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Agencies 4 Growth Festival Logo
Agencies 4 Growth Festival Logo
Agencies 4 Growth Festival Logo

Covid-19 slashes company valuations but brands can aid recovery

Brand valuations slumped in 2020, though companies like Mastercard and Apple have already recovered.

Company valuations worldwide collectively took a £16.7tn ($22tn) hit in the first quarter of 2020, as Covid-19 wrought havoc on businesses.

Brand Finance surveyed 55,000 publicly listed branded companies, in partnership with the International Advertising Association (IAA), concluding that brand value as a whole slumped $116.6 to $94.8tn between January and April.

The fall contrasts with a 69% surge of intangible assets of publicly listed companies worldwide since April, which stood at $65.7tn in September.

Companies are losing value

  • Why Brands Matter 2020 argues that household names in the corporate world are the key to sparking an economic recovery, arguing that big-name brands should be treated like ’gold or fine art’.

  • This confidence is borne out by figures showing that tentpole companies such as Apple, Amazon, Microsoft, Tesla and Visa have already recovered from a Covid-19 dip to post growth of 3.8%.

  • Such a turnaround is even more remarkable in the context of a global economy which is still languishing in the doldrums, with the latest IMF forecast projecting a contraction of 4.4%.

  • Today brand names are among the valuable assets a company has, according to the report, accounting for approximately 20% of total business value on average.

Brands are a ‘powerful tool for economic revival’

  • Brand Finance chief executive officer, David Haigh, said: “In times of crisis, brands – especially those most valuable and strongest in their categories and markets – become a safe-haven for capital. Like gold or fine art during past economic downturns, nowadays well-managed, innovative, and reputable brands are what the global economy turns to in the hour of need.“

  • Such praise found echo in IAA managing director of Dagmara Szulce who adds: “Brands are a powerful tool for economic revival, allowing consumers to quickly identify the companies and products they like or differentiate between them.

  • "Brands are there to protect consumers from the risks that are posed from unregulated, illegal and counterfeit products, giving consumers peace of mind in their purchasing decisions.”

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