Brand Finance's new analysis has found that global intangible value has increased by 8% from USD57.3 trillion in 2022 to USD61.9 trillion in 2023. This figure is significant; almost 3x the value of the GDP of the United States. During the same period, the value of global tangible net assets remains stable.
Every year, the Brand Finance Global Intangible Finance Tracker (GIFT™) report tracks the value of the world’s largest companies by intangible asset value. Intangible assets are identifiable, non-monetary assets without physical substance. Intangible assets can be grouped into three broad categories – rights (including leases, agreements, contracts), relationships (including a trained workforce), and intellectual property (including brands, patents, copyrights).
We reported a 25% loss to global intangible value in our 2022 edition of the GIFT report, as big tech firms began to make significant layoffs and investor sentiment waned. This year’s recovery in intangible asset value returns to the healthy trend seen since 2012 and therefore reflects the continued growing importance of intangible assets in the global economy today.
Annie Brown, General Manager at Brand Finance UK, commented:
“Brand Finance's latest data shows that the rate of global intangible value growth has returned to a more positive trajectory as the global economy stabilises and investor confidence is cautiously restored. Our research aims to demonstrate the continued growing importance of intangible assets like strong brands and innovative technology in driving productivity and growth potential. Companies that strategically deploy their intangible assets have the ability to significantly outperform their competitors.”
Apple (intangible assets up 17% to USD2.7 trillion) maintains its lead as the company with the highest intangible value, increasing by USD384 billion since 2022. Microsoft (intangible assets up 46% to USD2.3 trillion) has rebound from behind Aramco (intangible assets up 4% to USD1.8 trillion) to take second place. American tech giant Alphabet (intangible assets up 68% to USD1.4 trillion) has surpassed Amazon (intangible assets up 40% to USD1.2 trillion) to take fifth position, while Tesla (intangible assets up 15% to USD776 billion) remains in sixth place. A significant standout is Meta, (intangible assets up 435% to USD707 billion) which has increased its position by 61 ranks to seventh place, following restructuring and the renaming of the company from Facebook to Meta.
This year’s most intangible sector in relative terms (91% of total enterprise value) is Tobacco & E-Cigarettes, as companies invest heavily in proprietary technology and patented intellectual property around vaping devices to drive growth. Three major companies have accumulated significant disclosed intangibles and goodwill due to large acquisitions: China National Tobacco Corporation, BAT, and Philip Morris. While tobacco products are increasingly regulated in developed markets, e-cigarettes are at nascent stage and currently proving to generate high intangible value thanks in part due to lack of regulation of marketing these products in some jurisdictions.
The increase in intangible asset value for the Commercial Services sector this year can be attributed to companies actively incorporating innovative technologies like AI into their service offerings. Further, the Media sector is increasingly driven by social media megafirms such as Meta, which itself went through significant restructuring this past year, mostly driven by cost-cutting but also with the underlying motive of promoting the Metaverse to “build the future of human connection”. Insurance firms are transforming both their capacity and readiness to provide a financial safety net against the increasing volume and impact of climate-related and cyber-risks.
The US has seen a USD836 billion increase in intangible asset value from 2022, highlighting partial recovery from its USD4.9 trillion drop last year, giving it the largest absolute increase as a country. Behind the USA, Japan is the market with the second biggest increase in intangible asset value, up USD587 billion. This increase can be attributed to the significant growth of the Tobacco & E-Cigarette and Semiconductor industries, which now rank as the primary and secondary contributors to Japan’s intangible value percentage.
This year, Brand Finance has analysed results according to stock exchange in its assessment of global intangible value for the first time. The New York Stock Exchange (NYSE) ranks as the world’s largest stock exchange by intangible value, valued at USD2.5 trillion. However, OTCQB Venture Market, an over the counter (OTC) securities exchange platform, is the most intangible stock exchange overall in relative terms. The highly intangible nature of securities platforms explains OTCQB’s high 78% intangibility percentage.
The London Stock Exchange (LSE) also ranks in the top 25 most intangible stock exchanges this year. Looking ahead, the UK is well poised to create a more welcoming landscape for tech and innovation companies, bringing with it heightened investor appetite.
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.