I am bothered by the discrepancy in the value of individual brands across the Interbrand, Millward Brown and Brand Finance lists. I am particularly perplexed as to why the differences between Interbrand and Millward Brown lists (both of whom use the “earnings split” method) are greater than the differences between Interbrand and Brand Finance lists (who use different approaches – Brand Finance uses relief from royalty).
I am grateful to Gabi Salinas’ “International Brand Valuation Manual” for casting some light on the reasons why this might be so – her book documents 16 variants of the “earnings split” approach, making it entirely plausible that variances within the application of a single approach might be greater than variances across different approaches.
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The fundamental difference between Millward Brown’s ranking and the others is that we use survey research to establish the proportion of current intangible earnings which are due to the brand and to help define the brand earnings mulitple. More on this here: http://www.mb-blog.com/index.php/2008/04/23/the-brandz-top-100-physician-heal-thyself/
Nigel – thank you for making an important observation that the credibility of Millward Brown’s league table is definitely enhanced by its use of the BrandDynamics/BrandZ market research data as the foundation for its judgements about the proportion of earnings to be attributed to the brand.
The “earning split” approach is based on judgement calls, but at least Millward Brown has access to a richer set of data on which to make their calls.