Editorial: Brand value league proves PR's worth

Since PRWeek last hit the streets, the annual league table of the world's biggest brands has been published by Interbrand/Business Week.

Although a little limited, in that (for various reasons) it does not include brands such as Mars, Wal-Mart and British Airways, the list is always a fascinating insight into the health of the products and companies that mould our lifestyles (see www.prweek.com for full table).

It is significant that Google leaps into the table at number 38, above 100-year-old stalwarts such as Kellogg's and Heinz. It is equally telling that 'fast fashion' retailer Zara is now deemed to be worth more than established fashion brands Levi's, Prada and Armani. As our analysis this week reveals (page 14), Interbrand's calculation of brand value is based largely on financial data and projected earnings from analysts. Critically, however, these projections - and another assessment called 'brand strength' - are often based on consumer perception and corporate reputation.

GE, one of the world's biggest companies, has managed to grow its brand value by seven per cent, by positioning itself as a centre of cutting-edge innovation and earth-friendly products. McDonald's has reversed its fortunes not only by introducing new menus, but by cementing - in Business Week's words - 'a hipper image'. Meanwhile the 'very public turmoil' among senior management at Morgan Stanley helped wipe 15 per cent off its brand value.

All this shows the powerful effect of reputation. Both GE and McDonald's have used huge corporate advertising and PR campaigns to improve their images, while Morgan Stanley was in dire need of some serious crisis management at the top of its organisation. Interestingly, Google spent only $5m on marketing in 2004, a fraction of the amounts spent by competitors. It built its brand value through word of mouth and, ultimately, a well-handled flotation.

All of which is grist to the mill of those communicators still striving to prove their value to the board.

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