In a year of global economic turmoil, when every key financial indicator plummeted, the value of the top 100 brands increased by 2% to $2 trillion according to the latest annual BrandZ ranking. This demonstrates not only the resiliency of brands but also shows the importance of brand equity to a company’s market value. The annual ranking produced by Millward Brown Optimor identifies the world's most valuable brands by measuring their dollar value. The valuation which is based on the intrinsic value of the brand is derived from its ability to generate demand. Financial data is sourced from Bloomberg, analyst reports, Datamonitor industry reports, and company filings with regulatory bodies. Financial models are then prepared for each brand that link brand perceptions to company revenues, earnings, and ultimately shareholder and brand value. The valuation process for The BrandZ Top 100 includes:
Branded Earnings: What proportion of a company’s earnings is generated “under the banner of the brand”?
Brand Contribution: How much of these branded earnings are generated due to the brand’s close bond with its customers?
Brand Multiple: What is the growth potential of the brand driven earnings?
- Nine of the top 10 brands from last year remain in the top 10.
- Google is number one with a value of $100 bn, Microsoft is number two at $76.2 bn, and Coca-Cola enters the top three for the first time at $67.6 bn.
- 85 remain from last year’s listing. Of those that have dropped out of the ranking, nine were from categories particularly hard-hit by the economic storm: cars, financial institutions, and insurance.
- Even the luxury category has gained in brand value by 10%, affirming the deep and enduring claim that well-crafted items and brand heritage have on our imaginations and wallets.
- Customers are adjusting their coping strategies, while remaining determined to purchase brands that contribute to the pleasure, quality, purpose, and security of their lives.
The ranking can be downloaded from the Millward Brown Optimor website
Picture from Creative Commons: Flickr: missha