Economic crisis causes $6.3 trillion of intangible assets value to be lost since January 2011
The Brand Finance plc. Global Intangible Tracker League Table (GIFT) is a 10 year study of the intangible asset values of all public stock exchanges worldwide.
GIFT is released in January each year but due to the exceptional economic conditions it has been updated as of 24th August 2011
Further panic in world stock markets has resulted in a 25% ($6.3 tn) reduction in intangible asset values.
Despite the fall recorded in GIFT, an update of the Brand Finance Global 100 brands shows that there has only been a 2.4% drop in their combined value
Financial service brands hit hardest
Tougher legislation, sluggish activity in the corporate market and ongoing fears regarding exposure to sovereign debt has meant banking and insurance brands have suffered. Bank brands in the top 100 have lost $25.9bn from their total brand value (7%) since January 2011.
HSBC has become the world’s most valuable bank brand keeping a steady position at 10. Bank of America experienced a brand value fall of $5.3bn taking it down to position 14. Likewise Wells Fargo saw a 12% reduction in brand value and Santander also slipped back in the league table with a reduction of $3.3bn.
Insurance brands saw a drop of 6% with AXA fairing worst, with a loss of $1.6bn brand value taking them out of the top 50 global brands.
Sparking technology industry
The economic crisis has not led to a blanket reduction in brand value. Technology and electronics brands are prospering with Google, Apple and Microsoft taking the top 3 positions in the league table. Apple has increased its value by 33%, making it a more valuable brand than Microsoft for the first time.
The total brand value for the 46 US headquartered brands declined 2% from January. US brands dependent on their home market suffered bigger losses than global brands including McDonald’s, Nike and Coca-Cola who all improve their position in the league table.
Japanese brands dropped 3% as a result of the tsunami disrupting business. Europe has also felt the pressure with Spanish brands down 13% and France 5%, both are exposed to issues within the financial services sector.
In contrast, emerging economies including China, India and South Korea all show strong performances. In China the total brand value increased with two new brands entering the top 100; PetroChina and China Life Insurance Company. Argricultural Bank of China increased brand value by $1.5bn, rising from 99 to 71 in the league table.
Samsung is another notable performer, increasing the value of its brand to $26.6bn (up 24%). The South Korean company has not experienced the supply chain disruptions by their Japanese competitors and is developing a stronger hold on both the TV and smart phone markets. Similarly in India TATA moved up the league table with a new brand value of $14.8 bn at position 41 (previously 50).
David Haigh, CEO of Brand Finance plc, comments:
“As stock markets around the world falter, we are seeing a drop in the amount of intangible value global businesses hold and the value of the individual brands. The dramatic shifts that can be seen since the BrandFinance® Global 500 launched earlier this year illustrate how vital it is for businesses to track the value of their brands. Even the world’s biggest businesses are not immune to change.”
Coca-Cola has reversed the decline noted in BrandFinance® Global 500 and is now the 12th most valuable brand. This shift creates a greater lead over its longstanding rival, Pepsi ($19.1bn / 25th).
The automotive sector has also performed well in the last six months, with crisis-plagued Toyota re-entering the top 10 with a value of $28.8 bn.
In Europe, Germany maintained a steady position, underpinned by a stable economy and strong auto industry including brands BMW, Mercedes Benz and Volkswagen. The UK saw two additional brands enter the top 100; BP and BT.
By Katy Bergson, Brand Finance plc is an independent global business focused on advising strongly branded organisations on how to maximise value through effective management of their brands and intangible assets. Since it was founded in 1996, Brand Finance plc has performed thousands of branded business, brand and intangible asset valuations worth trillions of dollars. Its clients include international brand owners, tax authorities, IP lawyers and investment banks.