The Times They Are A-Changin’
The Numbers Behind the New York Times’ digital transition
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
For the most part, legacy print media stalwarts are dying a death by a thousand cuts.
There are exceptions to this rule, and The New York Times is often touted as the best example of an old-school media company that is successfully navigating the challenging transition to digital. They’ve experimented with different types of content and tactics to get eyeballs, while also shifting their company-wide strategy and culture to take a digital-first approach.
While pundits give credit to the Times for their latest efforts, this doesn’t mean it’s been an easy transition for the iconic newspaper. The path forward has been littered with roadbumps, and the most recent one is hard to ignore for shareholders.
Earlier this week, The New York Times announced a 95.7% decrease in quarterly profit. We dug a little deeper in this week’s chart to provide some context behind the newspaper’s challenges in maintaining its relevance in the 21st century.
Goodbye, Ad Dollars
The primary challenge faced by the Times is pretty obvious.
In the early 2000s, the company easily made over $2 billion in advertising revenue per year. Today, they make about $600 million from ads.
Why has the transition to digital hurt ad revenues so much? There are a bunch of reasons, but here’s a few of them:
- Physical circulation of The New York Times and other newspapers is dropping rapidly.
- Traditional display ads aren’t particularly effective, and are part of the “old-school” of digital thought.
- Programmatic bidding drives down prices for these ads, bringing in even less revenue.
- Digital lends itself to long-term, results-driven campaigns. It takes time to set these up and measure them properly, especially at scale.
- Ads need to match the editorial stream to be effective. Quality over quantity.
- There’s more competition in the digital space, which is a stark contrast to the distribution oligopolies enjoyed by big newspapers in the legacy era.
- Madison Avenue is also slow at switching to digital, which only adds to the lag time.
These are just some of the reasons why advertising was able to make up 65% of the Times’ revenues in 2004, but only 39% in 2016.
Hello, Digital Subscriptions
While I don’t personally agree that a paywall is a long-term answer to any of their problems, it is true that the New York Times has used this as a temporary crutch to at least counter lost ad dollars.
In Q3 2016, revenue from digital-only subscriptions increased 16.4%, and money coming in from subscriptions has increased year-on-year since 2011.
Sometime between 2011 and 2012, subscription revenue (powered by digital-only subscriptions) passed ad revenues as the most important source of incoming cash for the company. The ramp-up has been impressive, and The New York Times now has 1.6 million digital subscribers.
My personal take? Digital subscriptions will plateau in the next five years or maybe sooner. Further, I think that content that isn’t industry or niche-specific will generally drift towards being free for users over time. The New York Times will have to solve their ad problem, but the paywall will buy them a bit of time to do so.
Ranked: The Most Valuable Brands in the World
This infographic ranks some of the world’s biggest companies by brand value in 2020 and visualizes the movers and shakers over the past year.
Ranking The World’s Most Valuable Brands
Due to its intangible nature, the power of a brand can be difficult to translate to a balance sheet. That said, a brand that truly connects with consumers and stands the test of time can deliver immense financial value.
Today’s graphic pulls data from the 2020 edition of Brand Finance’s annual Global 500 report, which ranks the world’s top brands by value using a multi-dimensional formula.
By quantifying the true value of a brand, investors and key decision makers can identify value that extends beyond quarterly earnings reports.
How much are brands really worth?
A Closer Look at the Leaderboard
With 18% growth in the last year resulting in an eye-watering brand value of $220 billion, Amazon is a clear winner as the world’s most valuable brand—towering over Google and Apple’s brand valuations. As the largest online marketplace on the planet, Amazon relies on innovative technologies and investments in fast-growing sectors, such as healthcare, to create a diverse retail ecosystem.
Although tech companies command five of the top 10 spots in the ranking, brands from more traditional industries are hot on their tails.
Here are the top 100 most valuable brands according to the report:
|Ranking||Brand||2020 Brand Value||YoY % Change||Country||Sector|
|#13||China Construction Bank||$62B||-10.2%||China||Banking|
|#18||Agricultural Bank of China||$55B||-0.7%||China||Banking|
|#20||Bank of China||$51B||-0.7%||China||Banking|
|#21||The Home Depot||$50B||7.3%||United States||Retail|
|#23||Shell||$47B||12.4%||Netherlands||Oil & Gas|
|#24||Saudi Aramco||$47B||N/A||Saudi Arabia||Oil & Gas|
|#29||Wells Fargo||$41B||2.3%||United States||Banking|
|#33||PetroChina||$38B||3.3%||China||Oil & Gas|
|#34||Coca-Cola||$38B||4.8%||United States||Soft Drinks|
|#39||Bank of America||$35B||-3.6%||United States||Banking|
|#42||Sinopec||$33B||14.7%||China||Oil & Gas|
|#47||Deloitte||$32B||9.6%||United States||Commercial Services|
|#51||American Express||$29B||6.2%||United States||Commercial Services|
|#53||United Healthcare||$28B||-7.4%||United States||Healthcare|
|#54||Sumitomo Group||$28B||4.5%||Japan||Mining, Iron & Steel|
|#56||VISA||$27B||-3%||United States||Commercial Services|
|#59||Accenture||$25B||-3.8%||United States||IT Services|
|#61||CSCEC||$25B||-3.3%||China||Engineering & Construction|
|#62||PWC||$25B||-0.3%||United States||Commercial Services|
|#64||Mitsui||$24B||15.8%||Japan||Mining, Iron & Steel|
|#65||General Electric||$24B||-14.4%||United States||Engineering & Construction|
|#66||EY||$24B||2.1%||United Kingdom||Commercial Services|
|#69||BP||$23B||2.6%||United Kingdom||Oil & Gas|
|#71||Total||$23B||8.1%||France||Oil & Gas|
|#74||China Merchants Bank||$23B||1.8%||China||Banking|
|#75||JP Morgan||$23B||15.3%||United States||Banking|
|#76||Boeing||$23B||-29%||United States||Aerospace & Defence|
|#78||SK Group||$22B||-17.5%||South Korea||Telecoms|
|#82||Hyundai Group||$21B||-2.8%||South Korea||Automobiles|
|#84||Siemens||$21B||-7.2%||Germany||Engineering & Construction|
|#85||TATA Group||$21B||2.3%||India||Engineering & Construction|
|#86||Mastercard||$21B||8.4%||United States||Commercial Services|
|#87||Bosch||$20B||-14.6%||Germany||Engineering & Construction|
|#92||Pepsi||$19B||2.2%||United States||Soft Drinks|
|#98||Chevron||$18B||4.7%||United States||Oil & Gas|
|#100||Dell Technologies||$18B||-22.9%||United States||Tech|
American retail giant Walmart enters 2020’s top 10 ranking with an impressive brand value increase of 14% to $77.5 billion. The retailer’s recent success could be partially attributed to its growing strategic partnership with Microsoft—which currently sits in sixth place. By tapping into Microsoft’s cloud services, Walmart can now provide a digital first retail experience for its customers.
Another brand that has experienced remarkable growth is China’s leading insurance company, Ping An. With 19.8% growth, resulting in a brand value of $69 billion, the financial conglomerate’s aggressive focus on fintech R&D has garnered the company 200 million retail customers and 500 million internet users—making it one of the largest financial services companies in the world.
While the majority of the world’s most valuable brands hail from the U.S. or China, which brands lead by region?
Most Valuable Brands by Region
Not surprisingly, Amazon leads as the most valuable B2C brand across the Americas, with the exception of Latin America. Beer brand Corona, was crowned as the leader in this region, boasting a brand value of $8.1 billion.
In Europe, German companies outperformed other countries, with automotive brand Mercedes-Benz holding the title for the most valuable B2C brand for that continent—despite China being its biggest market.
On the other side of the world, Samsung reigns as Asia’s most valuable B2C brand. The company owns 54% of the nascent 5G market globally, having shipped 6.7 million 5G phones in the last year alone.
A Brand Eat Brand World
Whether brands are regional or global leaders, they still face the threat of being knocked of their perch by brands experiencing significant growth.
Climbing to the Top
With an increase of 65% to $12.4 billion, Tesla is officially the fastest-growing brand in the world. Despite concerns over not being able to keep up with demand, the electric car company is expected to exceed 500,000 vehicle deliveries in 2020. Having recently posted over $7 billion of revenue in the fourth quarter of 2019, the success of Tesla’s innovative models is sure to rattle the automotive brands in the ranking.
However, not everything comes down to innovation. European retailers Lidl and Aldi have seen growth of 40% and 37% respectively, and are only getting started.
After disrupting Europe’s entire supermarket industry by offering quality products at significantly lower prices, the chains now have their sights set on the U.S. market, with Aldi expected to surpass Kroger in sales.
Despite the unprecedented disruption caused by e-commerce, the popular assertion that entering digital operations brings instant success while bricks and mortar stores are doomed for extinction is being proved wrong
—David Haigh, CEO Brand Finance
In contrast, there are also well established brands that have struggled to retain brand value.
Racing to the Bottom
Chinese search engine Baidu—also known as the Google of China—recorded the largest drop in brand value, decreasing by 54% to $8.9 billion. The brand has struggled with a poor reputation and intensifying market competition. As a result, the brand’s revenues and subsequently its brand value were heavily impacted.
Boeing is a prime example of the unpredictability of brand value. As a company that once imbued trust and excellent safety standards, the brand’s value has dropped by 29% due to the recent reports of accidents that have tarnished its reputation.
The True Power of Brand
Boeing’s recent hardships reflect the volatile nature of brand value. While 244 brands in the entire ranking have increased their brand value year-over-year, another 212 have taken a hit.
Part of a brand’s purpose is to manage reputation, retain loyal customers, and generate awareness. Given that a brand is the sum of its parts, the ranking proves that an issue with any of these things could trigger a chain reaction, negatively impacting a brand’s bottom line.
So is it worth companies investing in their brand? All signs point to yes, for now.
Animation: How Tech is Eating the Brand World
Changing consumer expectations have created a harsh environment for traditional brands to operate in—will tech companies make them obsolete?
How Technology is Eating the Brand World
Building a brand with an imperishable competitive edge can be difficult.
Technology companies however, are redefining what that edge means. By hastily responding to emerging consumer needs and leveraging the power of brand, these companies can continuously create meaningful solutions for real problems with scale.
Today’s animated chart highlights the most valuable brands in 2019 versus 2001, according to the annual “Best Global Brands” ranking by Interbrand. It illustrates the degree to which technology companies have been able to scale into massive brands over a short time frame, supplanting some of the best known companies in the world.
What is Brand Value, and How is it Measured?
Interbrand has created and consistently used a robust formula to measure brand value. Brand value is the Net Present Value (NPV) or the present value of the earnings that a brand is forecasted to generate in the future.
The formula evaluates brands based on their financial forecast, brand role, and brand strength. The full methodology can be found here.
Tech Reigns Supreme
In 2001, the cumulative brand value was $988 billion. Today, that value stands at $2.1 trillion and represents an average CAGR of 4.4%. Over the years, global tech giants have swiftly climbed the ranks, and now represent a significant amount of the total brand value.
In fact, with a combined brand value of almost $700 billion, tech companies account for half of the top 10 most valuable brands in the world. Perhaps unsurprisingly, Apple holds the title for the world’s most valuable brand in 2019—for the seventh year running.
Only 31 brands from the 2001 ranking remain on the Best Global Brands list today, including Disney, Nike, and Gucci. Coca-Cola and Microsoft are the few who have remained in the top 10.
Below is the full list of the world’s most valuable brands:
|Rank||Brand||Brand Value ($B)||1-Yr Value Change||Industry|
|#71||Hewlett Packard Enterprise||$8B||-3%||Technology|
|#86||Johnson & Johnson||$6B||-8%||Retail|
|#94||Tiffany & Co||$5B||-5%||Fashion|
Since 2001—the first year the report featured 100 brands—several tech companies have joined and climbed their way to the top of the list, while 137 notable brands dropped off entirely, including Nokia and MTV.
In an interesting turn of events, Facebook dropped out of the top 10, and into 14th place after a volatile year. The move however, is not surprising. The tech giant has been mired in controversies, ranging from data privacy issues to prioritizing political influence.
Which Brands Are Growing the Fastest?
2019’s fastest growing brands also signals tech domination, with Mastercard, Salesforce and Amazon leading the charge.
The companies in this ranking experienced a significant increase in their brand value year-over-year (YoY).
|Rank||Brand||Brand Value ($B)||YoY Growth|
According to Interbrand, the success of these brands may be attributed to their ability to anticipate rapidly changing customer expectations.
While the relationship between business performance and brand equity has been a widely debated topic for decades, it is clear that customer satisfaction bolsters brand equity, and encourages impressive financial results.
Disrupt, or Be Disrupted
Beyond anticipating changing needs, some of the most successful brands also cater to a younger customer base. This is the most evident in luxury and retail—the two fastest growing sectors for the second consecutive year.
This audience is tech-first in their buying habits and increasingly demand more elevated and shareable experiences. As a result, traditional brands across all sectors are innovating to keep up with this audience, and some are essentially becoming tech companies in the process.
For example, Gucci attributes their success to finding the perfect blend between creativity and technology. The company that once relied on its heritage, now focuses heavily on ecommerce and social media to engage with their Gen Z customers.
Similarly, Walmart recently announced that they are employing virtual reality headsets and machine-learning-powered robots in an attempt to compete with Amazon.
Will traditional companies ultimately become tech companies, or simply get eaten alive?
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