Google Overtakes Apple At The Top 100 Most Valuable Brands

Google has regained its position at the top of the table in the 2016 BrandZ Top 100 Most Valuable Global Brands ranking, released by WPP and Millward Brown overtaking Apple on the back of a 32% increase to hit its best-ever brand value of $229.2 billion. Apple stands at £228.5 billion, down 8% from its 2015 value. 

Google Overtakes Apple At The Top 100 Most Valuable Brands

Google has thrived thanks to continual innovation, increased revenue from advertising, and growth in its cloud business.

By contrast, Apple tends to follow a trend of bi-annual surges of innovation along with keeping this pipeline secret. This, combined with the lost momentum in sales for the Apple Watch as well as the lack of a new market-defining handset, is reflected in the 2016 valuation for last year’s no.1.

For the second consecutive year, Facebook was the technology brand that rose the fastest in the BrandZ Top 100, growing 44% to $102.6 billion, a value that pushed it into the top ten for the first time. This was thanks to adding new features such as Friends’ Day, Disaster Alert and live video broadcast to its community platform, as well as attracting new publisher content. It is also proving highly successful in monetizing the move to mobile, attracting significant spending via its mobile ad platforms.

Overall, however, it’s been a less-than-triumphant year for the tech sector. After 2015’s 24% rise in total value for the Top 20 tech brands, 2016 has seen just a 6% rise. As a rule, hardware companies have performed less well with new areas such as wearables, watches and the Internet of things yet to deliver either financial or brand benefits. 

One company that has defied the hardware-service divide is Huawei, the low-cost smartphone manufacturer, which first entered the tech Top 20 last year. It has shown 22% growth to $18.7 billion following its emergence as the leading Chinese smartphone maker in China, and becoming a key rival for Apple in the rest of the world. This market leadership also allows Huawei to strengthen its premium position by raising prices.

Another success story that is indicative of future trends is the streaming TV service Netflix. It has been listed in the tech Top 20 for the first time with a brand value of $9.2bn.

That consumer perception that the B2B brands are less innovative – even if that isn’t always the case – has seen the proportion of total value in the technology Top 20 that is contributed by B2B brands decline from 56% in 2006 to just 26% in this year’s listing. 

“There is a clear imperative for tech brands to showcase their innovation pipeline both in order to convince consumers that they are working hard to change their consumers’ lives but also to allow investors to anticipate future growth more accurately. With complex supply chains, secrecy is no longer possible and Google has benefited from its corporate restructure which allows it to better showcase the innovations beyond its core search business,” said Elspeth Cheung, Global BrandZ Valuation Director at Millward Brown. 

The BrandZ Top 20 Most Valuable Global Technology Brands 2016 

Summary of the main global stories

Disruption is a catalyst for value growth. The categories that increased in value were all either shaken up by challenger brands founded on a unique and meaningful proposition, such as Under Armour and Victoria’s Secret in the apparel category (+14%), or innovated to a high degree in response to a new trend, such as the brands in the fast food category (+11%) which successfully responded to global demand for healthier products. 

Innovation is the main growth driver – but it must be seen and felt by consumers. The brands that are the strongest innovators have increased their value the most over the 11 years of BrandZ Top 100 rankings. However, to have an impact on brand value, innovation must be clearly communicated and delivered through the brand experience: the brands that are perceived as innovative by consumers – which include Disney (no.19) and Pampers (no.37) – grew nine times faster than those seen as less innovative.

Strong emotional connections are boosting local brands. With a clear understanding of their consumers’ needs, local brands are gaining market share at home and, with improved functionality and marketing, are also winning share in new regions. China’s Huawei (no.50, +22%), for example, has rapidly globalised and taken market share from both Apple and Samsung.

Apparel is the fastest growing category, rising 14% to $114bn. There is an emphasis on high performance, with brands including Nike (+26%) and Under Armour (a new entry) launching specialist premium lines, incorporating technology such as heart monitors into their clothing, and integrating sportswear with free apps to provide a total consumer experience.

B2B is a category of efficient businesses but inefficient brands. They are perceived as more responsible than B2C brands, better to work for, good value and stable, but not as exciting or dynamic. B2B brands are in fact highly innovative; ensuring they are credited as such requires strong and meaningful brand communication. SAP (no.22) and Adobe (a new entry at no.100) are among the B2B brands being perceived as innovative by customers.

The full global and tech ranking is available from www.millwardbrown.com/brandz