RBC and TD Bank are Canada’s most valuable brands, followed by Bell, according to the first BrandZ study from WPP and Kantar.
The ranking of the top 40 brands in Canada combines financial analysis with consumer research to determine the value that the brand brings to the business. WPP and Kantar concluded that the RBC brand is worth US$23 billion, TD is worth US$20.1 billion and Bell, well back in third, is worth US$13.3 billion.
According to Kantar/WPP, the value of a brand stems from its ability to appeal to customers and potential customers. The BrandZ ranking measures that appeal. More subjectively, WPP/Kantar say brands that are most valuable are:
- Meaningful: they appeal more, generate greater “love” and meet individual expectations and needs.
- Different: they are unique in a positive way and “set the trends.”
- Salient: They come spontaneously to mind as the brand of choice for key needs.
Speaking at the BrandZ launch event in Toronto Wednesday, Paul Gareau, senior vice-president, brand and creative team leader for Kantar Canada, said that the results did suggest some potential red flags for Canadian brands, which tend to under-perform against their international peers in both being meaningful and different.
Gareau said that salience is the key driver of brand value in Canada. “We have very well known brands in Canada, but they aren’t as meaningful and different as they could be,” he told the audience that included many senior marketers from some of Canada’s top brands. “This creates a big risk because it’s basically saying that ‘People are buying us because they know us, not because we’re offering something super meaningful or differentiated from the competition.”
Half of the top 10 are Canadian banks, with Scotiabank in fourth spot ($9.4 billion), Bank of Montreal in seventh ($6.8 billion) and CIBC in 10th ($4.9 billion).
Canadians have a more positive opinion of banks brands than consumers in other markets, which Kantar/WPP attributes to strong regulation and the fact that no bank needed to be bailed out during the last financial crisis. Of the Top 40 brands assessed by Kantar/WPP, banks accounted for 46% of the total $143.6 billion value.
The nearly $144 billion valuation of the companies on the top 40 list would make those brands the 56th largest country in the world by GDP, nestled between Kazakhstan and Hungary, said Gareau.
Telecom also had a strong showing on the list, with Rogers ($6.4 billion) and Telus ($5.9 billion) both making the top 10 in eight and ninth place respectively. Lululemon in fifth ($7.6 billion) and Tim Hortons in sixth ($68 billion) rounded out the top 10.
Telecom, which accounts for 22% of total value of the Top 40, is strong but has room to grow, said Kantar/WPP. “Potentially due to the high cost that Canadian consumers pay for their services in contrast to other markets, Canadians have a less positive view of brands in this sector.”
Consumers say their telecom providers are untrustworthy with a trust index score of 93 where 100 is average; have poor advertising, a score of 98 and have lower perceived purpose, score of 97 than telecom brands in other markets.
Overall, Canadian brands aren’t considered particularly innovative compared to other markets, and are underexposed in international markets.
“If we want to build bigger brands, then there is work to do,” said Scott Megginson, president of Kantar Canada. “Canadian businesses can be much bolder about exporting, given the huge scale of the U.S. market next door and the highly positive perceptions of Canada internationally.
“Creating brands with a strong identity and a meaningful difference from other players in the market is an important foundation for Canadian businesses that want to be a success outside the country, proven by internationally successful brands like Canada Goose and Lululemon.”
In the global list released in June, Amazon was the most valuable brand at $315.5 billion, Apple was second at $309.5 billion and Google third at $309.0 billion.
TD and RBC were the only Canadian brands to rank among the top 100 brands globally. During Wednesday’s event, Doreen Wang, global head of BrandZ, urged marketers and agencies in attendance to push to have five Canadian brands on the global rankings within five years.
Wang noted that brand value accounts for approximately 41% of a company’s total value, compared to just 9% for bank value and 51% from other intangibles. “Brand building is not cost,” said Wang. “It is the most important investment any company should make to ensure long-term and sustainable financial success.”
