Google (NASDAQ: GOOG) is the world’s most valuable brand with a $43.3 billion valuation. It is followed by Microsoft (NASDAQ: MSFT), Wal-Mart (NYSE: WMT), IBM (NYSE: IBM), Vodafone (NYSE: VOD), Bank of America (NYSE: BAC), GE (NYSE: GE), Apple (NASDAQ: AAPL), Wells Fargo (NYSE: WFC), and GE (NYSE: GE).
Many brand experts will have a problem with the Apple number. Why should discredited banks do so well? The data come from Brandirectory and its “World’s Most Valuable Brands List” which measures 500 brands. The methodology is based on discounted cash flow, future royalties, and the present value of intellectual property. It is, in other words, a black box that no one outside Brandirectory can fully understand.
There is a large industry in brand valuation research. It is led by BrandZ and Interbrand. Each of these companies has its own methodology so there is no consistent way to measure brand values. The wide differences among the results underscores this inconsistency.
The values get more obscure based on the numbers further down the list. Marlboro is No. 499 on the Brandirectory tables. It has a value of $2.3 billion. On the BrandZ and Interbrand lists, Marlboro is near the top and is worth tens of billions of dollars. How can the world’s most widely smoked cigarette do so poorly on one list and not the others?
The brand valuation industry has a bad name. It is no wonder when the figures from one research firm vary so wildly from the next. Each claims it has the best figures, but none are willing to explain why in a convincing way.
Brandirectory’s list will be forgotten tomorrow. It was hardly worth reading today.
Douglas A. McIntyre
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