Google Pips Apple as world’s most valuable brand
Google has replaced Apple as the world’s most valuable brand, with a brand value of US$109.5bn, according to Brand Finance’s Global 500, the annual ranking from the leading valuation and strategy consultancy.
In its latest research, Google’s brand value rose during 2016 by 24% (from $88.2bn) whilst Apple’s declined from $145.9bn to $107.1bn. Google last occupied the position of the world’s most valuable brand in 2011.
In order to determine a brand’s value, Brand Finance first evaluates factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation to determine the ‘strength’ of a brand.
The company remains largely unchallenged in its core search business, which is the mainstay of its advertising income. Advertising revenues were up 20% in 2016 as budgets are increasingly directed online and Google finds more lucrative revenue streams from digital consumers.
David Haigh, CEO of Brand Finance, commented at the release of the research: “Apple has struggled to maintain its technological advantage. New iterations of the iPhone have delivered diminishing returns and there are signs that the company has reached a saturation point for its brand. The Chinese market, where Apple has enjoyed a dominant market share, is becoming far more competitive with local players entering the market in a meaningful way. Samsung has also been successful in taking market share and financial analysts are projecting declining revenues and margins.”
Financial services companies comprise 20% of the Global 500 and, this year, China has been the big winner. Growth in brand value in China can broadly be attributed to the growth of the Chinese middle class and its maturing consumer economy.
The brand value of Wells Fargo fell 6% after a turbulent year for the brand and was replaced as the most valuable financial brand in the world by ICBC. However, it only fell three places on the overall ranking of most valuable brands, remaining the US’s most valuable banking brand, due to its deep roots across the country and its market share.
Payment service providers Visa and MasterCard’s brand value grew by 81% and 58% respectively in 2016, as their core markets continued to move towards a cashless society and become increasingly reliant on the two companies’ services.
Walt Disney fell from the position of the world’s most powerful brand to number 6 in the power rankings. This may be because its 2016 Star Wars release was a spin-off and less successful than 2015’s reboot of the main franchise, one of the highest grossing films of all time. Furthermore, Disney’s biggest films of 2016 are all associated with sub-brands rather than Disney itself – Star Wars: Rogue One (Lucasfilm), Finding Dory (Pixar), Captain America Civil War (Marvel).
Disney remains a hugely powerful brand and will be closely watched during 2017 when the eighth instalment of Star Wars is released and could propel the brand up the rankings again.
Of the 40 telecoms brands in the Global 500, AT&T overtook Verizon as the most valuable brand. Its geographical and acquisitive growth in South America and Mexico has been rewarded with continued growth in brand value and an increase in market share in the respective regions.
Spectrum is the highest new entrant of the Global 500. The brand created by Charter Communications which describes itself as the fastest growing TV, Internet and voice provider, counts the acquisition with Time Warner Cable and Bright House Networks under its name.
The behemoths of the non-alcoholic drinks industry, Coca-Cola and Pepsi have fallen by 13 and 12 places respectively as they continue to struggle against the trend towards healthier alternatives and greater scrutiny around marketing sugary drinks to children. Sprite was the only of company in this category to grow its brand value over the past year (from $3.8bn to $4.4bn).
Brands offering energy drinks, appear to be protected as Red Bull and Gatorade continue to increase their brand strength rating (by 1 and 3 index points respectively) with their marketing efforts continuing to focus on extreme sports and performance athletes.
The global fast food outlets McDonald’s, KFC and Domino’s Pizza continue to drop down the rankings in the world’s most valuable brands, with heavy competition in an increasingly fragmented market with healthier challenger brands offering greater choice for consumers. McDonald’s has fallen by four places in the rankings with its brand value decreasing by 9%, while KFC and Domino’s Pizza declined by 27% and 16% respectively.
The largest improvement within the sector, with a 45% increase in its brand value, came from Tim Horton’s, the fast food restaurant based in Canada, known for its coffee and doughnuts. Parent company, Restaurant Brands international, which also owns Burger King, has announced plans for expansion abroad with the Philippines and the UK tipped to be targets.
Aerospace & Defence
Boeing and Lockheed Martin were big gainers in brand value in 2016, rising by 17% and 32% respectively, while Northrop Grumman was a new entrant to the Global 500 at 418. In an increasingly uncertain world and with a newly elected President committed to military spending, American defence and aerospace companies have benefitted.
Conversely, Airbus has been a big loser within the category. Its fall in brand value of 10% can be linked to the poor reception of its latest model, the Airbus A380, the company’s failure to meet some orders and reductions in staff.
For more on the Brand Finance Global 500 League table, visit www.brandfinance.com.Tweet