by: Alain Thys
Not so long ago, David Armano suggested that someone forgot to send me the memo that Social Media weren't what I made them out to be. But when I look at the Futurelab 100 which we're publishing today, I think I've completely lost my in-tray. The first time I looked at it, I thought ... OK, interesting. But when Stefan came up with one extra piece of information, I was simply blown away.
If you haven't picked up on it yet, I should perhaps start by saying that we have a habit at Futurelab to "mash-up" Interbrand's listing of the world's 100 most important brands, each time it gets published. Rather than on their value, we focus on the " online relevance" of the brands, for which we consider things like: the number of times the brand pops up in Google, how high it peaks on Blogpulse, whether people "love" the brand in the comments they make, or whether they simply say "it sucks".
So, when IB's new list hit the web, Stefan and Alex went to work and produced the latest version which you can find summarized here. And while our exploits are not exact science, like last time we found very little correlation between the way a brand performs at Interbrand and its relevance online (any suggestions are very welcome!).
In its own right, this is already interesting food for debate. After all, if there is no relationship, does that mean that online relevance adds no or only indirect value to a brand (and is the Futurelab 100 an exercise in futility)? Or is something missing from Interbrand's perspective of what adds value? Are things like word-of-mouth irrelevant? Is Reichheld's NPS really just much ado about nothing?
But then, Stefan made a joke which turned our Futurelab 100 experience up-side-down. Mainly in jest he suggested to include Futurelab as a brand in our calculations. This so we could calculate how many centuries it would take us to hit the top 100. As the Pinot Grigio was good, we gave it a whirl and then simply sat in stunned silence when we looked at the results. While appearing in the "lower 90s", Futurelab as a brand was of equal relevance than some of the world's 100 most valuable brands. After the giddiness waned, the gravity of what we just uncovered hit us. Big time.
If a puny, insignificant and low-budget brand like Futurelab, with virtually no marketing resources can outrun brands like Danone, Duracell, Moët & Chandon, something is seriously wrong in the land of digital marketing.
OK, granted, we claim to have a better than average understanding of what it takes to "make" a brand online, but the fact of us actually making it to the hitparade imho says more about the "bottom 50" brands than it says about us. We simply don't belong.
We haven't yet looked into the why's, though I have a point of view. But we'd also like to call on the thinkers in the blogosphere. Ilya, David, Jackie, Karl, Ann, Joseph, John, and anyone else who has an opinion ... what are your thoughts on this?
Why do some major brands continue to place comparatively low prominence on the internet, disregarding millions of consumer's actual behaviour of spending large amounts of time surfing, chatting, communicating, and "being" online.
I just don't get it.
Hi Jan, on that, our bank account certainly agrees :-)
The high score of FL is very simple. When you're of very very high interest for a few 1000 hyperactive professionals on the web (like FL), chances are your total online-score is higher than the one of a low interest brand even when millions of users buy it everyday. You count the TALKING. They count the BUYING.
Ni hao Jan and Hej Mats!
Thanks for the comments !
Agree on all points from both your comments.
Jan, we also suspect that there is a time-lag effect. We haven't found it yet, but intuitively it should exist (perhaps I'll give interbrand a ring to see if they want to pool data). Either way, I'd be interested to see how Yahoo performs on IB in 2 years or so.
Also I agree with the idea of "thought leaders vs. market leaders" (Mats, BTW thanks for the kind words on FL :-)
However, the thing that keeps baffling me is that - comparatives aside - what are considered major brands score so poorly on relevance in "absolute terms" (i.e. if we can already outrun them ??).
But then again, maybe my standards are too high :-)
I think the difference lies between market share and mindshare. The Interbrand list covers big brands that generate high global revenues, and whose brand equity mean that they can generate a price premium vs their competitors. They are trusted and valued brands in their respective categories, but it does not automatically mean that I would approach them (or trust them) in unrelated matters.
On the other hand, a brand like Futurelab is a thought center, with intelligent and trusted opinions and ideas on a range of subjects that I value. This is very much akin to the ideas in Adam Morgan's "Eating the big fish" some years ago - there are market leaders and thought leaders. The difference is that thoughts spread easier and faster, especially on-line, than financial revenues, and hence the strongest on-line brands need not necessarily have vast revenues, but can (and do) have vast influence.
When you take into account all online data like Futurebrand does, you mainly measure the present state and the future. The more your brand is mentioned right now the higher your awareness and the more it can grow. But awareness is only half of the story. What counts is the amount of people who are talking about you positively (Reichhelds recommendation factor). The higher that score, the higher the chances your marketshare (and future earnings) will grow. Will grow. In the future! Ideally you should add the FL figures of 2002-2007 and some Reichheld figures of the past to the Interbrand list and see what happens then.
Take Yahoo as an example. Yahoo is talked about a lot these last several months – hence place 2 in your FL-list. But in the IB list they only rank 55th. They indeed performed – financially- worse than Google in the given period. And that period seems to be the last 5 years if I understand IB well. And these financials are the starting point of IB. The published financials of the last 5 years BEFORE their annual IB - report. They use “reports from analysts at JPMorgan Chase (JPM ), Citigroup (C ), and Morgan Stanley (MS )” to do that. Their basis is the past.
Then they calculate “how much of those earnings result from the power of the brand itself”. That’s again a financial operation. They “strip out operating costs, taxes, and charges for the capital employed to arrive at the earnings attributable to intangible assets”.
Got the picture? The past is not the future. Awareness are not earnings yet.