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Section 04 | Resources
Valuation Methodology



BrandZM Brand Valuation


Methodology



Consumer research and inancial rigor make BrandZM 

the deinitive valuation tool







The valuation process
Step 2: Calculating 
Why BrandZM is the
The brands that appear in this report are At the heart of a brand’s value is its 
the most valuable in the world. They were ability to appeal to relevant customers Brand Contribution
deinitive Brand
selected for inclusion in the BrandZM and potential customers. BrandZM Step 1: Calculating 

valuation methodology
Most Valuable Global Brands Top 100 and uniquely measures this appeal and Financial Value
We now have the value of the branded 
category rankings based on the unique validates it against actual sales business as a proportion of the total 
and objective BrandZM brand valuation performance. Brands that succeed in 
All brand valuation methodologies are similar – methodology that combines extensive creating the greatest attraction power Part A We start with the corporation. In value of the corporation. But this 
up to a point.
and on-going consumer research with are those that are:
some cases, a corporation owns only one branded business value is still not quite 
the core that we are after. To arrive at 
rigorous inancial analysis.
brand. All Corporate Earnings come from Brand Value, we need to peel away a few 
All methodologies use inancial research and Meaningful
that brand. In other cases, a corporation more layers, such as the rational factors 
sophisticated mathematical formulas to calculate The BrandZM valuation methodology owns many brands. And we need to 
current and future earnings that can be attributed can be uniquely distinguished from its In any category, these brands appeal apportion the earnings of the corporation that inluence the value of the branded 
directly to a brand rather than to the corporation. This competitors by the way we obtain more, generate greater “love” and meet across a portfolio of brands.
business, for example: price, convenience, 
exercise produces an important but incomplete picture.
consumer viewpoints. We conduct the individual’s expectations and needs.
availability and distribution.

worldwide, on-going, in-depth To make sure we attribute the correct Because a brand exists in the mind of the 
What’s missing? The picture of the brand at this point quantitative consumer research, and Different
portion of Corporate Earnings to each consumer, we have to assess the brand’s 
lacks input from the people whose opinions are most build up a global picture of brands on
brand, we analyze inancial information 
important – the consumer. This is where the BrandZM a category-by-category and country-by- These brands are unique in a positive way from annual reports and other sources, uniqueness and its ability to stand out 
methodology and the methodologies of our competitors country basis.
and “set the trends,” staying ahead of the such as Kantar Worldpanel and Kantar from the crowd, generate desire and 
cultivate loyalty. We call this unique role 
part company.
curve for the beneit of the consumer.
Retail. This analysis yields a metric we call played by brand, Brand Contribution.
Our research covers two million the Attribution Rate.
How does the competition consumers and more than 10,000 
different brands in over 30 countries. Salient
We multiply Corporate Earnings by the Here’s what makes BrandZM so unique 
determine the consumer view?
This intensive, in-market consumer They come spontaneously to mind as the Attribution Rate to arrive at Branded and important. BrandZM is the only brand 
valuation methodology that obtains this 
research differentiates the BrandZM brand of choice for key needs.
Earnings, the amount of Corporate customer viewpoint by conducting 
Interbrand derives the consumer point of view from methodology from competitors that rely Earnings attributed to a particular brand. worldwide on-going, in-depth 
panels of experts who contribute their opinions. The only on a panel of “experts” or purely If the Attribution Rate of a brand is 50 
Brand Finance methodology employees a complicated inancial and market desk research.
Importance of brand valuation
percent, for example, then half the quantitative consumer research, online 
accounting method called Royalty Relief Valuation.
Brand valuation is a metric that quantiies Corporate Earnings are identiied as and face-to-face, building up a global 
Before reviewing the details of this the worth of these powerful but coming from that brand.
picture of brands on a category-by- 
category and country-by-country basis. 
Why is the BrandZM methodology, consider these three intangible corporate assets. It enables Our research now covers over two million 
methodology superior?
fundamental questions: why is brand brand owners, the investment community Part B What happened in the past or consumers and more than 10,000 
important; why is brand valuation and others to evaluate and compare even what’s happening today is less 
important; and what makes BrandZM brands and make faster and better- important than the prospects for future different brands in over 30 countries.
BrandZM goes much further. Once we have the the deinitive brand valuation tool?
informed decisions.
earnings. Predicting future earnings 
Step 3: Calculating 
important, but incomplete, inancial picture of the requires adding another component to 
brand, we communicate with consumers – constantly. Importance of brand
Distinction of BrandZM
our BrandZM formula. This component Brand Value
Our on-going, in-depth quantitative research includes assesses future earnings prospects as a 
two million consumers and more than 10,000 brands in Brands embody a core promise of values BrandZM is the only brand valuation tool multiple of current earnings. We call this 
over 30 countries.
and beneits consistently delivered. that peels away all of the inancial and component the Brand Multiple. It’s similar Now we take the Financial Value and 
multiply it by Brand Contribution, which 
Brands provide clarity and guidance
other components of brand value and to the calculation used by inancial is expressed as a percentage of Financial 
What’s the BrandZM beneit?
for choices made by companies, gets to the core – how much brand alone analysts to determine the market value of Value. The result is Brand Value. Brand 
consumers, investors and others contributes to corporate value. This core, stocks (Example: 6X earnings or 12X 
stakeholders. Brands provide the what we call Brand Contribution, earnings). Information supplied by Value is the dollar amount a brand 
The BrandZM methodology produces important beneits signposts we need to navigate the differentiates BrandZM.
Bloomberg data helps us calculate a contributes to the overall value of a 
for two broad audiences.
corporation. Isolating and measuring this 
consumer and B2B landscapes.
Brand Multiple. We take the Branded intangible asset reveals an additional 
– Members of the inancial community – including Earnings and multiply that number by the source of shareholder value that 
analysts, shareholders, investors and CEOs – depend Brand Multiple to arrive at what we call otherwise would not exist.
Financial Value.
on BrandZM for the most reliable and accurate brand 
value information available.

– Brand owners turn to BrandZM to more deeply 
understand the causal links between brand strength, 

sales and proits and to translate those insights into 
strategies for building brand equity.




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