Measuring the most valuable brands (the easy way)

Last week Millward Brown released the results of their BrandZ top 100 most valuable global brands list. The brand research geek in me is truly fascinated by brand equity research and ever since Millward Brown started releasing this data I’ve been following along. I have to commend them on all of the work they put into the research, it sure sounds like a pretty cool model but there’s this part of me wonders if this is too complicated. To test my theory I figured I’d try and replicate the top line results in my own biased way.

The commonly held belief is that the difference in assets and market cap is what’s accounted for by the brand. Understandably this is overstating things considerably since there are complicating factors. The one, and probably most important complicating factor is that it doesn’t take consumer opinion into consideration. One may argue that consumer opinion is built into the market cap through consumer transactions translating to revenue, but I feel that there are brands out there that are seen as bell weathers whether you buy the product or not. So for my model I included consumer opinion. In fact my experience has been that when you ask consumers a direct question you can be pretty confident that they’ll give you a straight answer. So with that in mind I assumed that if I just asked consumers what brands are the best they’ll give me the right answers. My goal with this project was to keep things simple, that means I wanted to see if I could replicate the topline results that Millward Brown had gotten from their BrandZ study but with a lot less work. I was looking to end up with the following ranking : Google, Microsoft, Coca Cola, IBM, McDonalds, Apple, ChinaMobile, GE, Vodafone, Marlboro.

Now to get started I needed the consumer opinions. Hmmmm, that’s a tough one considering I don’t have an army of panelists or dialing centers to gather a representative sample of the population. I had to go with the next best thing (well maybe the last best thing), a small survey of people I know. With the sample handled I needed a questionnaire. In the spirit of keeping things simple I decided all I needed for consumer opinions was to take the top 10 global brands as reported by Millward Brown and try to get the same ranking. The survey simply needed to ask the question: “Below is a list of 10 global brands. Can you please rank them from 1 to 10 based on your personal feeling on which brands are the most valuable brands. So basically take the brand that you feel is the worlds most valuable brand and rank that as #1, and then the second most valuable brand as #2 and so on and so forth.” With my sample and question in hand I set-up a SurveyMonkey survey and sent it to 12 of my colleagues and received 10 responses (the other 2 are dead to me). Of course since I’d asked for a ranking, and since ranking questions are difficult to analyze, normalizing the data was a necessity for the analysis. To do that I weighted all of the rankings for each of the brands to come up with an aggregate ranking that took into account the brand’s average weighted ranking.

As you can see from the example above Google comes up with an aggregate score of 7.5. Think of this as a weighted result that suggests that 7.5 of the 10 people thought Google was a valuable brand. Completing this exercise across all of the brands I had my consumer opinion data which I called aggregate consumer opinion. Looking at the ranking of aggregate consumer opinion scores for each of the brands I realized that my consumer survey was okay. The reality is the folks I talked to had no idea how to rate Vodafone or ChinaMobile. Not that I blame them, both companies branding efforts are directed overseas and not to the US. For the purposes of this analysis I decided to drop them from the results and try to replicate to ranking without those two brands. Now a second look at the US only ranking and viola! success.

Well sort of. I managed to duplicated the ranking with the exception of Apple which scored much higher on my list than it did on the BrandZ US list. I’m chalking this difference up to the fact that my sample all live in NY and work in the tech space: a clear bias toward Apple as a brand. But otherwise I was pretty happy with my results.

In retrospect I should have just asked the question unaided, that may have made a better experiment, but alas this blog is a hobby and no one’s paying me to do this so my effort ends there. Regardless of the veracity of my results I think the point I was trying to make still stands: despite the fact that us researchers like to get all complicated with methodology we often don’t give the population much credit. They have an opinion and often it reflects the same thing our fancy model will tell us, we just need to ask. The thing is researchers are doing what they do because they get a kick out of data, and trying out new approaches to analyzing data is mana from heaven. It’s really the same in many jobs out there, ask a surgeon and he’ll tell you he loves doing new procedures way more than the same boring stuff over and over again.

The reality is that the BrandZ study goes way beyond ranking of brands and provides a pretty cool scoring system for quantifying brand value (something I ignored). I can imagine it also serves as an excellent normative database for benchmarking brand value for clients. I guess what I’m saying it I think the research is pretty cool, but as is the case with all research that’s been summed up to a data nugget, I find it none too exciting to see a ranking of the top 10 global brands. As it turns out if I wanted that ranking I could have asked my friends.