The world’s most valuable brands of 2018 are here and Amazon dominates.
A new study published today by Brand Finance places Amazon at the top of the list of the world’s most valuable brands. Every year, David Haigh, CEO of Brand Finance, crunches the numbers and compiles information about the world’s biggest brands and how they stack up against the competition.
How is Brand Value Calculated?
Brand value is equal to the premium that can be charged for licensing the brand name. For example, the cost a towel manufacturer must pay Disney to print Moana on their products—that’s brand value.
How Amazon Climbed to the Top
Amazon products are fire, literally. With the inception of Fire-branded devices, the company has created a footprint in the electronic sector. Server space and cloud storage have also helped Amazon surpass other juggernaut tech companies. Since the company has looked for growth opportunities in seemingly every nook of the globe, they have found some opportunities other companies negated to identify or overlooked completely. The acquisition of Whole Foods has given the company a position in brick and mortar stores as well.
And how much did they grow? Get ready. Amazon’s year over year growth is up 42 percent, reaching brand value in excess of $150 billion. Not too shabby for Jeff Bezos, a man who started the company by selling books out of a storage unit.
Why Apple is Losing Ground
While a large ecommerce brand proliferates, a long-standing champion remains in place. Even with profits up 37 percent from last year, Apple is still playing second fiddle. The Brand Finance report notes Apple has gone the route of consolidation, opting not to diversify and focus on its cash cow—the iPhone. With 66 percent of its revenue coming from the iPhone product line, many wonder what the next step for Apple will be as the smartphone market is more saturated than ever.
Why Google is Struggling
Google, the house of one hundred zeros, has been knocked from position one to position three on the Brand Finance Global 500 Report. In a relentless market, its 10 percent growth was outpaced by ravenous competition. The company known for search and mobile operating systems has yet to cultivate a deep revenue stream from smartphones and will be incubating its autonomous vehicle program. In a general comparison with the top brand—Amazon—Google lacks diversification. The $1.1 billion acquisition of HTC’s research and development team shows a reaffirmed commitment to compete in the smartphone sector. Will this move bear fruit? Only time will tell.
Other Honorable Mentions
Samsung has a great year with a 39 percent increase in brand value over last year. It’s in a position to be the biggest manufacturer of Android smart phones.
2018 will be an interesting year for Facebook as it recently announced an algorithm change that favors people over brands. Coming in at the fifth position for brand value, the company is another example of a power shift from telecom companies to more digital-driven enterprises.
Another digital corporation that has made leaps and bounds on the Global 500 list is Youtube. The Google-owned company now sits in the 42nd spot after climbing up from position 82.
China has done a superb job at identifying digital market needs and finding a way to quickly deliver. Baidu, a tech company with a specialization in internet services and products, made the list at position 57. Alibaba, a large ecommerce conglomerate, was close to making the top ten this year in the 12th position.
After the recent acquisition of 21st Century Fox, Disney is now the strongest brand of 2018. It has a history of success, from media to theme parks to merchandise. Aside from a significantly larger market share, the 21st Century merger allowed Disney an organic way to reach more viewers through the brands they know and trust. Now international media companies like Sky, Star India, and Hulu will have the opportunity to show beloved Disney content.
How is Brand Value Different From Brand Strength?
Brand strength is calculated by the effectiveness of a brand’s performance, stakeholder equity, and marketing capital relative to its competition. Based on a 100 point scale, it is most commonly used as a metric in the determination of brand value.