· California is home to 80 of America’s 500 most valuable brands, more than any other state, as tech brands triumph across the US
· Apple, ranked 2nd in this year’s Brand Finance US 500 behind Amazon, takes over from Google as the most valuable brand in California
· More than doubling its value, California’s YouTube is the fastest-growing US brand; Tesla’s brand value is rocketing too
· California-based brands stand out as some of the strongest in the nation, with six achieving highest AAA+ brand rating, including Disney, Visa, Neutrogena
· Brand Finance US 500 2018 is the first brand ranking released in compliance with newly adopted ISO 20671 international standard on Brand Evaluation
The 2018 iteration of the annual Brand Finance US 500 ranking of America’s most valuable brands is the first study of its kind to be released in compliance with the ISO 20671 international standard on Brand Evaluation, adopted by industry leaders earlier this month. Brand Finance was instrumental in crafting both the newly released standard on qualitative Brand Evaluation as well as the ISO 10668 – the international standard on quantitative Brand Valuation, adopted in 2010.
David Haigh, CEO of Brand Finance, commented:
“Every year, Brand Finance puts thousands of the world’s biggest brands to the test, evaluating which are the strongest and most valuable across all markets and sectors. All our corporate brand valuations are compliant with both ISO 10668 and ISO 20671. The newly adopted international standard will be the guiding light for the entire brand valuation industry and Brand Finance is proud to be leading the way.”
The Golden State shines as home to most valuable US brands
The Brand Finance US 500 2018 report reveals that California is home to 80 of America’s 500 most valuable brands. The value of California’s top brands amounts to $851.2 billion and represents 26% of the total brand value in the league table. California is the undisputed leader nationally both according to number of brands and total brand value.
Laurence Newell, Director of Brand Finance North America, commented:
“Tens of the nation’s most valuable brands call California their home. No other state has amassed brand value the way that California has. What is most impressive about this fact is how quickly this happened, driven by the rise of brands in the technology sector. A mere 15 years ago, the state’s brand landscape was considerably different.”
This year’s study reveals that Tech sector brands have cemented their position as absolute leaders in the market as they now account for $977.0 billion or 30% of the total brand value in the league table. Overall, Tech brands have grown nearly $100 billion year on year and are prolific throughout the ranking of California’s most valuable brands. Nationwide, tech brands claim 5 of the top 10 positions in the ranking.
At the state level, Apple (brand value up 37% to $146.3 billion) has taken over from Google (up 10% to $120.9 billion) as California’s most valuable brand. Despite recording growth, Google was unable to keep pace with Apple and Amazon, which took this year’s top spot nationally, with its brand value growing by a remarkable 42% to $150.8 billion.
YouTube doubles brand value
YouTube (up 114% to $25.9 billion), which is owned by California-based Google’s parent company, Alphabet, is the fastest-growing brand in the Brand Finance US 500 rankings. Now the internet’s primary video source, YouTube registers hundreds of hours of video uploaded every minute. YouTube’s rise has opened up a new industry in its own right with the commercialization of vlogs and the creation of virtually unlimited marketing opportunities accessible to businesses large and small.
Another brand from California to achieve very fast brand value growth this year was Tesla (up 106% to $5.7 billion). Despite being founded only 15 years ago, Tesla has become one of the most valuable automobile brands in the world in a very short time. Tesla’s brand value has been built upon the environmentally friendly positioning, premium styling of their distinctive vehicles, and a very growth-focused corporate vision, which aims to bring a more affordable model to market very soon. However, doubts exist whether Tesla has the short-term manufacturing capability to satisfy consumer demand in terms of both volume and quality to match the brand expectations they have created.
California-based brands stand out as some of the strongest in the nation
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, through the Brand Strength Index (BSI) – a balanced scorecard of factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Along with the level of revenues, brand strength is a crucial driver of brand value.
According to these criteria, some of the strongest brands in the US 500 2018 also come from California, including Disney, which is not only the state’s strongest brand, but also the strongest brand both nationally and worldwide. Disney, with a BSI score of 92.3 out of 100 is one of six brands from the Golden State to earn an elite AAA+ rating; the others being Visa, Neutrogena, Facebook, Google, and Apple. Just a handful of brands in the world across all industries achieve such status.
Laurence Newell, Director of Brand Finance North America, said:
“A strong and valuable brand tends to deliver superior business performance. In periods of prosperity, strong brands serve as a launching pad for growth, equally, in times of crisis, they provide buoyancy to the business.”
Retail struggles with online competition
The rise of the Tech sector, and particularly online shopping giants like Amazon, has dealt a blow to the prominence of the traditional brick and mortar model. This year’s Brand Finance US 500 study reveals that two out of every three Retail brands in the ranking have lost brand value over the last year, which contributed to the fall of Retail to third rank among the brand-rich industries. Worth $279.3 billion, Retail has been overtaken by Banking & Financial Services, and accounts for only 8% of the total value of America’s top 500 brands.
Still in the game among America’s most valuable brands are Walmart, 8th nationally and the state of Arkansas’ most valuable brand, and Home Depot, 11th and the state of Georgia’s most valuable brand, valued at $61.5 and $33.7 billion respectively. Walmart’s recent selling spree, which included the divestment of British supermarket brand Asda, point to the Retail giant’s growing focus on the home ground battle with Amazon.
Big banking brands boom
As the damaging legacy of the financial crisis is slowly fading away, Banking & Financial Services brands are back in black. Now America’s second most valuable sector, Banking & Financial Services contributes $307.1 billion or 9% to the total brand value of the league table. All four largest high street banks in the Brand Finance US 500 ranking: Wells Fargo (9), Chase (10), Bank of America (12), and Citi (17), recorded significant growth, each adding between $2.5 and $5.1 billion brand value to last year’s results. Chase broke into the top 10 this year, following significant expansion over the last few years and announcements of further plans to open branches in cities like Boston, Philadelphia, and Washington, D.C.
Note to Editors
Every year, leading independent brand valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 500 most valuable US brands are included in the Brand Finance US 500 2018 league table.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance US 500 2018 report.
Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are 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, 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 over 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.
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.