Millward Brown, Interbrand assign different values to top brands

Confusion as Millward Brown, world’s leading research agency and expert in effective advertising and brand equity research, and Interbrand, world’s leading brand consultancy, have arrived at wide-gap valuations for the world’s top brands.

For instance, in its latest ranking of top100 brands report, Interbrand valued Apple, the world number one brand at $98.3 billion, while Millward Brown had earlier this year put the company’s value at $185 billion, a difference of about $86 billion.

Similarly, Google was weighed by Interbrand at $93.29 billion, while Millward Brown valued it at of $114 billion. There was also difference in the IBM brand valuation as Interbrand and Millward Brown recorded it differently at $78.8 billion and $112 billion, respectively. The same differentiation in valuation was recorded in McDonald brand, which made $41.9 in Interbrand estimation and $90.3 in Millward Brown ranking.

This year, Interbrand estimated the total value of all 100 Best Global Brands at $1.5 trillion – an 8.4 percent record increase over the total value of the 100 Best Global Brands in 2012. But Millward Brown put the total value of the 100 brands at $2.6 trillion.

In a statement, Interbrand said when determining the top 100 most valuable global brands, it examined three key aspects that contribute to a brand’s value: these include – the financial performance of the branded products or service, the role the brand plays in influencing consumer choice, and the strength the brand has to command a premium price, or secure earnings for the company.

Criteria for inclusion – since inception Interbrand has strictly followed the following: at least 30 percent of revenues must come from outside the home region, a presence on three major continents, including emerging markets, must be sufficient publicly available material on the brand’s financial performance, economic profit must be expected and must have a public profile and awareness beyond its own marketplace.

In arriving at brand valuations, according to Millward Brown, it is the only study to combine measures of brand equity based on interviews with over 2 million consumers globally about thousands of global ‘consumer facing’ and business-to-business brands with a rigourous analysis of the financial and business performance of each company (using data from Bloomberg and Kantar Worldpanel) to separate the value that brand plays in driving business revenue and market capitalisation.

Consumer perception of a brand is a key input in determining brand value because brands are a combination of business performance, product delivery, clarity of positioning, and leadership. The ranking takes into account regional variations since, even for truly global brands, measures of brand contribution might differ substantially across countries.

Explaining the differentiation, Michael Umogun of Millward Brown Lagos, said Millward Brown valuation of any brand was the product of both tangible and intangible assets of that brand. He suspected that the differentiation was on how the two consulting firms value the assets of each brand.

According to him, what Millward Brown calculates is the total equity of brands that are handled by its market scientists. He said there would not be wrong signals around the different valuations if the organisations state the parameters around their valuation.