Google tops Brand Finance’s list of America’s 500 most valuable brands

Google tops the list of the most valuable US brands

Each year, valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. Google, even with its recent troubles, has topped the list of America’s 500 most valuable brands. Apple, which was first last year, and Amazon follow in second and third place, respectively.

For the ranking, a brand’s strength is assessed (based on factors such as marketing investment, familiarity, preference, sustainability and margins) to determine what proportion of a business’s revenue is contributed by the brand. This is projected into perpetuity and discounted to determine the brand’s value.

America’s brands continue to reach new heights. The total value of America’s top 500 brands now exceeds $3 trillion dollars, having increased 11%, from $2.82 trillion in 2016 to $3.14 trillion this year.

Said Brand Finance CEO, David Haigh: “President Trump, an experienced brand builder himself, appears to have fostered a conducive environment for continued brand value growth. However, his longer term approach and objectives remain hard to pin down and 2017 could deliver as many, if not more, shocks than 2016.”

The branding world has already been dealt a blow in 2017, with Apple seeing nearly $40bn wiped off its brand value. Apple has over-exploited the goodwill of its customers by failing to maintain its technological advantage and delivering tweaks to existing products rather than genuine innovation, according to a release by Brand Finance.

Brand value has fallen 27% since early 2016 to $107bn, meaning that for the first time in over five years, America, and the world, has a new most valuable brand.

Six years after it last held the title in 2011, Google is now the world’s most valuable brand with a value of $109bn. The company remains largely unchallenged in its core search business, the mainstay of its advertising income. However, as Brand Finance CEO David Haigh observed, “the recent controversy over Google’s placement of customers’ ads alongside undesirable content illustrates that even companies with apparently dominant market positions must be conscious of the risks to their most valuable asset, their brand.”

Amazon continues to grow (its brand value is up 53% year on year) as it continues to reshape the retail market and capture more share. With a brand value only fractionally behind Apple and Google already, Amazon could easily become the most valuable brand in the US and the rest of the world by 2018.

Coca-Cola’s brand value was $43.1bn in 2007, making it the most valuable brand in America and the wider world. Today, however, its brand value now stands at just $31.8bn, putting it 16th in the US and 27th internationally. Increasing concerns over the links between carbonated drinks and obesity have begun to undermine what the Coca-Cola brand has represented for over one hundred years. Pepsi is similarly trending down, falling 4% to $18.3bn.

The fast food industry is headed south as well. The brand values of McDonald’s, KFC, Taco Bell, Pizza Hut, Subway and Domino’s have all fallen due to heavy competition in an increasingly fragmented market, with healthier challenger brands offering greater choice for consumers.

Airline brands are soaring in 2017 with United, Delta and American growing by 60%, 47% and 59% respectively. In the process, American has overtaken Emirates to become the world’s most valuable airline brand.

State of the states

California remains America’s most valuable state by brand value. Its dominance in tech has enabled it to pull well ahead of other states. Of the country’s top 500 brands, 71 hail from the Golden State, with a total value of $725bn.

New York takes second, with just one fewer brand in the top 500 than California, though a lower total at $481 billion. Finance comprises a large share of New York’s total brand value so New York has been affected by the stalling values of financial services brands.

The increasing concentration of brand value in tech also helps to explain Washington’s strong performance. The state has just 11 brands (16 states have more) but being home to two tech titans, Microsoft and Amazon, Washington ranks fourth with a total brand value of $242bn.

Texas is in third, with a broader base of brand value. Its 48 brands have a total value of $263bn. Oil and gas brands are well represented, including ExxonMobil and its portfolio of brands, however Texas is home to major brands from a wide range of sectors including AT&T (telecoms), Dell (tech), American Airlines and Whole Foods (retail).

Fifth-placed Illinois is another state with a diverse array of brands. McDonald’s ranks first of its 31 brands. Other Illinois brands are performing strongly with Boeing up 17%, Accenture 38% and United Airlines up 60%.

Only a handful of states have seen their number one brand change this year. Google’s defeat of Apple is perhaps the most striking case, though some other iconic brands have lost their local flagship status. For example, KFC is no longer Kentucky’s most valuable brand. It been hit by the turn away from less healthy fast-food operators and has seen its brand value fall 27% to $6.2bn. A growing focus on health has Humana as Kentucky’s new most valuable brand. The health insurance brand is now valued at $7.1bn, supported by continued customer acquisition, revenue growth and improving brand strength.

Meanwhile Harley-Davidson has lost its position as Wisconsin’s most valuable brand. In 2016 Harley was in the elite group of AAA+ rated brands and had a brand value of over $5bn. However, this value has dropped 38% and Harley has been overtaken by both Fiserv and Kohl’s. The latter now leads Wisconsin’s seven brands with a value of $4.9 billion.

The number of states with brands in the country’s top 500 has remained constant at 37. However, Arizona has dropped out, replaced by Mississippi. The Magnolia state’s Sanderson Farms makes its debut in the Brand Finance US 500 at 469th with a value of $1.3bn.

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