On the heels of its BrandZ Most Valuable Global Brands report, Kantar has more to say about the changing economics of branding -- and what propelled this year's Top 100 to rise 23% in value. J. Walker Smith, knowledge lead at Kantar, fills us in.
Marketing Daily: Can you explain how brand values are changing?
J. Walker Smith: BrandZ started in 2006, and we saw that as we moved through 2008, 2009 and 2010, there was some brand growth. Sure, the market dropped, but we always saw some year-over-year growth. But the performance coming out of the pandemic has far outstripped that. We just see something going on over the last two years that is different and a little more unexpected.
Marketing Daily: There have been plenty of headlines saying the pandemic has broken the Fed's model for predicting a recession. Has it maybe broken the model for predicting brand value?
Smith: Yes. Investment in brand value is helping drive companies through this disruption.
Marketing Daily: Is brand value related to what the Fed does, even a little?
Smith: Kind of, in that this is all unfamiliar territory. The economy is different now than what we've had before. We've been through 40 years of a deflationary period, and that's been the vocabulary we've used. It's been the expectation of consumers. And it's how we've managed brands.
Marketing Daily: Let's talk about some segments. In lots of ways, people have been hating on tech lately, especially in the government and the stock market. Yet tech brands dominate your Top 10, and Google -- No. 2 -- rose 79% in value. Why?
Smith: A couple of things are going on here. The pandemic was kind of this forced global involuntary experiment in a mostly digital lifestyle. So we went through a step change in digital.
But now we're resetting to a higher baseline. So digital brands are still growing, but they are resetting to pre-pandemic trend lines. The data we're seeing on slower growth in ecommerce and streaming services shows that.
Even as we get back to more analog experiences, we'll see a continued strength among technology companies in delivering solutions for consumers in new and innovative ways.
Marketing Daily: How about entertainment? Are we more or less enthusiastic about what we're bingeing on these days? Netflix only comes in at No. 30.
Smith: We do separate tracking of streaming. And we have seen some weakness in the U.S. market that points to a different strategy that companies like Netflix need to focus on. We see a strategic shift: new users versus more loyal customers, versus the importance of content.
Entertainment companies are going to need to make permanent changes as we come out of this long involuntary experiment.