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Brand Finance US 500 - The Billion Dollar Brands Club

17 March 2014
This article is more than 6 years old.

Welcome to the Brand Finance US 500. In the first and only study of its kind, leading brand valuation consultancy Brand Finance has put all of America’s listed companies to the test to determine how much their brands are really worth. The top 500 most valuable brands that make the list are all able to claim membership of the ‘Billion Dollar Brands Club’.

Overview

 ALL of America’s top 500 brands are worth in excess of $1 billion
 There are approximately 15,000 listed companies in the US but only 519 billion dollar brands
 The total brand value of America’s top 500 brands is $2.5 trillion

America’s Most Valuable Brand

  • Apple is the first and only brand to be valued at over $100 billion
  • It has been crowned the world’s most valuable for 3 consecutive years
  • Its $105 billion brand value is more than the totals of 44

Tech Takeover

  • Tech is the most valuable sector in the Brand Finance US 500, making up 23% of the total
  • The 52 tech brands collectively generate over $550 billion of brand value
  • Half of this value is generated in California, or Silicon Valley to be precise, home to brands such as; Apple (brand value $105bn, 1st in the US), Google ($69bn/2nd), Intel ($23bn/18th), Oracle ($21bn/22nd), HP ($20bn/24th), Ebay ($13bn/37th), Facebook ($10bn/48th) Salesforce ($2.6bn/223rd), LinkedIn ($2.2bn/278th) and Twitter ($1.5bn/375th)
  • Tech brands based outside California include Washington’s Microsoft ($63bn/3rd) & Amazon ($45bn/7th), Connecticut’s Priceline.com ($7bn/65th) and Xerox ($4bn/124th), New York’s IBM ($42bn/9th), and Dell ($8bn/55th) from Texas
  • Paypal ($7bn/64th) and Netflix ($3.2bn/174th) are this year’s biggest tech winners, increasing their brand values by 102% and 93%, respectively. With no notable losers, the technology sector will continue to be the primary generator of brand value in the foreseeable future.
  • However, the success of technology brands comes at the expense of ‘real world’ brands. Retail is the latest sector to fall victim to technology with Walmart ($44.8bn/8th), once America’s most valuable brand, being overtaken by Amazon ($45.1bn/7th). Walmart has struggled to keep up with Amazon’s range and speed of delivery, providing customers with a simpler way to buy goods that would otherwise draw shoppers to Walmart’s ‘Supercentres’. As a result, Amazon grew 23% whilst Walmart staggers behind at 6%

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Media Contacts

Konrad Jagodzinski
Konrad Jagodzinski
Communications Director
Brand Finance
Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations 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 nearly 100 reports which rank brands across all sectors and countries.

Brand Finance is a regulated accountancy firm, leading the standardisation 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.

Methodology

Definition of Brand

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

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 Valuation Approach

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.

Disclaimer

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.

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