The world’s top commercial services brands have been grappling with the fallout from the COVID-19 pandemic, with brand values suffering.
COVID-19 has restricted and delayed the capacity of commercial services businesses to monetise their brands and global lockdowns have delayed the implementation - and so deferred the revenue - of many projects, while some clients have restricted spending altogether.
The past year’s disruption only partly explains the extensive brand value declines, however. The huge debts incurred by governments over the last year, and the continuing impact of COVID-19 in many parts of the world, cast a shadow over the global economy. In such an uncertain trading environment, a question mark remains over the ability of commercial services businesses to commercially leverage their brands.
Deloitte is the world’s most valuable commercial services brand with a brand value of US$26.7 billion. Although it has held onto pole position, Deloitte’s performance reflects the declines seen across the commercial services sector, with 18% of brand value lost. The story is similar for the rest of the big 4: PwC (down 10% to US$22.2 billion) EY (down 14% to US$20.3 billion) and KPMG (down 18% to US$12.2 billion). A greater proportion of Deloitte’s revenue is derived from consulting as opposed to audit and assurance, which has left Deloitte more exposed to the impact of COVID-19 relative to the other big 4.
Despite grappling with a challenging year, Deloitte continues to showcase its dominance in the sector claiming the titles of both the world’s most valuable and strongest commercial services brand. The combination of Deloitte’s focus on putting people first, paired with over 175 years of experience, makes for a truly resilient and world leading brand.Parul Soni, Associate, Brand Finance
Among the top professional services brands, Accenture has bucked the trend, managing to increase brand value by 3% to US$26.0 billion. Accenture’s focus on technology consulting has meant that the pandemic has been a help as much as a hinderance - lockdowns and social distancing requirements have accelerated the imperative to transition to digital solutions for organisations of all kinds, leading to an increase in revenues over 2020.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Deloitte is also the world’s strongest commercial services brand, with a Brand Strength Index (BSI) score of 91.0 out of 100 and a corresponding elite AAA+ brand strength rating.
Deloitte is closely followed by EY, with a BSI score of 89.6 out of 100 and also achieving the elite AAA+ brand strength rating. EY has committed to positioning itself as the most distinctive global professional services brand and has undertaken a series of activities to do so. An example is the launch of EY Ripples, a programme to positively impact one billion lives by 2030 by mobilising the EY network to unite in working towards the UN Sustainable Development Goals.
Payments – Visa overtakes American Express
Alongside professional services, the Brand Finance Commercial Services 100 ranks a number of other segments, including payments, human resources, business support, financial & investment information services, engineering & construction services, and credit agencies.
Visa is the second most valuable brand in the whole Commercial Services industry after Deloitte, with a brand value of US$26.5 billion. Rival Mastercard’s value is US$19.1 billion. The brand values of both have held up reasonably robustly, despite the pandemic, with only slight declines of 1% and 4%, respectively.
The same cannot be said for American Express, with its brand value falling by 19% to US$23.5 billion. Approximately 25% of revenues are derived from partnerships with hotels and airlines, leaving Amex much more exposed to the effects of the pandemic. Amex has also reduced merchant fees to increase acceptance, hitting revenue growth versus Mastercard and Visa.
In addition to suffering Covid-related revenue declines, Amex’s BSI score has also fallen significantly from 81 to 76 out of 100, which is primarily the result of reduced spend on Capex and research and development. Though perhaps a necessary measure in strained times, this reduction in investment is likely to limit the future potential of the brand, hence Brand Finance’s more pessimistic assessment of its strength.
While the restrictions on travel and physical retail have hit American Express, the reverse is true for Paypal (up 4% to US$16.4 billion). As spend has migrated online, new consumers have become more familiar with and willing to consider Paypal as a payments solution, while existing users have concentrated their spend via the brand. This has driven total payment volume close to one trillion dollars for in the 2020 financial year, with revenues topping US$21 billion.
Human resources take hit
The top three human resources brands have all seen significant brand value declines this year, thanks to a suffering job market, hiring freezes, and reduced demand for new hires in general. Randstad, the most valuable in the sub-sector, is down 8% to US$3.3 billion, Adecco is down 13% to US$3.1 billion while Manpower has fallen 28% to US$1.8 billion.
Business support - Willis Towers Watson tops sub-sector
In the business support sub-segment, Willis Towers Watson is the most valuable, with a value of US$2.6 billion. Here too, value is down, the brand has lost US$441 million in the last year. Cintas, which specialises in cleaning equipment and associated services might have been expected to perform more strongly given the need to make workplaces Covid-safe, but the shuttering of offices has seen it lose 12% of value to US$2.5 billion. The picture may be more positive for Cintas going forward however, as increase concern over health and hygiene, combined with a gradual return to office working leads to a recovery, or even elevation of demand.
Financial & investment information services – S&P gains 27%
Moody’s (brand value US$2.6 billion) and Bloomberg (brand value US$4.5 billion) have both seen the value of their brands fall by 2% and 10% respectively.
However, the leading brand in the information services sub-sector, S&P Global, has actually prospered during 2020 and is one of the fastest-growing brands, up 27% to US$8.7 billion. Significant demand for the brand’s products – namely its benchmarks, data, ratings, and research – as investors and companies globally sought to negotiate and understand the markets better amid the pandemic turmoil, has resulted in very solid financial results.
Engineering & construction services – mixed fortunes for brands
United Rentals is the most valuable in the sub-sector, despite recording a 25% brand value decline to US$2.1 billion. Fleet productivity took a hit last year, largely as a result of lower rental volumes.
In contrast, Jacobs Engineering (brand value US$1.9 billion), WSP Global (brand value US$563 million) and Arcadis (brand value US$459 million) have all recorded healthy brand value increases, up 15%, 9% and 28%, respectively. Arcadis was quick to implement cost cutting measures, including announcing a 30% reduction in the amount of office space the company leases.
Credit agency – Experian tops sub ranking
Experian tops the credit agencies sub-sector ranking with a brand value of US$1.8 billion. Recording a 13% loss in brand value this year, Experian suffered a major breach of customer information last year, which affected an estimated 800,000 businesses and 24 million South Africans.
Making up the podium in the sub sector are TransUnion (down 12% to US$1.5 billion) and Equifax (up 2% to US$1.4 billion). 2020 marked a record year for Equifax, which saw the brand deliver its 4th consecutive year of double-digit growth, largely thanks to strong performances in Workforce Solutions and U.S. Information Services.