The World's Most Valuable Brands - January 2025
Last week Brand Finance released its 2025 list of the world’s most valuable brands. ?Given the recency of the publication of Interbrand’s comparable list (released three months ago), it makes sense to compare the latest brand value league tables from Brand Finance, Interbrand and Kantar even if they straddle calendar years.
I believe passionately in the value of brands as accelerators and magnifiers of business performance but I do not believe in the practice of valuing brands as if they were standalone assets.
A comparison of these three lists illustrates why I am skeptical that brand valuation is contributing to the credibility of marketers in the boardroom. There is only limited consensus about which are the world’s most valuable brands – and limited consensus regarding the value of the same brands.
Limited consensus about the world’s most valuable brands:
The three lists contain 174 unique brands
Only 8 brands appear in the Top 30 of each list
Only 38 brands appear in the Top 100 of each list
50 brands appear on two of the three lists
86 brands appear on only one list
Divergence in the value of the same brands:
The aggregate value of the 38 brands that are common to all three lists is $2.61 trillion (per Interbrand) versus $3.23 trillion (per Brand Finance) versus $5.74 trillion (per Kantar)
The #1 ranked brand on each list, Apple, has a value that ranges from $489bn (Interbrand) to $575 billion (Brand Finance) to $1.1 trillion (Kantar)
For other brands, the divergence is even more extreme – there is a 10x difference between the minimum and maximum values for Nvidia; 9x for VISA; 7x for Mastercard; 5x for McDonald’s; 4x for Facebook, Hermes, Huawei, Starbucks and Uber?
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This disparity of valuation is reflected in the aggregate value of the Top 100 brands which ranges from $3.4 trillion (Interbrand) to $5.8 trillion (Brand Finance) to $8.3 trillion (Kantar)
What do I believe?
I believe?that a brand is an essential element of any successful business model because it impacts multiple aspects of the business – how effectively the business attracts and retains customers, how it recruits and engages employees, how it aligns its operations around a clear value proposition, and how it reduces its vulnerability to substitution.
As such, brands work to enhance the overall effectiveness of a company’s business model. That is, brands enhance the effectiveness of the?system. If their financial impact is to be evaluated, it should be expressed in terms of the change in multiple at which the business is valued (whether of revenue, earnings, invested capital or customers). This would be a more accurate way to characterize the impact of brands on making businesses operate more efficiently and impactfully.
Perhaps an analogy is useful here – if we think of the business as a car, and strategy as the engine, then the brand represents the drivetrain. The drivetrain determines the degree to which the power of the engine is transferred to the wheels.
Valuing brands is like valuing the drivetrain. It focuses our attention in the wrong place. It requires us to ignore that the performance of the drivetrain can only be understood in the context of the engine (the quality of the products and services) and the wheels (the quality of the service experienced by customers). By focusing on the drivetrain as a standalone asset, we conflate brand with design and communications. And we attribute to the drivetrain the improvement in the total customer experience (even though this improvement may actually be coming from the engine or the traction of the tires).
I have three reservations about brand valuation:
1.???? First, the discipline is predicated on the assumption that brands can be valued as standalone assets whereas I believe that their value is largely contextual
2.???? Second, this causes marketers to focus on the value of the brand (the drivetrain) as opposed to how they can best contribute to the effectiveness of the business (the car)
3.???? Third, it leads to a divisive relationship between marketing and other disciplines that are contributing significantly to the overall customer experience (such as product development, supply chain and customer service) because they perceive that marketing is trying to take credit for their contribution.
Marketing is the discipline that integrates the operations of the business into a coherent customer narrative and a consistent user experience. The foundation of every great brand is a compelling product or service; and the foundation for sustained business success is a compelling brand.
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Scot, Dad, Statistical Modeler, Marxist Economist, Global Marketer
3 周Jonathan Knowles Greg Silverman David Haigh, the absence of a coherent methodology undermines the idea and value of brands, and therefore of marketing and advertising as brand-building. I urged someone in the industry to bring you together. Further, none of you have the courage to acknowledge that the new economy and business models of technology platforms disrupt your valuations. https://www.dhirubhai.net/pulse/2009-2024-brands-spent-over-30-trillion-marketing-where-pearson-jcs5c/?trackingId=8MS2BjMML4rR5PMDAM7kWQ%3D%3D
Associate Director of Brand Economics at Interbrand
3 周"Which are the most valuable brands in the world? It depends who you ask" Does switching "Brands" with "companies" in your sentence above, result in a statement with clear answer that doesn't depend on whom you ask? I doubt it does. Of course brand valuation like any other valuation differs from one person / methodology to other. Ask any investment banker, hedge fund manager or investment analyst on their opinion about what companies are the most valuable, or which ones are drastically overpriced or undervalued by market and you will get more answers than number of people you have asked! Does that make the business / corporate valuation flawed? or maybe we should accept any "valuation" has a subjective element and personal or methodological opinion and belief about the future state of the subject of valuation...
Helping brands grow
4 周The idea that brands are not separable assets misses reality. The goal of a valuation is to isolate brand value inside the context of a business. Interbrand calls it the Role of Brand. To suggest isolated values do not exist, it overlooks that managers sell and license brands daily. The notion that valuation methods should align is a false test. Those managing a brand choose from a variety of valuation methods. They choose the one that fits their business question and meets shareholder, regulatory, and employee requirements. Varying valuations do not invalidate the method of any one company. It reflects the context you say is relevant. The usefulness of a valuation is not limited to the value itself. A technique may focus on consumers, or it may focus on historical transactions. Both are useful for the decisions a company faces. For Interbrand, we use our valuation method to evaluate brand management. We go beyond a static number to show how brand impacts growth and how growth impacts share price. The field of brand valuation raises standards. It drives financial literacy into marketing and marketing sensitives into finance. To suggest otherwise is false and unnecessarily hurts us all.
Founder of Brand Strategy Academy - practical, online brand strategy course | Experienced brand strategist | Author of 'Rebrand Right: How to refresh your brand and marketing to grow your business' - Out April 22 ??
4 周Love that you pulled this together Jonathan -thank you! I do the same every year too. Because the numbers are always so different I pay less heed to that, but I do use the brands that appear across all three top 100 lists as a great shortlist of examples to study. Despite their different industries and the variety of brand strategy jargon they use, they do have some things in common that all brand strategists can learn from. Here's a little take on that here, if useful. https://www.dhirubhai.net/pulse/what-best-brands-study-sarah-robb-1twhe/?trackingId=z6QFVKIpTKCRfbJ1T1Ccow%3D%3D
I solve complicated problems; by leading teams to successfully implement significant and positive changes.
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