Inside Howtheficklebecomefaithful Anarmyofonline

1 Snakes and laddersTrends and full rankingof the world s top 100brands according toBrandZPage 3FT SPECIAL REPORTG lobal | @ftreportsWednesdayJune 8 2016 InsideSocial mediaAn army of onlineinfluencers canspread brandmessagesbetterthanone bigcelebrityPage 2 CounterfeitsAlibaba should turn apiracy crisis into anopportunityPage 2 When immersion suitsThe world of virtualreality gaming isattracting mainstreamadvertising campaignsPage 2 Acommon complaint fromsome of the world s biggestbrands these days is thatthey cannot convince con-sumers especiallyyounger ones to stay loyal. Time wasthat once hooked, a consumer wouldkeep buying the same familiar longer. Millennials in particularwant to try different things, makingthem frustratingly brand-fickle s100biggestbrandsstillcommand a significant premium overothers and that value increased by 3 percent to $ this year, according to thelatest BrandZ rankings compiled byMillwardBrown, ,thevalueofthetop 100 brands has more than doubled increasing by 133 per cent.

2 That value(see box on page 3 for methodology) iscalculated in terms of financial meas-ures such as revenues and profitabilitycombined with surveys of how has changed over the decade,however, is the relative fortunes of whenBrandZissueditsfirstrankings the top five were leaders intheir respective fields. Each came froma different sector Microsoft (technol-ogy) headed the list, followed by GE(industrial conglomerate), Coca-Cola(soft drinks), China Mobile (telecoms)andMarlboro(tobacco).As the power of digital communica-tion has grown, technology companieshave displaced other sectors at the topof the listing. This year, four of the topfive most valuable brands are technol-ogy companies: Google, with a brandvalue of $229bn, Apple ($228bn),Microsoft ($122bn) and Facebook($103bn). AT&T, valued at $107bn andrankedfourth, Cheung, head of BrandZvaluation at Millward Brown, says: The top 10 used to be dominatedby consumer goods.

3 This year, it s tech-nology. She says that as consumers havebecome less brand loyal, so companiesare having to change their marketingstrategies through greater use ofdigital methods, which has enhancedthe value of these technology brands. Those born in the digital age can accessinformation easily to shift to whateverbrand they find interesting. So compa-nies are trying to engage consumersthrough the use of digital means,throughsocialmedia, the fickle become faithfulThe shifting digitallandscape can befrustrating, writesScheherazade DaneshkhuSource: Millward Brown (including data from BrandZ, Kantar Retail, LinkedIn and Bloomberg) Photos: DreamstimeHow today s top brands made the rank2006 Globalbrandsrank20161100 AmazonFacebookGoogleAppleNew tech companiesnow dominatethe top ten .. while financialservices companieshad mixed fortunes.

4 And an increasingnumber of Chinese brandsmake the top 100 BaiduCoca-Cola,forthefirsttime,hasfallen out of the BrandZ top 10 and is nowranked 13. The 4 per cent drop in itsbrand value, compared with 2015,reflects the backlash against sugary softdrinks from health officials over , Coca-Cola s brand valuehasalmostdoubledoverthepastdecade from $41bn in 2006 to $80bn in 2016,reflecting primarily the growth in thecompany , that value is a fraction oftoday s leader Google s $229bn. In2006, when Coca-Cola was rankedthird, its brand value was two-thirds ofthat of Microsoft, then the world s mostvaluablebrand,witha$ pattern, including Marlboro,McDonald s and Louis Vuitton in lux-ury, which have all fallen down therankings over the past decade but stillcommand a substantially higher Claydon, partner and UK head ofconsumermarketsatKPMG,theprofes-sional services firm which recentlyreleased a study of companies deliver-ing the highest organic growth rates,says that agility, innovation and stayingclose to consumers are key to outper-formance.

5 You can get superior brand growthalmost regardless of size and category,solongasyoudonotrestonyourlaure lsbut are clear about your strategy andexecuteagainstit, fact, 54 of the brands in the BrandZTop 100 of a decade ago are still intoday s list, but 46 have been replacedbynewentrants. This shows how a strong brand cansustainitsvalueovertime,butalsoillus- trates the potential .. for new brandsto shake up the status quo, to do when asports scandal strikesLessons for companiesfrom Maria Sharapovaand FifaPage 4 JUNE 8 2016 Section:ReportsTime:3/6/2016-18:08 User:kavanaghmPage Name:GBD1,Part,Page,Edition:GBA,1,12 financial TIMESW ednesday8 June 2016 Global BrandsAt a YouTube event lastmonth, Lilly Singh, a 27-year old comedian who hasrisen to fame through heronline videos, quipped thatshe had great hair, adding: By the way,shout out to Pantene.

6 Ms Singh who is a brand ambassa-dor for Coca-Cola was making a jokeat an event designed to showcaseYouTube s talent in the hope of luringadvertisers joke illustrates the role socialmedia influencers have taken on forbrands, as companies look to promoteproducts through the support of inter-net personalities, many of whom havemillions of influencer marketing hasgrown in popularity as companies try toreach the masses, in the face of thedecline in television viewing, by har-nessing a rise in social media consump-tion. It has become a lucrative Song, whose Instagram pagedraws followers, was reported lastmonth to be paid $500,000 by LauraMercier, a beauty brand, to be its digitalinfluencer .Barbara Soltysinska, founder of inda-Hash, a business which aims to brokerdeals between brands and influencers,says the technique s appeal has grown aspeople have become less sensitive to tra-ditional advertising.

7 We are back to thetime that people were recommending too t h e r s w h a t t o d o a n d w h a t t ouse .. they don t want to be sur-rounded by so many ads. More than 80 per cent of respondentsto a 2013 Nielsen survey said theytrusted endorsements from people theyknow, compared with about 60 per centfor television ads and less than 50 percent for ads on social networks. This generation doesn t dislike brands, saidErin McPherson, former chief contentofficer of Maker Studios, the digitalvideo network, at a conference last year. What they don t like is advertising. Yet insufficient transparency over theendorsement of influencers is threaten-ing the credibility of this new marketingchannel among consumers. In the US,the Federal Trade Commission updatedits guidance last December in responseto the rising popularity of influenceradvertising.

8 Influencers must make clear and conspicuous disclosures intheir posts if they are paid for talkingabout a product, the FTC says. Thewatchdog cracked down on this recentlyby rebuking Lord & Taylor, the retailer,for paying influencers to post promo-tional photos on Instagram without dis-closing the UK, the Advertising StandardsAuthority, too, says brands must dis-close paid content under consumer pro-tection laws. In 2014, the body banned aseries of YouTube videos for not makingit clear that they were advertising forOreo brands are still working out thekinks in rules surrounding the use ofinfluencers, some concede measuringsuccess in the field can be difficult. It s tricky to figure out the potentialreach of something I m doing with aninfluencer, says Noah Mallin, socialpractice lead at MEC, a media buyingcompany owned by WPP.

9 Just becausesomebody is following the influencer,doesn t mean they re going to see thepost they make. Sometimes brands will place specialcode into online content for influencersto post, so that any purchases by follow-ers can be traced, says Mr Mallin. MsSoltysinska argues that a campaign ssuccess can be judged on the metric of engagement rate , which is the per-centage of people who liked, shared,clicked or commented on a has become contentious, as therise in the relevance of influencers hasprompted them to demand moremoney for the debate over the value and pres-entation of advertising-backed contentcontinues, there has been a shifttowards using smaller and medium-sized influencers, and away from somebrands initial focus on endorsementsby celebrities or big stars. It s muchbetter to have a hundred influencerswith 1,000 followers each, than oneinfluencer with 100,000 followers, saysMs Soltysinska.

10 Together they aremuch bigger than the biggest stars andoften they re more credible. Influencers who are not generallyfamous can sometimes be more effec-tive because they often appeal to a spe-cific niche, says Mr Mallin. Car enthusi-asts, people who like to cook athome .. all those niches can be servedreally well by influencers who might bein the 20,000 follower range. How to winfriends onlineand influencepeopleSocial mediaA hundred endorserswith 1,000 followerseach can convey amessage better thanone big celebrity,saysAnna NicolaouComic influence:Lilly Singhon stage inNew York in MayTaylor Hill/FilmMagic Thisgenerationdoesn theydon t like isadvertising A collision last month betweenmembers of the International Anti-Counterfeit Coalition (IACC) andecommerce giant, Alibaba, is a tale ofhigh emotions, larger-than-lifecharacters and festering animositybetween brand owners and the world slargest online platform.