How much money is a brand truly worth?
As Visual Capitalist's Omri Wallach details below, for some companies, a brand is something that helps slightly boost customer engagement and sales. But for others, including some of the largest companies in the world, a strong brand is one of their most valuable assets.
this animated graphic by James Eagle uses the annual brand rankings from Interbrand to track the world’s most valuable brands from 2000 to 2022.
Measuring Brand Value
One of the difficulties of brand valuation is its subjectivity.
In accounting, the value of a brand is sometimes represented as an intangible asset called goodwill on the balance sheet. That’s because the brand power associated with a company (i.e. brand recognition, brand loyalty, customer base, reputation, etc.) often makes a company more valuable than just the sum of its tangible assets like land, buildings, or product inventory.
This works for accounting purposes but is still a rough estimation, and doesn’t precisely quantify a brand’s true value.
For Interbrand’s studies, a consistent formula for brand strength was utilized which is based on a company’s financial forecast, brand role, and brand strength. It uses estimates of the present value of earnings a brand is forecasted to generate in the future.
The Top 10 Most Valuable Brands Since 2000
When the 2000s started, the internet was top-of-mind in terms of both markets and customer perception. The Dotcom bubble was driving the world’s largest companies, and brand value at the time reflected tech’s popularity:
Half of the top 10 most valuable brands at the time were in tech or telecom, including Microsoft, IBM, and Nokia.
Others were classic American brands and companies at the top of their fields, including Coca-Cola, General Electric, Ford, and McDonald’s.
But over the next 20 years, much of the old guard was replaced by new and rising brands. By 2022, only three of the top 10 most valuable brands from 2000 remained at the top:
Apple’s brand is now worth an estimated $482 billion, even though the company didn’t even crack the top 10 list back in the year 2000.
In fact, four of the top five brands on the 2022 list are directly in tech, and even Amazon (#3) is often considered a tech giant. Not surprisingly, brand value in the top 10 has grown almost across the board, though Coca-Cola is a notable exception, dropping $15 billion in estimated brand value over 22 years.
How will the most valuable brands continue to evolve over the coming decades?