· Valued at over US$150 billion, Amazon becomes the world’s most valuable brand
· Apple and Google left behind as they fail to follow Amazon’s growth model
· Facebook’s jump to 5th place sanctions the dawn of the digital era for brands
· Big four banks dominate Australian Top 10, while Woolworths staves off a strong challenge from Coles to remain top Australian retail brand.
View the full list of the world’s 500 most valuable brands here
View the full list of 100 most valuable Australian brands here
Amazon (up 42% to US$150.8 billion) is now the world’s most valuable brand, ahead of Apple (up 37% to US$146.3 billion) and Google (up 10% to US$120.9 billion), according to the latest Brand Finance Global 500 report. The values account for each brand’s global value, with Amazon’s Australian launch in December 2017 still to be fully measured in the next 12 months.
Since Amazon’s humble beginnings as an online bookstore, the brand has become the world’s largest internet business by both market capitalisation and revenue. It is no longer just an online retailer, but also a provider of cloud infrastructure and a producer of electronics. Now, it is moving beyond the digital space, as last year’s takeover of Whole Foods for US$13.7 billion gave the brand a foothold in the realm of bricks and mortar. Amazon is also present in shipping, music and video streaming, alongside industry speculation on an impending bank acquisition in 2018.
David Haigh, CEO of Brand Finance, commented:
“Jeff Bezos once said that ‘brands are more important online than they are in the physical world’. He has proved himself right by choosing the name Amazon, known as the largest, most powerful river in the world, as 23 years later the Amazon brand carries all before it as an unstoppable force. The strength and value of the Amazon brand gives it stakeholder permission to extend relentlessly into new sectors and geographies. All evidence suggests that the amazing Amazon brand is going to continue growing indefinitely and exponentially.”
Global rankings: Amazon’s expansive growth strategy leaves Apple and Google behind
Although Apple defended 2nd place in the global ranking, with brand value rebounding to US$146.3 billion after the 27%-decline last year, its post-Steve Jobs future looks challenging. Apple has failed to diversify and grown over-dependent on sales of its flagship iPhones, responsible for two thirds of revenue. Poor Q4 2017 sales of iPhone X at only 29 million handsets fell short of expectations, and the model is predicted to be discontinued later this year. With the advent of emerging world brands like Huawei, Apple’s increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth.
Google has dropped from 1st to 3rd position, recording a relatively slow brand value growth of 10% to US$120.9 billion. Google’s online ads generated more traffic than expected as aggregated paid clicks rose by 47% in Q3 2017, boosting revenues. However, to compete with the world’s most valuable brands, presenting a solid performance is not always enough. Google is a champion in internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand. Google’s investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon’s new ventures. Nevertheless, the acquisition of 2,000 HTC smartphone staffers for US$1.1 billion indicates a shift to a more expansive approach.
Digital era is now as technology brands make their way up the ranks
For the first time since the inception of the Brand Finance Global 500 study, technology brands claim all top 5 places in the league table. Samsung (4th, US$92.3 billion) and Facebook (5th, US$89.7 billion) both recorded impressive year-on-year brand value growth of 39% and 45% respectively, overtaking AT&T (6th, US$82.4 billion).
The dominance of digital is set to grow even more in the coming years as other brands make their way up the Global 500. Google-owned YouTube more than doubled its brand value to US$25.9 billion, jumping 70 places to 42nd. Chinese technology brands, taking advantage of captive market conditions, can also boast high brand value growth, with Alibaba (12th), Tencent (21st), WeChat (49th), Baidu (57th), JD (65th), and NetEase (121st), going up by an average of 67% year on year.
Australia’s 100 Most Valuable Brands
Telstra (up 14% to US$12.4 billion) has retained the number one ranking as Australia’s most valuable brand for the third year in a row.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“Telstra’s brand continues to perform impressively across a number of brand attributes, with a resulting 13.6% increase in value. The strength of the brand is in contrast to the overall decline in Telstra’s market value of 21%, highlighting the ever increasing importance of the brand in the organisation’s business strategy and reputation. Telstra is also reaping the benefits of its customer focused investments in the next generation of networks.”
Australian retail brands in strong position to face challenge from global giant Amazon
With Amazon’s Australian launch late in 2017 foreshadowing intense retail competition, local retailing brands will face a new challenge by the world’s strongest brand. After a stellar run as Australia’s number one ranked brand from 2009 to 2015, Woolworths (up 11% to US$7.1 billion) had slipped from ranking second in 2016 to being the 5th ranked brand in 2017, but is again on the up.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“After a period on rationalisation and consolidation, Woolworths is again climbing to be the 4th highest ranked brand in Australia with an increase in brand value of 11%. Woolworths is also Australia’s number one ranked retail brand and has again staved off a strong challenge from Coles.”
Australian brand values relatively small on global scale, BHP wins global mining ranking
Australia’s number one most valuable brand, Telstra, is ranked at just #120 in the Global 500 ranking. Only nine Australian brands made the Global 500 ranking in 2018, up from eight last year with the addition of Optus at #457 globally. Optus (up 19% to US$3.9 billion) is the ninth most valuable Australian brand, with brand value growth mainly driven by strong customer brand equity.
In the mining sector, Australia continues to do well. BHP (up 29% to US5.1 billion) hit pay dirt as the world’s most valuable mining brand on the back of a comprehensive rebranding exercise in 2017. In addition to becoming the world’s largest mining brand, BHP achieved the highest increase in brand value of 29% among the top 10 Australian brands.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“BHP’s rebranding campaign with a back to heritage theme has paid off with a very impressive increase in brand value to not only being ranked 8th in Australia, but also the number one mining brand in the world”.
Commonwealth Bank remains Australia’s strongest brand
In addition to measuring total brand value, Brand Finance has also measured brand strength, analysing a brand’s performance on intangible measures, relative to its competitors. CBA has remained Australia’s strongest brand and is also the most valuable Australian banking brand with an AAA rating.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“While CBA and Telstra remain Australia’s strongest brands, the two exceptional performers are Qantas and Harvey Norman. While ranked 13th and 34th respectively in brand value, Qantas (3rd) and Harvey Norman (5th) are still in the top 5 Australia brands for brand strength.”
ENDS
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 500 most valuable brands in the world are included in the Brand Finance Global 500 league table. Likewise, the 100 most valuable brands in Australia are included in the Australia 100 league table.
Brand value is equal to a net economic benefit that a brand owner would achieve by licensing the brand. Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand.
More information about the methodology as well as definitions of key terms are available in the Brand Finance Global 500 report and Brand Finance Australia 100 report.
For an infographic and additional analysis on the most valuable brands by region, including Etisalat (Middle East and Africa), Mercedes-Benz (Europe), Pemex (Latin America), Samsung (Asia), and Telstra (Australasia), please consult the Brand Finance Global 500 report.
Data compiled for the Brand Finance Global 500 and Australia 100 league tables and reports is provided for the benefit of the media and is not to be used for any commercial or technical purpose without written permission from Brand Finance.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
