Coca-Cola, IBM still world's two most valuable brands

NEW YORK (AP) - Consumers lost trust in brands this year as the recession deepened, according to an industry report released last week, although longtime staples Coca-Cola and IBM retained their spots as the world’s two most valuable brands.

This is the first time the combined value of the world’s top 100 brands as ranked by Interbrand, a branding agency, has fallen in the 10 years Interbrand has assessed them.

The list’s total value, including brands like Google Inc., Nintendo and Sony, fell 4.6 percent to $1.15 trillion, Interbrand estimates.

“That says something about the environment that we’re in, especially when you consider that brands are by nature less volatile than business valuations,” said Interbrand CEO Jez Frampton, who called a company’s brand its most valuable asset.

The environment — a recession the likes of which the world hasn’t seen for decades — has eaten away at people’s trust in specific brands, starting with financial companies, he said.

Consumers even started to question retail brands as stores slashed prices to get sales, leading consumers to wonder about pricing, and why they had to pay so much before.

“All of these things lead you to re-evaluate the nature of the relationships that we have with brands and indeed how confident we feel in brands to live up to the promises they make,” he said. “Brands are promises which we value and are prepared to pay for and if we feel those promises have been broken we’re less likely to trust.”

Brands are more than just names, colors or logos — think Coca-Cola’s red or McDonald’s golden arches. A brand includes all the elements of a product or service from its design, ingredients and manufacture to its marketing, advertising and logo.

Each year, Interbrand ranks companies by the amount of their revenue that is attributable to their brands, using a formula that takes into account the brand’s future strength and its role in creating demand, whether among consumers or business customers or both.

The firm assigns a monetary value to each brand and measures annual growth, in this case from July 1, 2008, to June 30, 2009.

Given the recession, it was not surprising to see financial companies posting the steepest decline in their brands’ values this year, with drops by American Express (now number 22, down from 15) HSBC (now 32, down from 27), Citi (now 36, down from 19), and UBS (now 72, down from 41). Merrill Lynch and AIG both dropped off the list.

Automakers also dropped in the rankings as their sector’s sales slumped in the recession. In addition, major US automakers General Motors Corp. and Chrysler Group LLC received government aid to stay afloat, which generated negative feelings among consumers. Neither of those brands made the top 100 Interbrand list.