Australia’s most valuable brands revealed

Australia's most valuable brands revealed

“The brands that are effectively investing in their marketing are also seeing some of the biggest increases in strength – NRMA Insurance, Coles, Woolworths, Optus and even CBA, supported by their long-standing position in the marketplace,” Crowe says.

“With marketing budgets across the board under pressure, the smart brands are in fact looking to increase their investment to gain a greater share of voice and counter negative consumer perceptions towards (1) the economic outlook, (2) trust in business values and ethics.”

Financial institutions are being scrutinised closely and the spotlight will be closely on them as they try to rebuild their reputations.

— Mark Crowe, Brand Finance Australia managing director

The total value of Australia’s top 100 brands has fallen to $159 billion, down 5 per cent from last year. Of the top 100 from last year, only 26 companies experience an increase in their brand value grow; 62 companies’ value fell, while there were 12 new companies on the list.

Brand Finance’s analysis, which was done prior to the revelations in late October that at least 5700 Woolworths group staff had been underpaid, showed the supermarket giant’s brand value increased by 5 per cent to $11.8 billion.

“The thing, of course, for Woolworths in terms of what’s ahead is that this issue regarding underpayment of employee wages is one they’re going to have to manage very carefully over the ensuing 12 months to ensure that it doesn’t impact on the ground on their brand,” Crowe says.

However, Crowe says Woolworths has been working hard over the last three years to improve its brand in what is a really tough market for retail at the moment.

Woolworths Group chief marketing officer Andrew Hicks says Woolworths is a purpose-led brand and the company has been committed to that purpose.

“We believe that it’s more about what we do than what we say,” Hicks says in a statement.

“In the last 12 months we have continued our focus on meeting the changing needs of our customers while also engaging the community in a variety of meaningful ways. This engagement has been delivered via ongoing improvements to the in-store and online customer experience and via the delivery of key programs such as Earn and Learn and Discovery Garden.”

Brand Finance calculates valuations based on a number of metrics to determine how much of a company’s profits are attributable to the brand. These included enterprise value, branded business value, brand contribution, and brand value combined with brand strength, which is calculated on marketing investment, stakeholder equity and business performance.

Banks plummet

While Australia’s big four banks remained in the top 10 most valuable brands, ANZ, National Australia Bank and Westpac all saw their brand values plummet more than 20 per cent. Brand Finance valued ANZ’s brand at $6.8 billion, NAB’s at $6.9 billion and Westpac’s at $5.7 billion.

“Financial institutions are being scrutinised closely and with the country’s banks feeling the heat following the royal commission, the spotlight will be closely on them as they try to rebuild and repair their damaged reputations,” Crowe says.

“Australia’s banks all face the same brand challenge in the coming year – to restore trust, customer retention and satisfaction, and ultimately to rebuild their brand value. In many respects banks will more than ever be relying on a brand lead recovery, to position themselves for future growth.

Commonwealth Bank of Australia’s brand value fell just 3 per cent to $10.2 billion, putting the bank at third spot in the brand rankings for the second consecutive year.

Crowe says CBA’s ability to hold up its brand value was due to a recovery in brand strength.

Brand strength is based on marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation. CBA’s brand strength has suffered in recent years following the banking royal commissionand an AUSTRAC money laundering scandal in 2017.

Strong position

In the brand strength rankings, Optus rocketed into No. 1 position, its best result in the past decade. The telco took the title from Qantas, which slipped to 6th,

“What we’re seeing in the telco sector is obviously a lot of pressure on revenues as they’re experiencing a lot of competition from challenger brands, new players, OTT (over-the-top) players,” Crowe says.

“So there’s a lot of pressure on that industry and it’s really where brand needs to come to the fore.”

Optus thinks less about Telstra and more about consumers, head of consumer marketing Mel Hopkins says. 

The second-strongest brand was a new entrant to the category, Rexona antiperspirant, while retailer Harvey Norman slipped one spot to third despite an increase in brand strength. CBA returned to the top five in fourth position, while another new entrant, Milo, rounded out the top five.

Optus head of consumer marketing Mel Hopkins said the telco has had ambitious goals to improve its brand over the past 18 months.

“If you’re inside our offices, we have a thing called the Brand Bunker where we meet as a team, we have stuff on the wall there that our ambition is to become Australia’s No. 1 brand,” Hopkins says. “That was put up there 18 months ago.”

Hopkins says Optus worked on its branding to focus on its strengths and what gaps there were in the market rather, than simply focusing on competing with Telstra or Vodafone.

“That really created a different kind of voice. We spent a huge amount of time talking to consumers, understanding their needs and wants,” Hopkins says.

“For us, the biggest learning that we received from them was they want an alternative to Telstra, they want a different type of telco and that’s very much set up how we’ve approached the brand.”

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