Why the Alphabet 'house of brands' works for Google – but shouldn't be imitated by others
A brief comment from me has gone live this morning on the front page of The Drum. Here's a fuller version of my initial thoughts about Google Alphabet. Feel free to ask me anything in the comments.
Yes, it is the brand architecture move of the decade, and the memo announcing it is one of the best pieces of corporate communications I've ever come across.
No, I don't think the name's great.
No, not because of SEO. The domain is inspired, in fact, and the importance of a .com is overrated in the era of search engines, even more so when you're Google.
So, some thoughts focused on the branding perspective:
Alphabet isn’t by any means the greatest name they could come with, in fact, I think it's a slightly underwhelming choice. But that’s not what this move is about. While the opportunity for a more inspiring name may have been lost (the address, again, is brilliant, however) the truth is that any brand name is only as good as the context you build around it.
Brand names can, at most, start as good. Very few can start as great. Could Orange have been Purple? Was it such a successful name if it wasn't for the full brand platform around it? And now that it's not as prominent a telecom brand as it once was, does it feel duller? Could Mercedes been Adrienne or Ramona (other names of the same woman)?
Alphabet will have to be managed and developed like any other brand, but as halo effects go, having brands like Google and YouTube in its stable, is a pretty unparalleled leg up…
That they chose to brand it Alphabet, rather than any endorsed creation, say 'Google holdings', 'Google Enterprises' or 'Planet Google' is an indication of the level of risk they intend to take with their increasingly diversified ventures. This will protect their core business and established brands from any failures (e.g. Google Wave and Google Plus both introduced a measure of negative impact on the Google brand, but what if they were simply ‘Wave’ and ‘Plus’?). It will also open the way for them to own more successful stand-alone brands, such as YouTube.
Investors, who have a more rational focus, will quickly adjust to the change, and will watch all activities under Alphabet critically and hopefully get the promised greater transparency. On a branding level, the new brand architecture will help them to conceptually keep failures at their right scale. Keeping the faith more easily in face of failed investment thanks to the more successful brands in the overall system.
One last thing – I do hope this will not give other companies the idea they can spin-off any new product or offering into a new brand under a 'house of brands' structure. Creating dozens of sub-brands isn't sustainable for most master brands. Over the last decades even the most diversified companies (Unilever, Nestle, P&G, 3M...) have rationalised and refocused their brand portfolios. But stories of brand consolidation aren't as sexy as this one.
This solution is more appropriate for something at Google’s scale, and how many of those do we even have on this planet?