Top Value: Google #1; Coke Slips From Top 10
Google has edged out Microsoft as the most valuable brand in the world, while Coca-Cola has dropped out of the top 10 for the first time, according to the BrandFinance Global 500 2011 rankings.
Google's estimated $44.3 billion brand value as of year-end 2010 pushed it up from #2 in last year's rankings, while Microsoft's $42.8 billion pushed it up to second place from a #5 ranking last year. The two tech giants superseded last year's #1 brand, Wal-Mart ($36.2 billion), now ranked third.
Brand Finance, a leading brand valuation consultancy, calculates brand values using a discounted cash flow technique to discount estimated future royalties at an appropriate discount rate, to arrive at a net present value of the trademark and associated intellectual property. The firm also ranks brands by benchmarking their strength, risk and potential relative to competitors, on a scale ranging from AAA+ to D.
Google's AAA+ brand rating reflects its frequent engagement in "comparatively uncommercial" ventures, such as developing services to help rescue efforts following the disasters in New Zealand and Japan and growing its not-for-profit arm, reports Brand Finance.
Coca-Cola's 26% decline in brand value, to $25.8 billion from $34.8 billion, caused it to slip from third place to a #16 ranking. Brand Finance attributed the decline to consumers in developed markets moving away from carbonated sodas in favor of healthier beverages. However, Pepsi rose from 31st to 24th place, with a $19.5 billion current valuation versus last year's $15.9 billion.
While the rankings' top 10 include Bank of America (#6), GE (#7), Wells Fargo (#9) and AT&T (#10), five are comparatively new tech companies. In addition to Google and Microsoft, they include IBM (#4 in both 2011 and 2010 rankings), Vodafone (now #5, up from #7) and Apple (#8, up from #20). Facebook made the 500 rankings for the first time, with a $3.7 billion valuation (#281 ranking).
A significant exception within the generally rising tech company rankings was Nokia, which lost $9.9 billion in value (to $9.7 billion), and dropped from 21st to 94th place.
"The rise of the technology brands has been expected for some time, although Nokia's fall shows that it is tough to stay at the forefront of such a dynamic industry," observes Brand Finance CEO David Haigh.
The brands occupying the #15 to #20 valuation rankings are, in order: HSBC, Verizon, HP, Toyota, Santander, Coca-Cola, McDonald's, Samsung, Tesco and Mercedes-Benz.
McDonald's rose one place, from #18 last year. Other relatively high-ranked brands among food/beverage and restaurant companies include Nestlé (#33, up from #66), Kellogg (#122, down from #98), Danone (#150, down from #123), Starbucks (#183, down from #163), Heinz (#195, not on 2010's list), Nescafé (#197, down from #198) and Kraft (#209, up from #437). Nestle Pure Life dropped to #331, from #258, and Cadbury dropped to #396, from #274.
In the automotive category, other high-ranking brands include Mitsubishi (#21), BMW (#23), Ford (#40) and Honda (#43). Among retailers, other high-ranked brands include The Home Depot (#22), Amazon.com (#32) and Target (#45). Among apparel brands, Nike was far and away the highest-ranked, at #31.
Senior management in leading companies across industries are "increasingly using brand valuation dashboards to monitor the health of their brands throughout the year in order to make better informed strategic marketing decisions," according to Haigh. "This trend is likely to continue, as the sheer size of these brand values becomes impossible to ignore.'"