Tech Dominates Top 100 Brands: What It Means for the Channel
The 2017 BrandZ 100 Most Valuable Brands report is out, and it paints a vivid picture of the rapid and drastic disruption digitization is causing in the marketplace.
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We’ve been hearing the mantra that “all companies are tech companies” in today’s marketplace for at least the last year, as Amazon—technically classified as an ecommerce brand—has become a B2B tech powerhouse with AWS, and the most successful brands are differentiating themselves through IoT-centric technology and cutting-edge innovations. Consider the food industry, for example. Domino’s Pizza rose 29 percent in value on top of the 30 percent increase it had a year ago. A leader in digital innovation, Domino’s this year introduced an app for ordering, which improved customer experience and made order and delivery more efficient. McDonald’s, sitting at the number 9 spot, is a leader in technology like self-serve kiosks to replace cashiers at the registers.
Channel takeaway: With some creative thinking, every vertical becomes a potential new market.
Apple and Google remained the No. 1 and 2 brands in the Global Top 100, each valued at almost $250 billion. Combined, they carry a valuation that’s about equal to the GDP of Sweden. The versatility of the Surface tablet and expansion of its cloud business put Microsoft—a longtime frontrunner—at number 3. Amazon, which changed the way the world looks at retail, is working hard to disrupt other sectors, mainly in third-platform tech like cloud and IoT. The company rose 41 percent to $139 billion, netting it the number 4 spot. Facebook is sitting pretty in the number 5 spot despite recent negative publicity, having ended last year with over 1.8 billion monthly active users (MAUs), and staying focused on its three priorities: monetizing video, adding advertisers, and making ads more relevant.
Channel takeaway: When it comes to business technology, longtime giants like IBM and Intel have been pushed aside for companies with a focus on cloud technology.
The presence of technology brands extends far beyond the top five slots. Thirty-seven tech brands made up 54 percent of the Top 100 value, up from 37 percent ten years ago. Overall, tech companies in the Global Top 100 increased 16 percent year-on-year, compared with a 4 percent increase for other brands. All seven “Newcomer” brands this year are tech-related: YouTube, HPE, Salesforce, Netflix, Snapchat, and telecom providers Xfinity and Sprint. Comcast subsidiary Xfinity, the highest-value Newcomer, entered the Top 100 at number 23. The company provides TV, internet and telephone service, and is about to introduce mobile. YouTube’s original content business contributed to its success, as well as the revenue it gets from advertising. HPE’s focus on servers, storage, networking and consultation enabled it to better confront the disruptive changes in information technology. And Salesforce appears on the list due in large part to its challenge of some of the legacy business technology companies.
Channel takeaway: With the clear dominance of tech, partners have a bright and sunny future. It may take some creative thinking and adoption of disruptive tech, but it’s clear that success is easily within grasp for IT firms.
Telcos are undergoing a steady transformation as brands attempt to escape their commodity roles as voice and data providers and become consumer-facing content and entertainment brands. This year saw major brands taking major steps to advance this goal and to position themselves for leadership in the Internet of Things. Verizon acquired Yahoo!, having purchased AOL two years ago, and AT&T agreed to buy media giant Time Warner, following its earlier acquisition of DirecTV. And just as every company is a tech company, every company also has mobility as part of their growth strategy.
Channel takeaway: As more and more users turn to their mobile devices for tasks that used to be performed on desktop or laptop computers, telcos will continue to grow more powerful.
Brexit. Russia. Trump. Wikileaks. Because of its vital role as data custodian and its centrality in connectivity and digital communications, the tech sector was at the center of the geopolitical battles this year, but that didn’t stop its forward momentum. Social media brands like YouTube and Facebook faced intense scrutiny and criticism in the debates about free speech and what constitutes a media company today, and Google was the subject of much complaining due to the algorithms that placed some ads next to controversial and objectionable material. Despite the criticisms, these companies left most of the 100 in the dust.
Channel takeaway: Tech is the subject of a lot of heated debate, especially when it comes to privacy and content regulation, so tread carefully. Still, it’s a necessary evil, and people will put up with a lot for the convenience it offers.
The study posed a serious question about the role of technology in the lives of consumers moving forward: What will consumers expect in a future where technology disintermediates them from brands— where consumers choose a detergent brand once, and then depend on technology to keep the laundry room stocked? In that future, the authors argue, the consumer’s primary relationship will be not with the detergent brand, but rather with the e-commerce and logistics provider. The entire nature of marketing and business development changes in that world. The exact nature of this new paradigm will depend on how third-platform tech evolves, but what will set the most successful brands apart is its service levels. In the quickly disappearing production-driven economy, the cost of entry for brands was a superior product. In the knowledge economy, it’s customer experience.
Channel takeaway: If you’ve made the move from break-fix to services, you’re on the right track. If you haven’t, you may be in trouble.
The study posed a serious question about the role of technology in the lives of consumers moving forward: What will consumers expect in a future where technology disintermediates them from brands— where consumers choose a detergent brand once, and then depend on technology to keep the laundry room stocked? In that future, the authors argue, the consumer’s primary relationship will be not with the detergent brand, but rather with the e-commerce and logistics provider. The entire nature of marketing and business development changes in that world. The exact nature of this new paradigm will depend on how third-platform tech evolves, but what will set the most successful brands apart is its service levels. In the quickly disappearing production-driven economy, the cost of entry for brands was a superior product. In the knowledge economy, it’s customer experience.
Channel takeaway: If you’ve made the move from break-fix to services, you’re on the right track. If you haven’t, you may be in trouble.
The 2017 BrandZ 100 Most Valuable Brands report is out, and it paints a vivid picture of the rapid and drastic disruption digitization is causing in the marketplace. The report, authored by WPP and Kantar Millward Brown, is the largest global brand equity study. Now in its twelfth year, the study combines measures of brand equity, based on interviews with over three million consumers about more than 100,000 global brands in over 50 markets, with analysis of the financial performance of each company to determine the brand's overall value.
The brands that appear in this report are the most valuable in the world. Unsurprisingly, technology dominates the rankings. Click through to see the top 6 takeaways for the channel.
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