure.

In reality, this is unsurprising. The biggest and most popular brands will come to dominate the market, begin to resemble it and therefore no longer be different. Difference is the victim of success. Uber started off as offering something different to the market but is now so dominant that it just represents it. Over time, difference recedes in importance and something else becomes more important.

What that something else is, however, a source of discussion. Byron Sharp’s books make the case that acquisition is everything, acquisition is largely driven by mental and physical availability (as opposed to differentiation) and that loyalty is more or less just a function of size. This implies that a focus on any sort of differentiation or on improving perceived experience is wasteful when you could focus on improving salience and distribution.

Our Brand Beta analysis highlights that familiarity and therefore mental availability are important for demand but that customers also do differentiate among the brands that they know of and have an ability to purchase.

It is therefore important, at least to a certain extent, to build positive perceptions of your brand and its offer so as not to dissuade those who would otherwise be acquired as a result of your brand’s salience. This creates preference both among new potential buyers and also maintains it among current customers, helping to influence loyalty – at least a little bit!

Title: Brand Value Chain. Source: Brand Finance

Our “Brand Value Chain” schematic above helps to show what this means for people who are trying to build brands.

Paid, earned and owned media need to be managed appropriately in order to build Awareness, Familiarity and Salience. These media exposures need to be sustained at a high level for a long period of time. Within short time periods (i.e. months) there is declining effectiveness as multiple exposures to the same audience have diminishing effects.

However, over long periods, all things being equal (e.g. the effectiveness of the advertising) more is better since the more you spend, the more economies of scale you receive in the form both of discounts from media but also in terms of the memorability of advertising.

Additionally, the likelihood to consider needs to be built among those with whom salience already exists. This should be built through a segmentation, targeting and positioning approach whereby the brand’s offer (its “personality” as well as its price, distribution and other functional factors) are matched with those customers that are likely to be in the market for a product or service of the type you are able to offer.

Salience and positive perceptions (i.e. emotional and functional differentiation) therefore need to be built together.

Related to this, one interesting point to end on is the impact of failing to promote your brand. There have been various studies on the impact of stopping advertising but a recent one by the Ehrenberg-Bass Institute reviewed 70 consumer goods brands in Australia in order to see the impact on sales of stopping advertising completely. They found that when you stop promoting brands entirely, sales volume starts to reduce immediately and on average reduces by about 15% a year.

This highlights the long-term value of brands. Promotional activities are needed to replenish the stock of salience. Good brand governance, a clear customer proposition, consistent, memorable messaging and a strong product, price and ability to distribute make those promotional activities effective and build differentiation.

However, these activities have effects beyond the current year. They are an investment in the future performance and growth of the business. Therefore the acts of identifying the sources of that value, its potential to depreciate and then the level of investment needed to improve value are a necessary part of understanding, managing and building long-term effectiveness.

So, in short, building brands is a marathon, not a sprint. It needs long-term investment in promotion which is consistent, memorable and includes familiar cues (“assets”) but it also needs a clear customer proposition which is effectively delivered. What this proposition should be and how much you in particular should spend to promote it, however, is the next question. Please get in touch so we can help you figure that out!

References:
- Romaniuk J, 2018, Building Distinctive Brand Assets, Oxford University Press

For more information about how we evaluate brands, visit Brand Valuation Methodology | Brandirectory

Every day at Brand Finance we are tasked with evaluating the strength of brands and marketing and valuing the impact of that strength. Within that task lies a requirement to answer different layers of questions including:

1. What is a brand and what makes it strong?
2. Why do brands and brand strength matter?
3. What are the most popular brands?
4. What can you do to build Brand Popularity and Strength? – The Brand Beta model

The following series of short articles is intended to explain how we do that and what that means for businesses.

3. What are the most popular brands?

At Brand Finance we’re known for our rankings and in that respect, this analysis doesn’t disappoint. And while rankings are not the only concern one should have, they can clearly be useful for understanding one’s performance.

In the table below you can see the top brands by BrandBeta in each country where we have researched at least 10 sectors. These can also be considered the “Most Popular” given that they are the ones most well known and most likely to be considered among all brands researched.

What you can see from the list of brands and countries is the prevalence of brands from certain sectors. In particular, Supermarkets/Retail make up 10 of the most popular brands in the 26 countries and Media makes up 8.

Brands in these high usage, low cost (or in the case of media nil cost) sectors tend to have higher familiarity and consideration than other sectors – for example banking or insurance where there is often low day-to-day interest in brands or automobiles where regularity of purchase is low. It is therefore useful to look by sector and even by sector within country since this can be used to compare against market share more effectively.

Unfortunately, given the space I have I cannot list the ranks of the most popular brands in all sectors and countries we have researched for Brand Finance’s Global Brand Equity Monitor database so I will focus on some special sectors close to my home here in Asia.

Looking at Banks in Singapore, market leaders DBS/POSB clearly lead the pack, with DBS commanding a BrandBeta score more than 1 pt above OCBC. DBS’ brand value is almost double that of each of OCBC and UOB, a fact which is explained in large part by this difference in popularity.

DBS, initials which originally stood for the Development Bank of Singapore, has been an important part of Singapore’s miracle growth story from independence. Since 2009, when it installed current CEO Piyush Gupta after 10 bumpy years with 5 different CEOs, it has transformed itself in to a regionally leading bank with customer-centricity at its core and leading the charge towards digitalisation in banking. As a result, it has largely staved off challenges from the 5 recently accredited digital banks in Singapore and strengthened its lead against the other members of the big 3 – OCBC and UOB – in Singapore.

Moving to Australia, if we review the Telecoms sector we can see how Telstra is not only leading but is increasing its lead as Optus was hit by a massive data leak late in 2022.

Optus, which happens to be a subsidiary of Singapore-based Singtel, and is the second largest Telecoms company in Australia, was hit by a data breach back in September 2022. This led to the release of large quantities of personal data on about 40% of Australia’s population (10 million people).  As a result of the breach, Optus’ customer loyalty and perceptions of trust are significantly down and as a result so is its popularity – a sign of an important trend.

As you can see, this BrandBeta® metric can be a useful way to show popularity between brands and track performance year on year. The results can be analysed across category and country and by reviewing the results regularly, you can have a good sense of whether things are going wrong or right. And if they’re not going well, a warning to do something about it.

For more information about how we evaluate brands, visit Brand Valuation Methodology | Brandirectory

Every day at Brand Finance we are tasked with evaluating the strength of brands and marketing and valuing the impact of that strength. Within that task lies a requirement to answer different layers of questions including:

1. What is a brand and what makes it strong?
2. Why do brands and brand strength matter?
3. What are the most popular brands?
4. What can you do to build Brand Popularity and Strength? – The Brand Beta model

The following series of short articles is intended to explain how we do that and what that means for businesses.

2. Why do brands and brand strength matter?

Brand Strength is “in laymen’s terms how ‘good’ the brand is, and the impact it has on stakeholders’ actions: whether to buy the product, what price to pay, whether to work for an organisation, etc” and brands are the tool by which this strength is harnessed and exploited.

BrandBeta is a composite metric combining brand familiarity and consideration to purchase among those familiar. Together, the measure shows a strong relationship with usage and market share for brands in many markets.

BrandBeta’s more in-depth cousin the “Brand Strength Index” digs deeper into what is causing the BrandBeta results and also benchmarking its success in causing improved performance on the value drivers for the branded business/organisation.

Given that the intention of most marketers working for profit-seeking firms is to increase demand, BrandBeta and Brand Strength more generally can therefore be considered key concepts and useful to see how marketing’s activity changes the needle.

This relevance can be shown quite clearly by the use of two example industries.

BrandBeta in action: the US car industry

Over the last five years we have researched the car-buying public in around 20 countries per year, including in the United States of America.

The graph below shows the results of all automobile brands in the US car market according to our BrandBeta score compared against their market share in the relevant year.

The R² figure shows the fit of the results to the trendline with a number closer to 1 indicating a perfect fit. The figure is above 0.9 indicating a very strong relationship as we have seen in virtually all sectors in all markets.

What is particularly interesting with this set of data is that there appears to be a double jeopardy rule. In other words, the higher a brand’s familiarity and consideration the more their market share will grow per additional unit of familiarity and consideration.

As others have recognised, this can be explained by a tendency for larger brands to have higher loyalty.

It also appears to us to be because consumers have a closer understanding and relationship with larger brands and are more able to positively differentiate their offer from others. In other words, not only are more people familiar with the brands but that the people who are familiar are each individually more familiar with the brands too.

The implications of this finding is that in many cases, a branded business which wants to make sure it is maximising its impact may want to focus itself on markets where it can dominate rather than spreading itself thinly across multiple markets where it is dominant in none.

BrandBeta in action: Banks in ASEAN

To highlight this effect in a different way, I have selected a data set relevant to my role as Managing Director of Brand Finance Asia Pacific – Banks in the countries of the Association of South East Asian Nations (ASEAN).

We regularly research bank brands in Indonesia, Thailand, Malaysia, Vietnam and Singapore and have this year started to do the same in the Philippines. The below graph shows results for the former 5 markets last year compared to the year before.

Rather than showing overall numbers for BrandBeta and market share, it shows the relationship between changes in each on the other. In other words, it shows whether you should expect usage increases if you have an increase in BrandBeta.

The results show that the short answer is that yes, you should. The R² figure which shows the strength of the relationship is 0.53 meaning that usage can be expected to increase as BrandBeta increases and that can be expected the majority of the time. As you can see in the top left and bottom right quadrants there are some outliers but not many.

What this helps to show is that the relationship is not circumstantial but that as you improve brand beta, your market share is likely to move positively too.

What does this mean?

BrandBeta, and more importantly, the measures that underpin it are therefore key measures to track. What is useful about it too is that, by requiring a very small number of measures, it can drastically decrease a tracking budget.

As a result, you can track a brand regularly for a limited budget. This can free up budget to only invest in a larger diagnostic tracker, brand strength index and even brand valuation every year when the budgeting cycle comes up for review or if there is a big change in the measures within BrandBeta that needs explanation while also providing some core brand health KPIs that can be used for analytics like marketing mix modelling.

For more information about how we evaluate brands, visit Brand Valuation Methodology | Brandirectory

Every day at Brand Finance we are tasked with evaluating the strength of brands and marketing and valuing the impact of that strength. Within that task lies a requirement to answer different layers of questions including:

1. What is a brand and what makes it strong?
2. Why do brands and brand strength matter?
3. What are the most popular brands?
4. What can you do to build Brand Popularity and Strength? – The Brand Beta model

The following series of short articles is intended to explain how we do that and what that means for businesses.

1. What is a brand and what makes it strong?

In order to talk about what makes a brand strong and set up for growth, it’s important to briefly define what we mean by “brand”.

When we speak about brands in the context of accounting or law, we consider brands to be “trademarks and their associate intellectual property” with this intellectual property being designs, domains, art works etc that are linked to the use of the trade marks.

Trademarks themselves are “any sign capable of being represented graphically and which is capable of distinguishing goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” [1]. In other words, in legal terms, trademarks are simply a signpost distinguishing one company, product or service from another.

As a result of this, “distinctiveness” from the signposts of another legal ‘person’ is the key determinant of whether a mark can be trademarked. Differentiation or reputation don’t even get a look-in, an important fact given the discussion in our industry on the importance of distinctiveness over differentiation in driving brand strength and growth.

However, the ability to trademark a brand does not necessarily mean that that brand is “strong”.

As my colleague at Brand Finance and Insights Director, Steve Thomson, has pointed in an article in April 2019 Brand Strength is “in laymen’s terms how ‘good’ the brand is, and the impact it has on stakeholders’ actions: whether to buy the product, what price to pay, whether to work for an organisation, etc”.

What this means is that brands are more than signposts. In reality, they are a unit of storage for the cumulative familiarity, reputation and appeal among all stakeholders (customers, employees, suppliers, investors and the external public) and a method for exploiting that familiarity, reputation and appeal through the use of clear, distinctive signposting.

This is why at Brand Finance we use the rounded definition of “A bundle of trademarks and associated IP which can be used to take advantage of the perceptions of all stakeholders to provide a variety of economic benefits to the entity”, when identifying brands in order to evaluate and value them.

Importantly, this highlights the fact that brands are there to satisfy customer needs better than the competition and to make money. The way they make money is to influence people to make decisions that are favourable to person, business, nation, organisation etc that they wouldn’t make for the same entity if it had a less strong brand.

Each stakeholder is different but customers are generally the most important, so this article focusses on them and how their view of brands affects profit-seeking businesses.

Among customers, the aim of brands is to make money and a strong brand will be one that stimulates the expansion of the demand curve when present compared to when not present. By stimulating additional demand, the brand has the effect of raising revenue and profit by either allowing for an increase in volume sold or price point or both.

Brands do this by having a higher level of penetration and awareness, and by stimulating a higher rate of conversion among non-customers (trial) and customers (loyalty) than other brands. In other words, they get more people to buy more (preferably at a higher price).

This effect is well summarised within the ‘marketing funnel’. The marketing funnel is a key construct when analysing the impact of brands on business performance. Customers and other stakeholders need to be aware of brands to consider them. Following this, the features of the product, service, price, availability, image etc as well as in some cases the nature of promotional activities lead people to consider and ultimately purchase branded products and services. The marketing funnel encompasses these effects into a simplified structure which provides an overview of strength.

That is not to say it is a panacea. Tom Roach’s article helpfully summarised why an overemphasis on the marketing funnel can be problematic [2]. In particular, it can create issues when used as a measure of marketing effectiveness or to guide media choices. This is because it overlooks the feedback loop that each level has on another (e.g. usage leads to familiarity) and does not directly recognise that marketing and the purchase process rarely work in such a linear way.

That being said, according to our own research and that of other agencies [3], consideration has a very close relationship with sales and sales growth.

At Brand Finance, we have therefore created a model derived from our research of over 4,000 brands in over 30 sectors in over 40 countries, which can be used to predict sales growth as a result of long-term brand equity and awareness.

This model is called the BrandBeta® and is calculated as a combination of brand familiarity and consideration conversion, being the proportion of people familiar with a brand who are willing to consider it. The BrandBeta® model is highly predictive of share.

In fact, our analysis shows that, when combined, familiarity and consideration conversion explain over 80% of the variance in market share within the categories covered.

Analysing the impact of familiarity and consideration conversion, we noted that familiarity explains approximately 65% of the variance in share, while consideration conversion explains approximately 35%. BrandBeta® is therefore a combination of the two measures in the ratio (65:35).

This combination creates a score out of 10 which our additional analysis shows can be used to predict market share growth.

This relationship is across all countries and sectors although there are some small differences in the effects between them. The results for the UK can be seen below:

However, as well as this prediction of share we also need to understand the factors which drive consideration conversion and familiarity.

Marketing activities and past experiences influence familiarity while Brand attributes - such as quality, coolness, availability and trust – influence the likelihood to consider and should be researched. Within Brand Finance’s syndicated research we separate sectors in to in-depth (Tier 1) research sectors and high-level (Tier 2) research sectors.

Within “Tier 1” sectors, these explanatory brand attribute measures are researched. In the “Tier 2” sectors, additional research can be performed as necessary in order to give diagnostic detail on how to improve brand positioning and messaging to influence likelihood to consider and therefore purchase.

Even without these detailed metrics, however, brand strength in the minds of consumers can be summed up by this BrandBeta® figure and later explained more thoroughly through the use of more in-depth research.

BrandBeta® refers to the position of brands within customers minds – awareness and perceptions. This is how the brand is currently perceived by customers and as I have stated, this is an essential part of any brand evaluation.

That being said, a full understanding of a brand’s strength requires an understanding of all stakeholders. It also requires an understanding of the ‘inputs’ (in the form of marketing activities and brand/product attributes) that will influence perceptions in to the future as well as an understanding of whether perceptions are having the desired effect on outcomes (i.e. the demand curve mentioned above). This is neatly summarised in a “Brand Strength Index” about which I talk in a separate article [4].

For more information about how we evaluate brands, visit Brand Valuation Methodology | Brandirectory

[1] Section 2 of the Singapore Trade Marks Act

[2] Tom Roach, 01/09/2021, The sales funnel is wrong but it’s here to stay, so let’s fix it., https://thetomroach.com/2021/09/01/the-sales-funnel-is-wrong-but-its-here-to-stay-lets-fix-it/

[3] Gain Theory, 2018, The Long Term Impact of Media Investment, https://www.gaintheory.com/the-long-term-impact-of-media-investment/

[4] Alex Haigh, 02 December 2021, Brand Strength Index: Creating a scorecard for your brand, https://brandfinance.com/insights/brand-strength-index-creating-a-scorecard-for-your-brand

Automobile brands in trouble

All this contributed to a rather disappointing outlook for automobile brand values in 2023. For the first time since 2017 – when Brand Finance first created a dedicated Automobile brand value ranking – aggregate brand values have fallen from $611 billion to $600 billion USD. Across the table, this meant that 68 brands out of 2022’s top 100 automobile brands ranking fell in value.

This fall in value highlights a trend for automobile brands that may be worrying for those looking after brands in the industry. This is the falling importance of automobile brands in the global brand ecosystem. Despite massive falls in the value of Tech brands and an overall fall in value for our Global 500 top most valuable brands ranking, automobile brands continue to fall in aggregate terms in overall value terms.

What you can see from the graph above is that this fall is relative to a peak in 2021, which occurred just as government COVID relief payments had made their way to consumers, leading to strong growth in demand for physical products that people could enjoy despite social distancing rules. It remains to be seen whether this trend will continue, but there are some reasons to think that headwinds for the industry will continue in the medium term.

Rising costs, a warming planet and cooling interest among the young

As The Economist reported in a recent article, the young in many parts of the rich world are falling out of love with cars[1]. As the article points out, in the USA, one fifth of Americans between the age of 20 to 24 do not have a license up from one twelfth in 1983 with journeys travelled also down significantly.

Rising concerns around climate change and the corresponding support for alternative modes of transport are putting pressure on demand. On the other hand, inflation, rising interest rates for car finance, volatile fuel prices and expensive electric models mean that costs remain high and unpredictable for consumers.

In order to complete our valuation analysis, every year we research the perceptions of around 150,000 respondents on 4,000 brands in over 35 markets across over 30 sectors within our Brand Finance Global Brand Equity Monitor study.

Within this study, you can see these cost pressures starting to affect consumer sentiment. Whereas last year, an average of 26.1% of respondents believed each brand represented “Great Value for Money”, this has dropped 15% in relative terms to 22.3% this year. It is clear that consumers are feeling the pinch.

Additional to rising costs, there is also a sense that cars may be losing their ‘cool’ factor. Steven Bartlett – known for his company Social Chain, which made him a multi-millionaire, being the youngest CEO on the UK’s Dragon’s Den (equivalent of Shark Tank) and now running a successful interview-based podcast series – was asked by guest Louis Theroux on a recent episode whether he owned a Bugatti. Steven’s response was that he didn’t own a car at all, a response that was met with no surprise by Theroux. This passing comment belies a growing truth for many young people. This is that cars are less aspirational for many compared to what they once were.

Automobile brands are not getting the promotional support they used to

This is not helped by a continuous decline in the amount spent on automobile brand promotion.

True to longer term trend, total marketing sales and related administrative costs continue to fall from 8.0% in 2016 to 6.0% in 2021.

This drop has come due to increased demands on Research and Development and CAPEX – as most OEM’s invest heavily in the Electric Vehicle transition. Pulling back from promotional spend could though be sacrificing a long-term benefit for the category on the altar of short-term cost-saving.

As Mark Ritson, the online marketing professor, pointed out in an article on Tesla’s recent need to discount[2], you need considerable amounts of advertising spend to reach the whole market (i.e. not only those who will soon buy a car) in order to continue growing after you reach a certain scale. Tesla was fortunate to have a very timely and innovative product proposition, strong ‘word of mouth’ approbation by influencers, and the unlimited PR value of a charismatic and often controversial CEO who is happy to be in the spotlight of world attention. For almost everyone else this fortune is not bestowed on all brands.

Importantly, marketing spend builds brand familiarity and salience which Brand Finance’s simple BrandBeta® model highlights is an important predictor of sales growth.

Derived from our Global Brand Equity Monitor, the model is called BrandBeta® and is calculated as a combination of brand familiarity and consideration conversion, being the proportion of people familiar with a brand who are willing to consider it. The BrandBeta® model is highly predictive of share.

The graph below shows the results of all automobile brands in the US car market according to our BrandBeta score compared against their market share in the relevant year over the last five years.

The R2 figure shows the fit of the results to the trendline with a number closer to 1 indicating a perfect fit. The figure is above 0.9 indicating a very strong relationship.

What is particularly interesting with this is that there appears to be a double jeopardy rule. In other words, the higher a brand’s familiarity and consideration the more their market share will grow per additional combined unit of familiarity and consideration (i.e. continuous economies of scale).

While this can partly be explained by the propensity for customers of larger brands to be more loyal, it also highlights another fact. The fact that not only is general familiarity important but depth of familiarity too.

Those brands with higher general familiarity (encompassing knowing the brand “a little” up to knowing the brand “very well”) have a much higher level of those respondents knowing the brand “very well”. For these respondents, the brand is (one of) the first to mind and therefore a much likelier purchase choice.

This strength of relationship is, of course, driven by experience but promotion is also key and reducing marketing spend will make this relationship harder to maintain and improve.

But consumer interest and government support show potential for a turnaround.

Despite this immediate gloom, there are reasons to be cheery. The passing of the USA’s Inflation Reduction Act paves the way for significant support for the transition to electric vehicles. As do the measures taken by other countries, particularly in Europe.

Electric vehicle (EV) focussed OEMs are storming up Brand Finance’s Top 100 Auto brands ranking: Tesla is now the most valuable automobile brand in the world for the first time; BYD was the fastest growing brand in the whole of Brand Finance’s top 500 most valuable Global brands ranking across all sectors and countries; Polestar, Rivian and other EV brands have made their way into and rocketed up within our table over the last couple of years.

And we appear to be close to an inflection point where costs of EV’s reach parity with traditional models as economies of scale work through.

As well as being pushed by governments, this trend is being pulled by consumers interested in buying more products that help them live more sustainable lives.

That needs to be borne in mind by OEMs. In the short run, the drive train is key, but in the longer-term there will be more comparison of the credentials of the full production process – from the use of rare minerals to the recycling of materials.

So, what does this mean for brands?

Much of what we highlighted last year remains true.

Cleaning up the production process of EVs and communicating that as a benefit will be key for the brands that are able to differentiate on this attribute. Careful coordination needs to be taken to avoid overclaiming while maintaining a perceived advantage over competitors. Brand Finance’s sustainability strategy team has put together a series of approaches explaining how this can be done effectively.

From a branding point of view, models need to avoid becoming copy-cats of others. As cars become integrated digital products, there has been a tendency to use nomenclature which references the digital aspect of the product for example with the prefix “ i ”. This approach could end up making it more difficult to make these models distinctive and differentiated compared to the other brands.

Finally, it is important to track both brand equity and brand value. The market for cars is changing in all markets quickly – from model types to sales channel and more. Keeping an eye on what attributes are important and where your brand stands from a brand equity point of view is key. Tracking brand value over time is also vital because it helps to highlight the need for long-term and effective marketing spend to support long-term demand. As pressures on marketing spend mount in the sector, assessing both equity dimensions and value will be vital to meet evolving consumer demands and to sustainable growth.

[1] “Driven away: Throughout the rich world, the young are falling out of love with cars”, The Economist, February 2023

[2] Tesla is about to experience the seven perils of discounting, Mark Ritson, 19 January 2023, Marketing Week, https://www.marketingweek.com/tesla-seven-perils-of-discounting/

Singapore’s Soft Power Index score rose from 48.5 to 51 but the nation brand fell one position to 21^st place this year. This drop may be attributed to Saudi Arabia’s noteworthy improvement which saw it climb five places to be ranked 19^th this year, as well as the fact that all other nation brands within 2022’s top 20 remained within 2023’s top 20.

In line with Singapore's reputation as a renowned business and financial hub, scores within the Business & Trade pillar were on an uptick, with its best showing in the “Easy to do business in and with” metric. However, its ranking fell in almost all metrics within this pillar except for this metric. This suggests some degree of outpacing by other nation brands, and is a reminder that standing still is not enough in a competitive race to the future. 

To illustrate what outpacing means, the United Arab Emirates jumped from 11^th to 3^rd place in the “Future Growth Potential” metric with a score improvement of 0.5 points to 5.9. In comparison, Thailand’s 0.4-score improvement to 5.4 saw it falling seven places to 22^nd for the same metric. Outpacing therefore implies that perceptions and attitudes of Singapore with respect to the Business & Trade pillar, although still optimistic, are close to approaching their maximum perceived potential while sentiments for fast-growing economies, such as those in the Middle East region, are reflected in their propensity for growth. This is in line with general outlooks on developed economies vis-à-vis developing economies or those that are rapidly internationalising. 

Our findings therefore suggest that Singapore would do well not only to continue to improve business and trade infrastructure, but also build on messaging aimed at stoking excitement for its plan to transform into a future-proofed economy and bolster its longstanding narrative of international business attractiveness. 

Singapore’s standing in the international community for good governance with an emphasis on integrity continues to garner strong positive sentiments observed by an overall score increase of 1.1 to 5.2 for metrics within the Governance pillar. However, it dropped three places to 19^th position for this pillar, once more suggesting outpacing as implied by the Business & Trade pillar. A strong brand positioning of governance first effected through the firm but effective policies of Lee Kuan Yew, Singapore’s founding prime minister seems to have successfully sustained positive perceptions of the nation brand in this regard – supported by neutral to positive overall Governance pillar scores since 2020. 

As the Governance pillar rankings suggest however, positive sentiments towards perceptions of Singapore may have simmered in juxtaposition with nation brands such as Iceland which climbed five places to be ranked 16^th for the Governance pillar via a 1.6-score increase on the overall to 5.2. Indeed, despite having the same overall score of 5.2, Iceland posted a larger score increase than Singapore, once again reflecting enthusiasm towards the former’s propensity in reaching its maximum perceived score. 

To conclude, Singapore’s performance in the 2023 Global Soft Power Index highlights the importance of taking into account not only score or rank variations of a nation brand but also the pacing of these variations in relation to other nation brands. From a branding perspective, we recommend that decision makers pace their messaging to regulate enthusiasm for their narratives as they continue to augment their nation brands’ Soft Power. 

Global Soft Power Index 2023

Explore the findings of the world's most comprehensive research study on perceptions of nation brands, presented in a downloadable report and an interactive dashboard.