As he retires after a decorated career in the advertising industry, Hamish Pringle's final column reminds us of the importance of making sure that your brand architecture is keeping up with your business objectives.
Google is a clever company and does a lot of things very well. One of them is managing its brand architecture. Most commentators were wrong-footed when in April 2015 Alphabet was announced as its new holding company.
Google realised that its main brand sharing the same name as its holding company could lead to a scenario under which its new ventures, many of which might be seen by Wall Street as speculative, could affect adversely Google’s rating. The immediate reaction was positive with the share price jumping 6.5 per cent. Interestingly, it kept YouTube and Android, major brands in their own right, as subsidiaries of Google Inc. This could be running a risk for YouTube as Google Search and Android are subject to EU anti-trust actions.
There are four main brand architectures to consider. They range along a spectrum from one end, where the corporation stands behind operating companies which offer a range of different products or services under individual distinctive brands, to the other end where the company is itself the brand. It’s important to be conscious of these options and brand managers need to review their chosen architecture annually, and more frequently if there are active new products and services pipeline.
First, there is the ‘multi corporation’ scenario which Google has adopted. Here the corporation is the umbrella organisation, often a publicly quoted plc, beneath which subsidiary companies operate, which are usually unlisted. These in turn market their brands to customers.
One of the attractions of this structure is the high degree of insulation between the front line brands and the quoted holding corporation two levels above it: Alphabet – Google Inc. – YouTube. In some instances companies which have suffered from negative publicity concerning one of their operating companies of the same name, have changed the holding company identity to create some 'distance' between them. Woolworth changing to Kingfisher, and Saatchi & Saatchi to Cordiant (and back again) are examples of this strategy.
Secondly, there is the ‘house company’ architecture where the business markets a series of product or service brands, under separate identities and names, which bear no relation to the company itself, but where its name or logo is used as a 'house' endorsement.
Interestingly, Unilever announced in 2004 that it would be aligning behind an over-arching ‘vitality’ positioning and new logo. In effect they migrated the business from the ‘Multi corporation’ to ‘House company’ architecture. Unilever’s then Chairman, Antony Burgmans, declared that by 2005 all subsidiary companies would adopt the Unilever name, using it on corporate literature and signage, and that over subsequent years it would also appear on all product packaging. According to Burgmans:
“Consumers and stakeholders will find it easier to see who Unilever is and what it does. Our goal is to strengthen Unilever’s business and reputation, so that both Unilever and its brands are better understood and trusted throughout the world”.
The ‘house company’ architecture is quite common with PLCs preferring to remain relatively anonymous to end-users of their brands while marketing the company to investors and stock exchanges. A typical example is Pfizer with its plethora of brands, both OTC and POP, including Listerine, Rolaids, Sudafed, Zoloft, Lipitor, and Viagra.
Usually these 'house' names are featured in a subsidiary manner on packaging and in advertising, with the main brand identity to the fore. The cumulative effect of billions of exposures adds up to a valuable reputation for quality, assuming of course that the individual brand performance is good. Eventually the house name can become a brand in its own right and can be a very effective endorsement, especially in assisting the launch of new products.
Thirdly, there is the case where the corporation is effectively the brand and sells a product range, which is marketed under the same identity, but with sub-brands used to distinguish particular lines.
A long-standing example of such a brand architecture is that of Virgin with its plethora of sub-brand extensions. These are often franchised, and occur across disparate markets, from Virgin Atlantic and Virgin Trains, to Virgin Mobile and Virgin Finance.
Having liberated itself from the sector constraint of its original brand name UberCab, Uber is now following the ‘uni-corporation architecture’. It's testing a series of Uber brands including UberFresh (food), UberRush (parcel delivery), UberEssentials (everyday items), UberPool (shared cab) and UberBoat (water taxi). The use of the Uber prefix plus sector suffix helps communicate each proposition, and this is a cost-effective way to bring new services to market. The risk is that one or other of these fails and reflects badly on the Uber brand. Sony Walkman’s demise, following its massive success, tarnished the Sony brand and it has struggled to recover since.
Fourthly, there is the instance where the corporation is the brand and where it is hard to discern much more than relatively generic descriptors for the products or services it provides to its customers. Examples occur across market categories, such as Pizza Express, Orange, or BP.
Keeping existing brand architecture under review is good housekeeping. The way a brand is structured can often shape its future success and journey, reviewing and adapting is important for any brand. But for new companies it’s crucial to think ahead and envisage how the business will develop so that the chosen model will accommodate its future shape and face to customers.
Hamish Pringle's career has spanned senior roles at some of the most familiar names in advertising, including AMV BBDO, Leagas Delaney and Saatchi & Saatchi. After a 10 year tenure as director general of the IPA, he was latterly strategic advisor to 23red. You can read Hamish's archive of columns dating back to February 2014 here.
We would like to put on record our thanks to Hamish for his contribution to the industry and The Drum and wish him well in his future endeavours.