Millward Brown’s full report on its 10th annual brand equity ranking sheds light on why Apple regained its #1 ranking from Google. The company bases its rankings on the perceptions of more than 3 million consumers across 50 countries.
With a 67 percent rise in Brand Value to $247 billion, Apple returned to number one in the BrandZ™ Top 100 Most Valuable Global Brands ranking. Success of the iPhone 6 and the related excitement surrounding the Apple brand drove the increase. Apple also led in the rate of brand value growth over 10 years – 1,446 percent.
The company noted that Apple’s remarkable growth in long-term brand equity was evident in the fact that it didn’t even make the top 100 brands when Millward Brown began its BrandZ measurements just ten years ago …
Millward Brown’s annual BrandZ study, which was released today, points to Apple as the second most valuable brand just below Google. This is a reversal from the previous study, which found Apple ranked just above Google.
In the study, Google’s brand value was calculated at $158,843,000, while Apple came in at only $147,880,000.
Of course, this study doesn’t actually point to which company is the most valuable. Instead, Millward Brown uses a combination of financial information—including projected future sales—and customer surveys to determine how much a brand is worth—or how much of the company’s value comes from customers’ views of that company. The entire process of determing a brand’s value is explained in detail on the Millward Brown website.
Essentially, information from customer surveys is used to determine a “brand contribution” number for each company. This number refers to how likely customers are to remain loyal to a company and other similar factors. This “brand contribution” is then multiplied by certain financial figures and the resulting figure is “brand value.”
This “brand value” represents how much of the company’s overall value comes from its brand. If it sounds a non-scientific, that’s probably because it is. Still, it’s interesting to see how consumers and firms like Millward Brown rank these companies.
The Wall Street Journal today shows that the value of Apple’s brand varies greatly depending on who is taking the survey. Apple’s brand may be worth as much as $183 billion, according to an earlier Millward Brown study. The study’s results greatly vary from a separate Interbrand study, which valued the company at less than a fifth of that value and half of the value of Microsoft’s brand.
The most valuable brand in the world, according to WPP PLC’s Millward Brown, is Apple Inc., worth $183 billion—nearly a third of the company’s market capitalization of $581 billion.
Omnicom Group Inc.’s Interbrand, however, judges Apple’s brand as worth only $33.5 billion, or eighth, behind such names as MicrosoftCorp. (ranked third at $59 billion), International Business MachinesCorp. and Coca-Cola Co. (first at $71.9 billion). Interbrand notes its estimate of Apple’s brand value has risen.
Why such a big difference?
“The value of brand is both art and science,” says Allen Adamson, a managing director of Landor Associates, a branding firm owned by WPP. “It’s simple in theory but hard to pin down in reality. It’s really about how much would a consumer pay for a caramel colored soda versus how much they would pay for a Coke.”
If you think about PCs, how much would someone pay for a similarly spec’d Microsoft PC Ultrabook vs. a MacBook Air? Usually much less. The same goes for tablets—even though Apple’s prices and margins are smaller than phones or PCs. Apple’s reputation is what allows it to grab such huge margins in its hardware.
Yet, Interbrand ranks Microsoft at double of Apple’s brand. I would re-run the numbers if I were Interbrand. Millward Brown’s numbers are below: