Both in real life and in the virtual world, there’s no way to escape them today: we meet well-known brands everywhere we go. They are as likely to be found when reading a paper as they are on city shop-fronts, on TV advertising or as the animated frame to an internet page. Using marketing measures such as these, companies are attempting to anchor characteristic qualities of their products or services firmly in the collective memory. At the same time, they want to boost the trust and loyalty of their customers. In the optimum instance, it generates a competitive advantage which pays for itself in the form of greater price-setting power and correspondingly higher turnover. To that extent, brand value is not only important for a company’s image, but also a key financial variable. Brand Finance specialises in determining brand value. The service provider was founded in 1996 with the aim of closing the gap between marketing and finance. Today, the London-based consultancy has a presence in over 20 countries.
CEO David Haigh leaves you in no doubt about the importance of strong brands in customer acquisition and customer loyalty, as well as in motivating staff. However, as he sees it, the primary aspect is still about “making money”. According to Haigh, brand valuation helps companies to maximise their profits. Every year, Brand Finance examines over 5,000 brands worldwide. This work results in their “Global 500” list, amongst other things. The publication of this ranking is greatly respected, not just amongst the companies concerned but also in the advertising sector and the media. It also frequently causes investors to sit up and take notice. “The Brand Finance research reveals the clear connection between strong brands and stock market performance,” writes Haigh, in the foreword to the latest report. He writes that analyses have shown that an investment in companies with high-value brands returns close on twice the average performance of the leading US index S&P 500®. View more information on investment solutions on the topic “Top Brands: Familiar the world over, and worth billions”.
In fact, the top spots in the current ranking go to companies that are also the measure of all things on the stock markets too. From the regional perspective, it is the USA that clearly leaves its mark on the “Global 500”. Brand Finance assesses the overall value of the brands included at an impressive USD 6.9 trillion. Of this total, 45.4% is attributable to US brands (see graphic). In terms of industry, technology dominates, accounting for 23.7% of the total. The experts also note particularly strong brand values for banks, in telecommunications, in car constructors and in retail. The world’s most valuable brand finds itself in a kind of hybrid status between the first- and last-named of these sectors. At USD 187.9 billion, it is the “Amazon.com” logo that sits at the top of the “Global 500”. A 24.6% increase compared with 2018 saw the e-commerce giant retain the no. 1 spot. The Microsoft brand value has grown by close on half, moving the software giant from 6th to 4th spot.
Both companies are basing themselves successfully on the cloud. They now occupy a leading position in the internet-based outsourcing of data and applications. “Brands venturing into new sectors, like Amazon and Microsoft, will continue to come out better than their competitors,” say Brand Finance, in praise of the duo’s expansion strategy. Conversely, companies which broaden their scope more slowly are set to miss out on key opportunities to boost brand value. As evidence, the analysts point to Apple, amongst others. The computer group saw its brand value in the latest ranking grow by just 5%. Even so, Apple was still able to defend its 2nd-place ranking. On the stock market, too, Apple need not fear the short-term comparison with Amazon.com. In 2019 to date, the iPhone manufacturer has performed better. It’s possible that investors are anticipating Apple pepping up its profits and brand value via the current move into the TV business.
View more information on investment solutions on the topic “Top Brands: Familiar the world over, and worth billions”.
