What is the most valuable brand in the world?

Every year the folks at Millward Brown use their BrandZ study to tell us who has the most valuable brand in the world. This year they declare Apple as the most valuable brand, besting Google after their four-year reign. The folks at Millward Brown use a sophisticated calculation that subtracts tangible assets from market value to try to determine brand value. Thus, Amazon.com beats Wal-Mart in brand value, though neither makes the Top 10.

While I’m sure the folks at Millward Brown know how to calculate brand value, and I suspect I would not quibble with their math, I actually object to how they then rank the results. To my way of thinking, what makes a brand truly valuable is its ability to mitigate the performance of others in the category. So, I agree with Apple which dominates with the iPad, iPhone (though less lately), iPod, etc.; while getting a premium price. (This is not true in computers where they are really a minor player.) I also agree with Google which dominates search … but not much else.

That being said, they also ranked Coca-Cola, McDonald’s, IBM and AT&T in their top 10. Strong companies, large companies, but dominant brands? I think not. I do not consider them to have brand dominance in their category, and therefore would rate their “brand value” lower overall.

I believe the folks at Millward Brown, like many other pundits, have confused company value with brand value. A company like P&G can have lots of valuable brands, but not make the list because other companies, whose name and brand are synonymous, are larger. This also misleads as to true brand value.

A valuable brand is one that engenders buyer preference. The larger the market, the larger the potential value of the category. However, to calculate “brand value” as opposed to category or company value, you have also include the brand’s relative strength in its category. This is something Millward Brown appears to under-appreciate.

Mitch

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One Response to What is the most valuable brand in the world?

  1. Pingback: How much is a Brand worth? | Value Acceleration

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