Brand Value in 2022 Comes in at About $3 Trillion

The economy has only gotten more volatile over the past year, but one thing appears certain: Major brands saw their cumulative value increase substantially in 2022. Specifically, the top 100 brands ranked by Interbrands’ annual report topped $3 trillion for the first time in the 22 years the global consultancy has been calculating major marketers’ worth. Taken together, the value of the world’s most notable companies rose 16% over last year, the biggest leap the brand consultancy’s report ever recorded, according to Daniel Binns, CEO North America and global director of partnerships for Interbrand. Should Brands Be Allowed at the World’s Biggest Climate Talks? That stunning gain in the value of brands seems to belie the current state of the world—the sense of foreboding and anxiety among marketers and consumers. But as Binns noted, the rise reflects the enormous shifts in how brands present themselves. It’s also a recognition of companies responding to consumer expectations on a deeper emotional level. The numbers also tell the story about the swings in consumer attitudes and needs during the early period of the pandemic, which saw greater adoption of ecommerce and social media. All of the experiences of the past few years accelerated or entirely upended decades of brand marketing. Lastly, the road to $3 trillion is paved by only a handful of the 100 companies on Interbrand’s list. Interbrand’s brand valuation calculation is based on three components: financial forecast, the role branding plays in customer decision-making and brand strength. The financial aspect is a measure of a company’s future profit; role of brand is the measure of the purchase decision attributable to the brand versus "more functional attributes"; and finally, brand strength is grounded in a company’s ability to create loyalty, drive choice and command a premium into the future. Certain brands are being brought into the home in different ways because of the hybrid working environment.Daniel Binns, Interbrand If there’s a main takeaway to glean from Interbrand’s tallies, it’s that brand purpose, despite being viewed as intangible and not essential to hard numbers of profits and revenues, actually does make a difference, Binns said. That story can be seen in the shifting fortunes of Microsoft and Amazon. The value of brand purpose Earlier this year, when the economy was looking less sturdy in the face of unflagging inflation, the debate between emphasizing performance over brand purpose began rising in tenor. For some, it’s a matter of simply paying attention to the fundamentals of driving demand for products, whether it’s sneakers or software. A growing cynicism among consumers also started to drown out brands’ trumpeting their embrace of often superficial, insincere forms of “empathy.” But if a brand can avoid appearing a little too earnest or tone-deaf, Binns said, tending to larger social concerns can make a difference between a brand that’s up and one that’s down. Such is the case of Microsoft (valued at $278.2 billion by Interbrand), which has leapfrogged Amazon ($274.8 billion) to be No. 2 in the rankings. “Certain brands are being brought into the home in different ways because of the hybrid working environment,” Binns said. True, both Microsoft and Amazon thrived financially as remote work took hold over the past two years, he noted. But in terms of brand value in the minds of consumers, their divergent fortunes are the result of subtly differing stances on the matter of connecting a sense of purpose to their broader identities. “Microsoft’s brand has created a kind of ‘enterprise land’ in our homes, whereas before it was strictly encountered in the outside workplace,” Binns said. “In the face of a technology sector that has become perceived as malevolent, Microsoft is viewed as benevolent. It’s quite surprising to those of us who vividly recall Microsoft’s antitrust issues 30 years ago.” Amazon, meanwhile, is facing issues tied to a perception of anti-competitive behaviors, such as cracking down on unions and not doing enough to address consumers’ environmental concerns, Binns said, noting that ESG (environmental, social, governance) is a factor in its ranking methodology. “Amazon hasn’t made the leap into being regarded as a true leader in [the technology] category,” Binns said. “The business is still doing extraordinarily well. But Amazon’s stock has taken a hit recently, in part because the brand doesn’t enable the company to weather that storm. "The brand is fragile in the face of the market’s vagaries," he added. "Microsoft has built up such brand equity, they’re likely to be much more resilient in a steeper downturn.” Platforms are not enough There’s a fusion of being able to deliver satisfying and strong customer experiences along with a sense of integrity and ethics that surpasses customers’ expectations of what a brand typically does, Binns said. In the past, brands were premised on an identity. Then they became mere business assets. Now, they’re an ecosystem. Apple, Amazon and Google became known as platform brands. “It’s not enough to be a platform brand anymore,” Binns said. “Now, consumers and stakeholders are focusing on acts of leadership: Microsoft’s leap from being a pure ecosystem brand to being a brand that demonstrates a sense of integrity, empathy, humility.” Technology companies are still the biggest leaders in Interbrand’s rankings. But tech has become commodified. The main way to stand apart is to demonstrate a sensibility, taking a stand on issues important to consumers. Still, brands don’t live on goodwill. Purpose is a key leg supporting the brand. When it comes to supporting the performance aspect, Binns said it’s important to look beyond unsustainable promises of innovation. Instead, being adaptable is what matters in the end. And that’s why Apple remains at the top of value chain. Purpose-Led Brands Have an Opportunity to Diversify the Metaverse Apple’s evolution A decade ago—it could be argued even five years ago—brands changed very slowly, Binns said. Their value didn’t shift that much. There’s a lot more volatility now. That’s because brands and companies are much more in the public eye. People pay closer attention to a brand as a winner or loser in much the same way fans perceive a favorite sports team or star athlete. “You can define brands in two ways,” Binns said. “One set leads with a brand and then creates products in different categories based on what that brand represents. In the old days, you would create a product, build a brand around it and market the brand from there.” A brand is constructed to solve the needs of different people, Binns observed. Brands like Apple started with an idea to help people be more productive. Now, it’s about promoting “play” and entertainment with streaming content. With the Apple Watch, the company has also entered healthcare. It’s moved into financial services by partnering with Goldman Sachs on a credit card. “They take the ethos and the value of the Apple brand and apply it across multiple sectors,” Binns said. “Amazon, Disney, Microsoft all do that well. That’s why they’re showing exponential growth because they’re able to break free of their original category.” Tech’s power and resilience Tech stocks have been particularly battered lately. But in terms of brand value, they’re still the leaders. In fact, the platform companies comprise the top five brands in Interbrand’s report. Apple ($482 billion) scored an 18% rise in brand value and has remained at the top of the table. Google ($251.7 billion) has held onto its No. 4 spot. The remainder of the top 10 companies are: Samsung ($87.6 billion)Toyota ($59.7 billion)Coca-Cola ($57.5 billion)Mercedes-Benz ($56 billion)Disney ($50 billion) Nike ($50 billion, appearing in the Top 10 for the first time) To get a full picture of just how much Interbrand’s top 10 brands are worth, that cohort makes up 53% of the total value of the entire table. As that ranking shows, the growth in brand value is technology-fueled, but not limited to tech companies. Binns offers Nike as a prime example. “Nike appears across some many different areas,” Binns said. “We call it ‘arena thinking.’ It’s when a brand transcends traditional categories.” Paying attention to climate change is another area brands have shown a gradual, if often ham-fisted, affinity. About 90% of consumers say the environment is an important factor of their choice to buy from another company. B-to-B Marketers Worldwide Share Their Outlook for the Next 6 Months With LinkedIn Perhaps not too surprisingly, then, the influence of sustainability also affects b-to-b brand managers, Binns said. A recent Forrester study found a higher level of anxiety among b-to-b brand stewards during their 2023 budget planning. But here too, it seems, it’s important to encompass more than just concentrating on price and pure performance. “Buyers are looking more closely at b-to-b credentials when they evaluate who to do business with,” Binns said. “About 65% of all b-to-b buyers are millennials,” he added. “There’s a huge shift in expectations regarding the values of companies they do business with compared to Generation X and baby boomers. ESG is the driver of choice. After all, consumers are looking at who companies align themselves with. So one brand with a bad reputation can stain another company.”

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What Does Brand Value Amount To in 2022? About $3 Trillion

What Interbrand's top 100 brands report says about how to win in today's marketplace

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