Marketing Week today issued a story revealing the latest brands to top Brand Finance’s Global 500 list of the world’s most valuable brands.

Wal-Mart topped the bill, if you’re interested, bumping incumbent Coca-Cola from the top spot, which the soft drinks giant had held since research began in 2007.

But it was the Coke vs. Pepsi battle that caught my eye:

It’s not all bad news for Coke, however. It is still the dominant beverage brand on the list. While Coca-Cola’s total enterprise value of $104.5bn (£71.2bn) is just 22% greater than that of Pepsi (which is 21st in the table), the Coke brand is 118% more valuable than its arch-rival.

What exactly makes a brand more ‘valuable’ than another is another post entirely, but the above should at least introduce you to the difference between a brand’s market or enterprise value (financially) and its commercial value in comparison to its rival(s).

But what this reminded me of in the main, was a fun little experiment that I have been meaning to post for a while, that I extracted from Rob Walker’s excellent work on the relationship between who people are and what they buy, Buying In. Walker was writing just last year, but for some time prior, traditional advertising methods were well on the way to being usurped by their younger digitally native upstart cousins in the social media space – invoking mass fear across the industry that brands and branding in the traditional sense no longer held the sway they once did.

So, taking the world’s biggest Superbrand (as it was then) and its arch rival, Pepsi, scientists at the Baylor College of Medicine put brand loyalty to the test amongst the disenchanted, anti-establishment student population. The results were, I thought quite remarkable.

First, they conducted the classic blind taste test – white-labelled, un-branded Pepsi vs. white-labelled, un-branded Coke. Unsurprisingly, given the very similar ingredients, the split was more or less half and half (with a slight slant in favour of Pepsi).

In the second round however, the subject had to choose between a labelled can (Pepsi for some, Coke for others) and an unlabelled one. Properly labelled, Pepsi again finished in a tie with its unknown competitor. But Coke on the other hand was by far the decisive favourite above its mystery rival.

And here’s the twist. In this second round, subjects were told that the unlabeled drink might be Pepsi or it might be Coke. In reality, the labeled drink was always  competing against itself. Thus, branded Coke totally trounced its unbranded self . Bizarre.

And when we look at the neurology behind it (courtesy of BrandChannel.com), we actually get scientific proof of brand impact. Ready? Here comes the science bit:

When Montague gave a taste of an unnamed soda to his volunteers he found that more people preferred Pepsi. On the scan images the ventral putamen, one of the brain’s reward centers, had a response that was five times stronger than for people who preferred Coke.

The shock came when Read repeated the experiment, this time telling volunteers which brand they were tasting. Nearly all the subjects then said they preferred the Coke. Moreover, different parts of the brain fired as well, especially the medial prefrontal cortex, an area associated with thinking and judging. Without a doubt the subjects were letting their experience of the Coke brand influence their preferences.

The work of Montague and other studies prove that branding goes far beyond images and memory recall. The medial prefrontal cortex is a part of the brain known to be involved in our sense of self. It fires in response to something — an image, name or concept — that resonates with who we are. Something clicks, and we are more likely to buy.

 Brand immunity? We’re not there yet.

And while we’re on the subject of the big red machine, take a look at their 2006 – most successful ever – advertising campaign, The Happiness Factory(click on the screenshot below to view). It’s fab. So fab, that they they are now rolling out a multi-player game version of the concept as an iPhone application – on top of the interactive sitealready online. Brilliant.