Brandchannel.com runs an annual Readers' Choice Survey to determine what brands have had the most resonance with the public over the previous year. Unsurprisingly, search engine giant Google topped the 2003 global list, followed closely by Apple (NASDAQ:AAPL). Some of the other selections were extremely surprising.
Third on the global list, for example, was MINI, now a sub-brand of BMW, which has gained an enormous amount of notoriety over the last year in conjunction with the highly acclaimed re-launch of the Mini Cooper. Next came Coca-Cola (NYSE:KO). Surprisingly, Korean electronics manufacturer Samsung, which has invested millions into improving its brand value, rounds out the top five global brands. Qatari media company al-Jazeera placed 14th on this year's list, which tells me one thing: Even though this was not a scientific poll -- anyone could have voted, and there was no questionnaire involved -- people who did participate really seem to have put some thought into their choices. Other top brand vote-getters include Starbucks (NASDAQ:SBUX) and Krispy Kreme (NYSE:KKD).
Branding occasionally gets short shrift when people are valuing companies. A brand doesn't show up on a company's asset account, so money spent for branding purposes can seem to be wasteful -- indeed, much of it is. But when a company that provides a nearly un-differentiable product shows up as the No. 1 brand in 2003 for all of Latin America, that shows the power these investments can have.
That's exactly what happened with Mexican cement giant Cemex (NYSE:CX) -- a Stocks 2003 selection -- which garnered more than twice as many votes as the next Latin American brand, Corona. Can you imagine the average person walking down a sidewalk and saying, "Wow, you can really feel the difference with Cemex concrete?" Not really, but where Cemex has developed its niche is by generating a reputation for reliability and technological superiority in its markets. Construction companies have come to believe in Cemex' reliability, and this carefully groomed reputation has trickled into the public's consciousness.
Of course, looking at past results, at least one thing suggests to me that you can't assume that brand power is always a good thing: In 2002, already-disgraced-and-disbanded accounting firm Arthur Andersen made the list at No. 67.
Brands are among the most powerful, and yet fragile bases upon which companies can be built. Amazon.com (NASDAQ:AMZN) sits at No. 22, but for years people have been saying that its business model had no moat, that established booksellers could uproot it. Hasn't happened, and it's not like Amazon's competitors said, "Well, we don't want that money, anyway." The reason why Amazon rules the roost is its brand. It wouldn't take very much for the company to screw this up, though. A billing problem here, a series of inventory and shipping problems there, and you suddenly have a company that's burning the most valuable thing it has.
This survey, unscientific though it is, shows that no such internal or external threat has found purchase at Amazon yet.
Bill Mann owns shares of Cemex. He's a fan of the power of the brand.
