A brand is defined as a distinguishing symbol, mark, logo, name, word, sentence or a combination of all of the above that companies use to distinguish their product from others in the market. A trademark or trade name are similar terms that describe how a company reaches out to customers and wants to be identified. It turns out that the brands of some of the most successful companies in the world have significant value in the billions of dollars. In other words, brands matter for both their look and value to the underlying firm.

The Look of a Brand

Ideally, a brand will be noticeable and evoke a particular emotion in the mind of the customer. A brand or logo could simply catch the attention of a passerby and nudge him or her to enter a store and make a purchase. Over time, brands can earn value and come to represent a company’s qualities and ethics in the mind of consumers.

How to Value a Brand

Brands, which qualify as intangible assets, do have dollar values. For global companies, these can easily run into the tens of billions of dollars. The full value of a ubiquitous brand, like Coca-Cola or Apple, will not be properly reflected the company balance sheet. This is primarily because accounting conventions emphasize historical cost over the market value for most intangible assets (like the brand). A widely used method for putting a dollar value on a brand is to estimate a royalty cost that a company would have to pay for the right to use the brand. Of course, there is much more to a brand than just its dollar value. Interbrand, which is mentioned in further detail below, analyzes more qualitative factors such as the role of the brand (for example, whether it is attached to a specific product, service, or company in general), as well as brand strength, which covers things as to how well the brand is identified across the world and how this helps the company rack up sales.

The Most Valuable Brands

Many marketing firms and market-research organizations, like BrandFinance and Interbrand for example, rank brand values every year. Interbrand recently released their 2017 ranking of the most valuable brands in the world.

Rank Company

Dollar Value in Billions

1 Apple Inc (AAPL) $184.2 billion
2 Google Inc (GOOG) $141.7 billion
3 Microsoft Corp (MSFT) $80 billion
4 The Coca-Cola Co (KO) $69.7 billion
5

Amazon.com Inc (AMZN)

$64.8 billion
6 Samsung $56.2 billion
7 Toyota Motor Corp (TM) $50.3 billion
8 Facebook, Inc. (FB) $48.2 billion
9 Mercedes Benz $47.8 billion
10 IBM (IBM) $46.8 billion
Source: Interbrand Best Global Brands 2017

The Apple Inc. (AAPL) brand (with its ubiquitous half-eaten apple logo) is by far the most valuable at $184.2 billion, a 3 percent increase over the previous year. Apple’s logo helps consumers identify its computers, tablets, and mobile phones. Google Inc (GOOG) claims the second place, with an estimated brand value of $141.7 billion, a 6 percent growth from 2016. In third comes another techie, Microsoft Corp (MSFT) with an $80 billion brand value, an impressive 20% increase from the previous year.

Tech companies dominate the top 10 most valuable brand lists and demonstrate the power of the Internet. Only three companies in the top ten are not tech companies — The Coca-Cola Co (KO), Samsung and Mercedes Benz. Each of these brands is worth in excess of $47 billion.

New entrants to the top 100 list includes Netflix, Inc. (NFLX) on 78th place worth $5.6 billion, Salesforce.com Inc. (CRM) on 84th place worth $5.2 billion and Ferrari on 88th place worth $4.9 billion.

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