Valuable, strong and trustworthy brands 2019
Qantas has been named Australia’s strongest brand and, for the fourth year in a row, Telstra has been deemed Australia’s most valuable brand, both by independent brand valuation consultancy Brand Finance. But what is the real value of a brand, and how does a business build that value?
According to Brand Finance, Telstra’s result comes after a year of high quality and reliable operations. Performance is a key factor in the creation of brand value, and so is competition.
The greater the competition, the lower the brand value. The brand that remains at the top of the tree in terms of quality of delivery of product or service will always boast greater brand value.
Australia’s most valuable brands
|Brand name||Value ($AUS)|
|4||Commonwealth Bank||$10,558 million|
|10||Rio Tinto||$4,650 million|
Importantly, trust is another key factor. And where trust once came as a result of a business’ size – the larger the organisation, the greater the levels of trust – that is no longer the case. For a glowing example of a loss of trust, look no further than Australia’s all-powerful banks.
In 2018, during the Financial Services Royal Commission, banks and other finance companies struggled to convince the public that the trust and brand value they had built up over decades still existed. Their brand values either remained relatively static, or dropped.
“Australian banks’ brand value and brand strength have suffered in the aftermath of the Financial Services Royal Commission,” said Mark Crowe, Managing Director of Brand Finance Australia.
“While the banks’ underlying financial performance is sound, the adverse impact on brand equity will require significant brand investment to mitigate against erosion of brand revenues over the next 12 to 18 months.”
Australian bank brand value
|Brand name||Value growth|
The value of Colonial First State, the worst hit of all of the Australian finance brands, fell a massive 28% after revelations of dishonest dealings in the industry. This is at a time that brands such as BHP, Woolworths and Coles have experienced brand value rises of over 23%.
The banking industry, in fact, has been hit by a double whammy of reputational damage via the Royal Commission and increased competition from the fintech industry. Technology and trust, it seems, are two vital ingredients in the recipe for brand value.
If the banks have fallen out of trust, which sectors are still held in good esteem by the public? Here are the top five reputation scores as revealed in the report.
Banks languish at number 9, with a reputation rating of just 5.5/10.
It also transpires that brand performance can outstrip enterprise value. During a year in which Qantas’s enterprise value has dropped by 8%, it became the nation’s strongest brand. Last year’s strongest brand was Commonwealth Bank which, after the Royal Commission, has now fallen to the seventh position.
Which are the top ten strongest brands in Australia? Here’s what Brand Finance tells us.
|Brand name||Performance score|
While it’s more difficult to measure than the bottom line, brand value has a powerful influence over an organisation’s final results.
“What is the purpose of a strong brand: to attract customers, to build loyalty, to motivate staff?” Crowe said. “All true, but for a commercial brand at least, the first answer must always be ‘to make money’.”
About the author
Chris Sheedy is one of Australia’s busiest and most successful freelance writers. He has been published regularly in the Sydney Morning Herald, Virgin Australia Voyeur, The Australian Magazine, GQ, In The Black, Cadillac, Management Today, Men’s Fitness and countless other big-brand publications. He is frequently commissioned to carry out copywriting and corporate writing projects for organisations, including banks, universities, television networks, restaurant chains and major charities, through his business The Hard Word.