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Tickers in this Article: WPPGY, RIMM, AMZN, T, VOD, MCD, ING, GOOG, MSFT, KO, IBM
Advertising giant Millward Brown WPP (Nasdaq:WPPGY) produces an annual ranking of the 100 most valuable brands in the world. While similar to Interbrand's annual list, more emphasis is placed on the financial return, recognizing that intangible assets like trademarks, aren't just legal department afterthoughts but vital contributors to the bottom line. For those who feel brands are dying, think again. This report shows they are here to stay. Which begs the question: how much is your brand worth?

Growth Despite Poor Economy
The most amazing finding in this year's report is that the combined value of the Top 100 brands increased 1.7%, to $1.95 trillion. That's a testament to the bond companies have with their customers. Imagine growing in value at a time when the entire world is in the middle of the biggest recession since World War II.

People will forget a brand in dire times, unless they are constantly reminded why they were fans of your product or service in the first place. This report definitely bears this out. (In addition, companies that can afford to advertise in a recession can sometimes get a leg up on the competition, see Four Tips For Buying Stocks In a Recession for more.)

Top Brands U.S. by Growth

Company
Brand Value Growth
Market Cap (at July 6)
Blackberry/Research In Motion (Nasdaq:RIMM)
100%
$38.79 billion
Amazon.com (Nasdaq:AMZN)
85%
$33.57 billion
AT&T (NYSE:T)
67%
$146.32 billion
Vodafone (NYSE:VOD)
45%
$99.88 billion
McDonald\'s (NYSE:MCD)
34%
$59.58 billion
Winners and Losers
You would think that good news, like the kind in the table above, would send stock prices careening to the moon. Unfortunately, that's just not the case. For instance, Research in Motion, maker of the Blackberry, saw its stock price drop 39.4% in the past 52-weeks, 10% worse than the S&P 500, despite its brand value doubling during the year to $27.5 billion and jumping 35 places in the rankings from 51st to 16th. But it turns out that the biggest decline in brand value in the 2009 report was ING Group (NYSE:ING), the Dutch financial services giant, which lost 55% (ranking 93rd) of its brand value to $6.72 billion. That's a significant hit to its brand value. The stock is down $20 or 65% in the past year. That's a more typical reaction.

Top Brands in the U.S. by $

Company
Brand Value
Market Cap (at July 6)
Google (Nasdaq:GOOG)
$100.04 billion
$129.37 billion
Microsoft (Nasdaq:MSFT)
$76.25 billion
$206.83 billion
Coca-Cola (NYSE:KO)
$67.63 billion
$113.30 billion
IBM (NYSE:IBM)
$66.62 billion
$134.31 billion
McDonald\'s (NYSE:MCD)
$66.58 billion
$59.58 billion
Undervalued Brands
Looking at the table above, something really jumps out. McDonald's brand value is higher than its current market cap, and in terms of brand value growth, the company was up 34% in the latest report. In the past 52-weeks, its stock is flat, 29% better than the S&P 500 so it seems investors do sometimes pay attention to good news. The golden arches is one of the few restaurants doing well these days. If it keeps up the pace, it may even catch up to the world's number one brand, Google, worth slightly more than $100 billion.

The Bottom Line
Millward Brown did a survey in China that found people would rather buy less of a popular brand than trade down to a cheaper alternative. Brands reflect status. Don't be fooled by the short-term trend towards private label, as when the economy recovers, so too will our desire for our favorite brands. You can bet on it. (For more on the value of intangible assets, read The Hidden Value of Intangibles.)

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