Microsoft kicks Apple's butt(?!) in big brand study

Consulting firm Interbrand today released its annual rankings of the best corporate brands (the 'Brandys'?). I'd never heard of it, but my interest was piqued as I was just coming off another Microsoft-Seinfeld-'I'm a PC' marketing story.

Coca-Cola kept the top spot, while IBM pushed ahead of Microsoft for the first change to the top four since at least 2001. GE held onto fourth.

Tech and telecom companies are well represented in the top of the U.S.-centric 100-strong list. Nokia is fifth, Intel seventh, Google tenth, HP 12th, Cisco 17th, Samsung 21st, and Oracle 23rd.

Shockingly, Apple is only 24th, followed by Sony at 25th. Further down, SAP is 31st, Dell 32nd, Canon 36th, eBay 46th, Amazon.com 58th, Xerox 59th, Yahoo 65th and Motorola 87th.

If I was going to measure the strength of a corporate brand, I would send people to cocktail parties and see what kinds of murmers of approval they elicit depending on what company they say they work for.

Interbrand has a far more detailed methodology that it has refined over the past two decades. It is certainly rigorous, though I don't know how relevant it is to the common-sense definition of brand. Interbrand takes revenue forecasts directly attributable to branded products, subtracts operating costs, and then applies a charge for the amount of capital used. Then it uses un-described "industry benchmark analysis" to measure how much impact the brand value has on a potential purchase. It eventually comes up with a brand value that is in the tens of billions of dollars and which I would mistake for a firm's market capitalization if it weren't pointed out to me.

I would guess the study is studied seriously by mutual fund managers and others who make long-term investments based heavily on theory and technical charts, rather than detailed analysis of what a company does/makes. For anyone else, the study will seem obviously flawed.

For starters, how could Apple be ranked so low? It seems obvious to me that Apple's immense growth the past several years is due heavily to its brand, for which I use the common-sense definition: how many people have heard of this company, and how much they like it.

By that definition, is Cisco really twice the brand of Apple, or SAP twice Amazon.com? And why the heck isn't golden boy Google in the top five?

Actually, considering Interbrand's methodology, I'm surprised Google is even ranked. Google's brand doesn't influence whether customers look at the ads it serves up, nor does it determine whether an online advertiser will "choose" Google, since so much Web ad inventory is served up automatically via complicated software algorithms. And all of the things that Google actually could sell, such as subscriptions to Gmail or Google Docs, it mostly gives away for free.

Interbrand has other strange rules. It excludes WalMart because it operates under that name mostly in the United States. And it says the companies need to be public -- which excluded popular candymaker Mars (think Snickers, M&Ms, Uncle Ben's rice). And it says companies must sell some products to consumers. Well, I don't know about you, but I've never seen an Oracle database stocked at my local Kohl's. Ditto with SAP ERP.

Ultimately, the Interbrand study seems misguided. Is brand something you can really claim to measure?

It reminds me of the U.S. News World & Report's annual ranking of best colleges: the same usual suspects changing hands at the top; puzzling rankings below that (Washington University in St. Louis a better school than Ivy Leaguer Brown University?); all caused by an over-complicated methodology. When in fact the best school for you or your child depends mostly on...you or your child.

---------

What do you think of studies like the Interbrand one?