Global 5002018The annual report on the worlds most valuable brandsFebruary 2018Brand Finance Global 500 February 2018 3.Foreword.What is the purpose of a strong brand: to attract customers, to build loyalty, to motivate staff? All true, but for a commercial brand at least, the first answer must always be to make money. Huge investments are made in the design, launch, and ongoing promotion of brands. Given their potential financial value, this makes sense. Unfortunately, most organisations fail to go beyond that, missing huge opportunities to effectively make use of what are often their most important assets. Monitoring of brand performance should be the next step, but is often sporadic. Where it does take place, it frequently lacks financial rigour and is heavily reliant on qualitative measures, poorly understood by non-marketers. As a result, marketing teams struggle to communicate the value of their work and boards then underestimate the significance of their brands to the business. Sceptical finance teams, unconvinced by what they perceive as marketing mumbo jumbo, may fail to agree necessary investments. What marketing spend there is, can end up poorly directed as marketers are left to operate with insufficient financial guidance or accountability. The end result can be a slow but steady downward spiral of poor communication, wasted resources, and a negative impact on the bottom line. Brand Finance bridges the gap between marketing and finance. Our teams have experience across a wide range of disciplines from market research and visual identity to tax and accounting. We understand the importance of design, advertising, and marketing, but we also believe that the ultimate and overriding purpose of brands is to make money. That is why we connect brands to the bottom line. By valuing brands, we provide a mutually intelligible language for marketing and finance teams. Marketers then have the ability to communicate the significance of what they do, and boards can use the information to chart a course that maximises profits. Without knowing the precise, financial value of an asset, how can you know if you are maximising your returns? If you are intending to license a brand, how can you know you are getting a fair price? If you are intending to sell, how do you know what the right time is? How do you decide which brands to discontinue, whether to rebrand and how to arrange your brand architecture? Brand Finance has conducted thousands of brand and branded business valuations to help answer these questions. Brand Finances research revealed the compelling link between strong brands and stock market performance. It was found that investing in highly-branded companies would lead to a return almost double that of the average for the S&P 500 as a whole. Acknowledging and managing a companys intangible assets taps into the hidden value that lies within it. The following report is a first step to understanding more about brands, how to value them and how to use that information to benefit the business. The team and I look forward to continuing the conversation with you.David Haigh CEO, Brand FinanceBrand Finance Global 500 February 2018 5.Brand Finance Global 500 February 2018 4.Foreword 3About Brand Finance 4Contact Details 4Definitions 6Executive Summary 8Regional Overview 14Full Table 16Methodology 26Understand Your Brands Value 27Consulting Services 28Communications Services 29Contents.About Brand Finance.Brand Finance is the worlds leading independent brand valuation and strategy consultancy. Brand Finance was set up in 1996 with the aim of bridging the gap between marketing and finance. For more than 20 years, we have helped companies and organisations of all types to connect their brands to the bottom line.We pride ourselves on four key strengths: Independence Technical Credibility Transparency Expertise.Brand Finance puts thousands of the worlds biggestbrands to the test every year, evaluating which are the strongest and most valuable.For more information, please visit our website:brandfinanceContact Details.For business enquiries, please contact:Richard HaighManaging Director rd.haighbrandfinanceFor media enquiries, please contact:Konrad JagodzinskiCommunications Director k.jagodzinskibrandfinanceFor all other enquiries, please contact:enquiriesbrandfinance+44 (0)207 389 9400linkedin/company/ brand-financefacebook/brandfinancetwitter/brandfinanceFor further information on Brand Finance®s services and valuation experience, please contact your local representative:Country Contact Email addressAsia Pacific Samir Dixit s.dixitbrandfinance +65 906 98 651 Australia Mark Crowe m.crowebrandfinance +61 282 498 320Brazil Geoffrey Hamilton-Jones g.hamilton-jonesbrandfinance +55 1196 499 9963Canada Bill Ratcliffe b.ratcliffebrandfinance +1 647 3437 266Caribbean Nigel Cooper n.cooperbrandfinance +1 876 8256 598China Scott Chen s.chenbrandfinance +86 1860 118 8821East Africa Jawad Jaffer j.jafferbrandfinance +254 204 440 053France Victoire Ruault v.ruaultbrandfinance +44 0207 389 9427Germany Holger Mühlbauer h.muehlbauerbrandfinance +49 1515 474 9834India Ajimon Francis a.francisbrandfinance +91 989 2085 951Indonesia Jimmy Halim j.halimbrandfinance +62 215 3678 064Ireland Simon Haigh s.haighbrandfinance +353 087 6695 881Italy Massimo Pizzo m.pizzobrandfinance +39 0230 312 5105Mexico & LatAm Laurence Newell l.newellbrandfinance +52 1559 197 1925Middle East Andrew Campbell a.campbellbrandfinance +971 508 113 341Nigeria Babatunde Odumeru t.odumerubrandfinance +234 012 911 988Romania Mihai Bogdan m.bogdanbrandfinance +40 728 702 705Spain Teresa de Lemus t.delemusbrandfinance +34 654 481 043 South Africa Jeremy Sampson j.sampsonbrandfinance +27 828 857 300Sri Lanka Ruchi Gunewardene r.gunewardenebrandfinance +94 114 941 670Turkey Muhterem Ilgüner m.ilgunerbrandfinance +90 216 3526 729UK Richard Haigh rd.haighbrandfinance +44 0207 389 9400USA Amy Rand a.randbrandfinance +44 0207 389 9432Vietnam Lai Tien Manh m.laibrandfinance +84 473 004 468Brand Finance Global 500 February 2018 7.Brand Finance Global 500 February 2018 6.Definitions.Definitions. Brand Value+ Enterprise Value The value of the entire enterprise, made up of multiple branded businesses. Where a company has a purely mono- branded architecture, the enterprise value is the same as branded business value.+ Branded Business Value The value of a single branded business operating under the subject brand. A brand should be viewed in the context of the business in which it operates. Brand Finance always conducts a branded business valuation as part of any brand valuation. We evaluate the full brand value chain in order to understand the links between marketing investment, brand- tracking data, and stakeholder behaviour.+ Brand Contribution The overall uplift in shareholder value that the business derives from owning the brand rather than operating a generic brand.The brand values contained in our league tables are those of the potentially transferable brand assets only, making brand contribution a wider concept. An assessment of overall brand contribution to a business provides additional insights to help optimise performance.+ Brand Value The value of the trade mark and associated marketing IP within the branded business. Brand Finance helped to craft the internationally recognised standard on Brand Valuation ISO 10668. It defines brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.Alphabet Inc.GoogleBrand ValueGoogleGoogleEnterpriseValueBrandedBusinessValueBrandContributionBrand Strength IndexWidely recognised factors deployed by marketers to create brand loyalty and market share. Marketing Investment A brand that has high Marketing Investment but low Stakeholder Equity may be on a path to growth. This high investment is likely to lead to future performance in Stakeholder Equity which would in turn lead to better Business Performance in the future. However, high Marketing Investment over an extended period with little improvement in Stakeholder Equity would imply that the brand is unable to shape customers preference.Stakeholder Equity The same is true for Stakeholder Equity. If a company has high Stakeholder Equity, it is likely that Business Performance will improve in the future. However, if the brands poor Business Performance persists, it would suggest that the brand is inefficient compared to its competitors in transferring stakeholder sentiment to a volume or price premium.Business Performance Finally, if a brand has a strong Business Performance but scores poorly on Stakeholder Equity, it would imply that, in the future, the brands ability to drive value will diminish. However, if it is able to sustain these higher outputs, it shows that the brand is particularly efficient at creating value from sentiment compared to its competitors.MarketingInvestmentPerceptions of the brand among different stakeholder groups, with customers being the most important.Quantitative market and financial measures representing the success of the brand in achieving price and volume premium.StakeholderEquityBusinessPerformanceBrand StrengthBrand Strength is the efficacy of a brands performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.Analysing the three brand strength measures helps inform managers of a brands potential for future success.InvestmentEquityPerformanceBrand Finance Global 500 February 2018 9.Brand Finance Global 500 February 2018 8.Executive Summary.Amazon Claims Prime SpotAmazon is the worlds most valuable brand ahead of Apple and Google in the Brand Finance Global 500. The e-commerce giants brand value increased by 42% year on year to a whopping US$150.8 billion.Since the brands humble beginnings as an online bookstore, Amazon has become the worlds largest internet business by both market capitalisation and revenue. It is no longer just an online retailer, but also a provider of cloud infrastructure and a producer of electronics. Now, it is moving beyond the digital space, as last years takeover of Whole Foods for US$13.7 billion gave the brand a foothold in the realm of bricks and mortar. Amazon is also present in shipping, music and video streaming, alongside industry speculation on an impending bank acquisition in 2018.Apple and Google Left BehindAlthough Apple defended 2ndplace in the ranking, with brand value rebounding to US$146.3 billion after the 27% decline last year, its future looks bleak. Apple has failed to diversify and grown over-dependent on sales of The strength and value of the Amazon brand gives it stakeholder permission to extend relentlessly into new sectors and geographies. All evidence suggests that the amazing Amazon brand is going to continue growing indefinitely and exponentially.David HaighCEO, Brand FinanceExecutive Summary.its flagship iPhones, responsible for two thirds of revenue. Poor Q4 2017 sales of iPhone X at only 29 million handsets fell short of expectations, and the model is predicted to be discontinued later this year. With the advent of emerging world brands like Huawei, Apples increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth. Google has dropped from 1st to 3rdposition, recording a relatively slow brand value growth of 10% to US$120.9 billion. Googles online ads generated more traffic than expected as aggregated paid clicks rose by 47% in Q3 2017, boosting revenues. However, to compete with the worlds most valuable brands, presenting a solid performance is not always enough. Google is a champion in internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand. Googles investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazons new ventures. Brand Value Change 2017-2018 (%)Top 10 Most Valuable BrandsRank 2018: 1 2017: 3 BV 2018: $150,811m BV 2017: $106,396mBrand Rating: AAA-1+42%Rank 2018: 9 2017: 8 BV 2018: $61,480m BV 2017: $62,211mBrand Rating: AA+9Rank 2018: 10 2017: 10 BV 2018: $59,189m BV 2017: $47,832mBrand Rating: AAA+10+24%Rank 2018: 7 2017: 5 BV 2018: $81,163m BV 2017: $76,265mBrand Rating: AAA+7+6%Rank 2018: 8 2017: 7 BV 2018: $62,826m BV 2017: $65,875mBrand Rating: AAA-8-5%Rank 2018: 6 2017: 4 BV 2018: $82,422m BV 2017: $87,016mBrand Rating: AAA-6Rank 2018: 2 2017: 2 BV 2018: $146,311m BV 2017: $107,141mBrand Rating: AAA+2+37%Rank 2018: 3 2017: 1 BV 2018: $120,911m BV 2017: $109,470mBrand Rating: AAA+3+10%Rank 2018: 4 2017: 6 BV 2018: $92,289m BV 2017: $66,218mBrand Rating: AAA+4+39%Rank 2018: 5 2017: 9 BV 2018: $89,684m BV 2017: $61,998mBrand Rating: AAA+5+45%-5%-1%WuliangyeUQ CommunicationsHavalEvergrandeYouTubeTeslaGree Electric AppliancesNatWestApplied MaterialsNvidia-24%-24%-25%-27%-28%-34%-35%-36%-36%-43%161%140%124%118%114%106%106%100%98%97%Hyundai GroupHiltonLOréalHeinzLotte GroupPoly Real EstateSumitomo GroupExxonMobilUnder ArmourToshibaBrand Finance Global 500 February 2018 11.Brand Finance Global 500 February 2018 10.Executive Summary.Brand Value Over TimeBrand Value by Sector Executive Summary.Top 10 Strongest BrandsBSI Score92.3BSI Score90.4BSI Score90.4BSI Score90.6BSI Score90.6BSI Score90.6BSI Score91.6BSI Score91.5BSI Score90.9BSI Score90.8Nevertheless, the acquisition of 2,000 HTC smartphone staffers for US$1.1 billion indicates a shift to a more expansive approach.Digital Era is NowFor the first time since the inception of the Brand Finance Global 500 study, technology brands claim all top 5 places in the league table. Samsung (4th, US$92.3 billion) and Facebook (5th, US$89.7 billion) both recorded impressive year-on-year brand value growth of 39% and 45% respectively, overtaking AT&T (6th, US$82.4 billion). Change at the top is reflective of a wider global trend as the technology sector accounts for more than twice as much brand value as telecoms.The dominance of digital is set to grow even more in