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[12 comments]

Google becomes king of the global brand hill

May 22, 2014

Google is the most valuable brand on the planet, according to the 2014 BrandZ Top 100 Most Valuable Global Brand report by Millward Brown. Google's brand value increased 40 percent last year to $159 billion. Apple, which had topped the list for the past three years, slipped to the second spot as its brand value slipped 20 percent to $148 billion, according to the report.

"Google has been hugely innovative in the last year with Google Glass, investments in artificial intelligence and a multitude of partnerships that see its Android operating system becoming embedded in other goods such as cars, said Nick Cooper, managing director of Millward Brown Optimor, in a statement. "All of this activity sends a very strong signal to consumers about what Google is about and it has coincided with a slowdown at Apple."

Tech companies dominate the top of the BrandZ ranking with IBM and Microsoft holding the third and fourth spots. Other tech companies on the list include Tencent (14), SAP (19), Facebook (21), Baidu (25), Samsung (29), Oracle (45), HP (49), Accenture (55), Siemens (59), Yahoo! (69), Twitter (71), Cisco (72), LinkedIn (78) and Intel (86). Twitter and LinkedIn made the list for the first time this year.

"The highest-ranking non-tech brand is McDonald's, at No. 5," Oscar Yuan, VP at Millward Brown, told Forbes. "Even in a category as old and traditional as fast food, I'd say they're continuing to do the same (innovating). The fact that they've introduced things like McCafe — which is about taking a minute to savor and enjoy the free WiFi that McDonald's is offering — that changes people's perceptions about the brand. Innovation and change can come in any and all categories."

Amazon was the only company in the retail category to crack the top 10 brands. Walmart (22), Home Depot (40), IKEA (50), eBay (61), Tesco (66), Woolworths (82) and Aldi (100) also made the list.

Discussion Questions:

Is innovation the key to growing brand value in the modern world? What does it take to innovate in retail today?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Is innovation the most important attribute of brand value?

Comments:

Innovation is one factor, but not the only one. Retailers need to better understand their customers so they can deliver the products/services and an experience that surpasses their expectations.

Maybe we're just in a temporary down cycle, but between Q413 and Q114 retail really seems to be struggling. And let's be honest, most retailers don't have specialized talents to create their own earth shattering products like Apple, Amazon, Google, Samsung, etc.

Personally, I believe the evolution to becoming an omni-channel retailer offers the potential to unlock a great deal of innovation because it's going to force retailers to think more holistically about their business which will stimulate new ways of looking at it as opposed to their current siloing of their sales channels. This is something almost all retailers can pursue as opposed to trying to develop their own products that capture the masses attention.

My $.02.

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Bill Davis, Director, MB&G Consulting

One simplistic take on this is that Google has mastered the use of data management and analytics to bring truly meaningful change to people, and consumers are accepting and appreciative because the benefits are undeniable.

When retailers talk publicly about their use of Big Data, it mostly freaks people out. And so despite the gains many of us believe data analytics are making toward providing heightened customer experiences, those advances don't translate into an enhanced image for many of the retail brands involved. Put simply, it's a PR issue.

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Rick Moss, President, Founder, RetailWire LLC

It really isn't about innovation, it is about how these brands fit into our lives. Now, innovation may accelerate the usage of the brands, but it is not the answer in itself.

In fact, the list says more about consumer behavior than it does about innovation.

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Gene Detroyer, Professor, Independent

The funny thing is to give a careful think about what innovation means. Google's biggest breakthroughs generating profit are related to search, targeted ad serving, mobile, and YouTube. They did NOT invent search and they bought everything else. Apple did not invent the touch interface technology (Microsoft was ahead of them with Surface), but they cracked the code on commercialization by making it phone-sized. Microsoft on the list did not invent a windows-style interface, Apple did. Certainly, Marlboro didn't invent anything.

Having said this, there are some big innovators on the list like McDonalds, Coca-Cola (the formula!), and Amazon.

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Joel Rubinson, President, Rubinson Partners, Inc.

Innovation that is not targeted to meet customer needs is usually a waste of time. What retail needs desperately is innovation that is clearly focused on improving the customer experience, by empowering and supporting store associates and permitting customers to determine their own level of self-service.

The poor levels of customer experience across retail make this the most pressing need and opportunity for innovation.

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Mark Price, Managing Partner, M Squared Group, Inc.

I think it is and will always be delighting the customer! If it takes innovation to do that then, yes, innovation is key but innovation is far from the only key.

It's plain and simple, give the customer what they want, when they want, how they want. Make life easier, less messy, safer, more fun, the list goes on.

To do that means being nimble, open and interactive with the customer, willing to take risks, transparency and a corporate culture that supports all that. And that's my 2 cents!

Lee Kent, Brings Retail Executives Together to Meet.Learn.Profit, RetailConnections

Innovation in products isn't enough. The biggest area of innovation needed in growing a brand's value is in telling its story in a way that resonates with consumers.

'RetailRetell'

This report is similar to the most recent InterBrand report that I rely upon more. I believe consumer brand value sentiment is driven in large part by having the brand with you during everyday activities. The challenge retailers have is that once you leave the store or website or app, then you no longer have their brand message in front of you, unless we're talking private label. And, if we are talking private label, we are still moving more toward a product manufacturer more than a retail entity.

So, fair or unfair, retailers have somewhat of a disadvantage because we typically cannot "hold" their brand in our hands. P/L apparel retailers can have that advantage, though, fairly often.

What does it take to innovate in retail? Service. The last true differentiator. Simple, just not easy.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

If annual revenue is the sole determinant in the Brandz listing of "Most Valuable Global Brands," it's smart to notice that British Petroleum had revenues of $381.99 billion in their fiscal year ending March 31, '14 - more than twice Google's revenues. And, Russia's Gazprom had revenues of $153 - $175 billion for last year, depending on the report you believe. This would make them #1 and #3 on the Brandz list.

BP and Gazprom sell commodity petroleum products like oil and natural gas. Perhaps innovation is not the key to growing brand value.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Innovation is key to brand survival in the modern world. Just yesterday I was talking with a Director of Store Brands for a large healthcare retailer and we rattled off brands and retailers that have disappeared largely due to lack of innovation.

There is no middle ground anymore. Brands have to find ways to be Innovative and integrate current technologies, new marketing channels, forward thinking HR policies, and sustainable manufacturing practices.

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Karen S. Herman, Founder & Design Director, Gustie Creative LLC

Yes - it's about innovation, but more importantly about connection with consumers. It's about innovation making life better, easier, healthier, more fun, more interesting. Innovation is the answer, but understanding the connection to consumer lifestyle is fundamental to success.

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Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Yes, innovation wins. But innovation does not mean invention. Innovation means breaking convention. The tech companies in this list consistently take existing products and add new twists. Brand leaders, like people leaders, sell hope.

Google didn't invent search, but it made it more accurate with PageRank. Apple didn't invent cell phones, but it put UX first and allowed software to drive hardware. Microsoft didn't invent applications, but it bundled and integrated them in a way that pleased CIOs. Amazon didn't invent e-readers, but it added step-savers like Whispernet to make Kindle successful.

The most valuable brands are aspirational, whether Google or Marlboro. The tech names on this list are in the business of "better." Top tech brands don't sell hardware or software -- they sell hopeware.

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Dan Frechtling, Vice President, Global Product Management, hibu, PLC

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