How much is a brand worth? Methodology used to determine top and trending brands

The question of estimating a brand value has received a substantial debate over the last decades resulting in over 23 different methodologies being developed (1). Each of these methodological approaches has its advantages and disadvantages, and truth be told, there is no perfect way of determining a brand value in a reliable manner. This article thereby aims to outline and rationalise our approach towards estimating brand value that was used to define the top and trending brands for individual industry sectors.

By

Igor Demcak

One of the most renown brand valuation techniques has been developed by Interbrand (2) and is currently used to rank most valuable brands on a global scale. This model is based on three principal attributes, namely financial power, brand role in buying decision of consumers and the probabilities of obtaining ongoing and future revenues generated by the brand. A significant shift in the estimation of brand value emerged with the growing popularity of social media, taking the form of considering number of followers as the primary predictor of a brand value. This body of research however revealed substantial variations in the value of “likes” or followers, ranging from 21 cents to $214.81 (3). The critics of this approach went even further, arguing that followers on social media merely represent potential energy that needs to be valorised through engagement strategies (4).

Our approach towards determining brand value is based on a combination of aforementioned techniques, recognising the differences in brand perceptions between individual industry-sectors. A composite index based on the financial power, social media engagement and additional attributes has been developed. The scoring system is based on the outcomes of a survey used to determine the perceived importance of brand for individual sectors. Its summary is presented below, providing an overview of the methodology used to define the top brands for individual industry sectors.

Fashion: Financial power (72%), Social media popularity and engagement (28%)

Startup: Financial power (* determined as funding raised; 76%), Social media popularity and engagement (24%)

Software: Financial power (62%), Social media popularity and engagement (38%)

Food & drink: Financial power (73%), Social media popularity and engagement (27%)

E-commerce: Financial power (70%), Social media popularity and engagement (30%)

Eco: Financial power (66%), Social media popularity and engagement (34%)

Media: Financial power (57%), Social media popularity and engagement (43%)

Music: Number of subscribers and sold records (100%)

Furniture: Financial power (79%), Social media popularity and engagement (21%)

Pharmaceuticals: Financial power (78%), Social media popularity and engagement (22%)

Youtubers: Number of subscribers and video views (100%)

Cosmetics: Financial power (82%), Social media popularity and engagement (18%)

Construction: Financial power (77%), Social media popularity and engagement (23%)

Education: Financial power (62%), Social media popularity and engagement (38%)

Real estate: Financial power (81%), Social media popularity and engagement (19%)

Supplements: Financial power (74%), Social media popularity and engagement (26%)

Engineering: Financial power (68%), Social media popularity and engagement (32%)

PC games: Financial power (65%), Social media popularity and engagement (35%)

Jewellery: Financial power (81%), Social media popularity and engagement (19%)

Advertising: Financial power (71%), Social media popularity and engagement (29%)

Our approach towards determining the trending brands is based on the 3-month change in the attributes depicted in above. This way, we were able to identify the brands whose gains in financial power and  popularity on social media increased in the most substantial way, providing the basis for the list of trending brands for individual industry sectors.


(1) Salinas, G. and Ambler, T. (2009), “A taxonomy of brand valuation practice: Methodologies and purposes”, Journal of Brand Management, 17(1), 39-61

(2) Interbrand (2020), “Best global brands 2020: Methodology”, available from: https://interbrand.com/thinking/best-global-brands-2020-methodology/ [accessed 10/12/2020]

(3) Edwards, J. (2013), “What is a Facebook ‘like’ actually worth in dollars?”, Business Insider, available from: https://www.businessinsider.com/what-is-a-facebook-like-actually-worth-in-dollars-2013-3 [accessed 10/12/2020]

(4) John, L. K., Mochon, D., Emrich, O. and Schwartz, J. (2017), “What’s the value of a like?”, Harvard Business Review, March-April, available from: https://hbr.org/2017/03/whats-the-value-of-a-like [accessed 10/12/2020]

Igor Demcak

Igor Demcak

Trademark Attorney

Filed over 150 trademarks as a trademark attorney

UPJS Kosice

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