Brand Valuation

May 19, 2009

I am co-hosting a webinar next Tuesday (May 26) on brand valuation as part of the ANA’s Marketing Accountability series so forgive me as I rehearse my position on this topic.

For me, the key points are that brand valuation:

  • Involves valuing the brand as if it were an independent asset of the business
  • Is a specialist discipline with considerable value added to specific commercial contexts
  • Is – contrary to popular belief – NOT a very effective mechanism for demonstrating marketing accountability
  • Is often commissioned for reasons of corporate ego, not business insight

One of the exhibits I am creating for the webinar is “What does it take to get onto the list of the top 100 brands in the world?”  If you believe Interbrand’s data, you need a brand that is worth $3bn to crack the top 100. If you believe Millward Brown and Brand Finance, you need a brand that is worth $6bn (I have pointed out the inconsistency between the agencies in earlier posts so will not dwell on this now…)

For fun, I have decided to work out what kind of a revenue base you require in different industry sectors in order to have your brand appear in the global 100.   The ratio of brand value to revenue depends on two key factors:

  • The relationship between market value and revenue for that sector
  • The proportion of brand value as a percentage of market value for that sector

Using these two variables and a target brand value of $6bn, this is what I found to be the qualifying revenue levels per industry sector:

  • IT – $30bn
  • Healthcare – $34bn
  • Consumer Staples/Durables – $36bn
  • Financials – $77bn
  • Industrials – $130bn
  • Utilities – $175bn
  • Energy – $190bn

Truly it is harder for a camel to pass through the eye of a needle than for an energy company’s brand to make it onto the list of 100 top global brands…

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