Google Pips Apple: Apple No Longer the World’s Most Valuable Brand, Global Brand Ranking Reveals

01 February 2017
This article is more than 3 years old.

• The world's most valuable brand is Google, with a value of US$109.4 billion
• Apple’s brand value has dropped 27%, ending a 5 year period at the top
• Lego regains its status as the world’s most powerful brand ahead of Lego Batman release

Google’s brand value rose by 24% during 2016 (from US$88.2bn to US$109.4bn) whilst Apple’s declined from $145.9bn to $107.1bn, according to the latest Brand Finance Global 500 report. Google last occupied the position of the world’s most valuable brand in 2011. The company remains largely unchallenged in its core search business, the mainstay of its advertising income. Ad revenues were up 20% in 2016 as budgets are increasingly directed online and Google finds more innovative ways to monetise users.

David Haigh, CEO of Brand Finance, said: “Apple has struggled to maintain its technological advantage, with new iterations of the iPhone delivering diminishing returns, while the Chinese market is now crowded with local competitors. Apple has been living on borrowed time for several years by exploiting its accumulated brand equity. This underlines one of the many benefits of a strong brand, but Apple has finally taken it too far.”

Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. Brands are first evaluated to determine their power / strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation). Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into perpetuity to determine the brand’s value. The results of this analysis are ranked, with the world’s 500 most valuable brands featured in the Brand Finance Global 500.

View the full list of the world’s 500 most valuable brands here

Lego has regained its status as the world’s most powerful brand. The building blocks for Lego’s brand strength have always been present but the release of the Lego Movie in 2014 provided the final push required to make Lego the world’s most powerful brand in 2015. The first sequel, the Lego Batman Movie will be released on February 9th. Its predicted impact has helped Lego regain its top position, lost to Disney in 2016. Further planned releases will continue to build the brand for years to come, while contributing significantly to Lego’s already vast licensing income.

David Haigh adds: “Unvalued brands can lead to undervalued companies that are more vulnerable to takeover, struggle to secure adequate financing and miss market opportunities. Meanwhile a powerful brand can protect a company’s value during turbulent market conditions, create new market opportunities and increase profit margins. All companies should therefore not just know the value of their brands, but also understand what drives that value and how it can be harnessed to benefit the business as a whole.”

You can find more detailed insights into brands from industries such as TMT, Oil & Gas, Tech, FMCG, Banking, Fashion, and Aviation in the Brand Finance Global 500 2017 Report, highlights include:

China’s bank brands are now worth more than those of the United States
ICBC is the world’s most valuable banking brand
AT&T has overtaken Verizon to become the world’s most valuable telecoms brand
Emirates is no longer the most valuable airline brand, having been overtaken by American, United & Delta
Coca-Cola, Pepsi, McDonalds, KFC & Subway all see brand values fall, undermined by healthy eating trends
Nokia’s brand is back from the brink and back in the top 500, following takeover and rebrand of Alcatel and launch of the Nokia 6 phone
Read the full report on the world’s 500 most valuable brands here

ENDS

Note to Editors

For access to any of the infographics or images in our reports, please get in touch. Brand values are reported in USD. For precise conversions into local currency values, please confirm rates with the Brand Finance team. More information about the methodology, as well as definitions of key terms are available in the Brand Finance Global 500 report document.

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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.