The art of brand architecture - AND WHY CREATING MULTIPLE BRANDs IS OFTEN A BAD IDEA FOR CHANGEMAKERS
You’ve put your first brand on the map successfully, and your movement is growing steadily. Now, you’re creating an awesome new product or service - but it’s a little different than the first. Should you launch it under the umbrella of your existing brand, or would it make more sense to develop a new brand?
While you grow and learn as a brand builder, inevitably the question will arise: ‘Do we need to create a new brand for this?’
That question is a brand architecture question.
Before you pull the trigger on a decision, it’s important to understand that the consequences of your decisions will have a big impact on your available resources.
In this article we will unpack:
What is brand architecture
Why is brand architecture important
What are different types of brand architecture and what are the pros and cons of each
How do you choose the brand architecture that is right for you?
What is brand architecture?
Brand architecture is the structure of your portfolio of products and/or services into one brand, sub-brands, or multiple brands. The structure shows how the brands relate to each other.
Typically, there are four ways to structure a portfolio of products or services into a brand architecture. Branded house, house of brands (super confusing - yes), endorsed brands, and hybrid brands.
We’ll unpack each later in this article, below.
why is brand architecture important?
People use brands as a way to organize the world. They can distinguish one product from the other through a clear brand name, color code, differentiating app icon, visual style or unique website.
The purpose of a brand architecture is to make it easier for people to understand what you offer and if it is right for them. A confused audience is never going to engage with you, so a clear architecture is key.
Decisions about brand architecture can have massive consequences down the line, so it is extremely important that you take the time before you make any decisions.
Why do impact-driven organizations struggle with brand architecture?
When we think about how we could manage our brands, we often use giant commercial brands as examples.
It’s tempting to think:
“We are like Apple - and we should think of our products like they are in the App Store!”
“Google organises it’s services nicely into these sub-brands, so could we.”
“Coke endorses that bottled water brand with its familiar logo, that’s a stamp of approval system that we could use as well.”
Very few impact-driven organizations, movements, charities, and individuals have enough resources to divide their time, money and attention across multiple brands.
We also often don’t have enough brand strategy knowledge on our teams to understand the long-term consequences of these decisions. Without being able to understand the options and trade-offs, it is very hard to make an informed decision.
The options can feel overwhelming. People end up deciding the architecture on gut feeling.
Read on to understand your options and the trade-offs you will be making with each scenario.
What are different types of brand architecture?
Typically, there are four ways to structure a portfolio of products or services into a brand architecture.
House of brands, branded house (super confusing - yes), endorsed brands, and hybrid brands.
Each scenario comes with benefits and drawbacks. Your choice will be a tradeoff. It’s a matter of choosing what are the positives and negatives that suit your situation best.
We unpack each below.
House Of Brands
A house of brands is just like the title implies: it’s one structure filled with lots of different brands, each independent of each other.
Examples: Unilever (Dove, Lipton) META (facebook, instagram, whatsapp)
Benefits of a house of brands:
you can tailor each product to a unique audience and position it accordingly
the reputation of one brand is not influenced by the success or failure of another
Drawbacks of a house of brands:
you have to build each brand independently, which is costly
the investment in one brand does not spill over into the other.
Branded House
This term confusingly close to the house of brands, but the analogy holds up. Imagine a house with one big fat logo on the front. There are two options for a branded house.
Option #1: The monolith
Imagine a house with one single big logo on the front.
Examples: IKEA, TOMS, Etsy
Benefits of a branded house
all your brand building efforts build on each other, making it the most financially effective
Drawbacks of a branded house
the reputation of the main brand can be a blessing and a curse for new products or services
when the main brand reputation gets damaged or the positioning is not right for a new product or service, this will impact the success of new initiatives.
This is why many brands choose to spin of innovative, experimental or risky projects under other labels, to limit damage to the main brand. It’s true that this strategy removes some risk, but it also eliminates a benefit: if the project does become successful, it will also bring fewer good vibes to the main brand.
Option #2: Sub-brands
Here we also have the same house with a single entity, but with a number of rooms inside. Those rooms are sub-brands. Those sub-brands all have very strong visual and verbal ties to what’s on the building’s facade. The sub-brand structure is often used for different products or services, or different chapters or locations or chapters, Impact Hub and Oxfam are a good example.
Example: OXFAM, FedEx, Google (gmail, calendar, analytics, maps), Apple (iPad, iPhone, TV, WATCH)
Benefits of a branded house with sub-brands
the success of the main brand immediately gets connected to all other products or services
all your brand building efforts in the sub-brands accrue back up to your main brand
Drawbacks of a branded house with sub-brands
the trust and success (or lack thereof) of one brand will influence the others
the reputation and positioning of the main brand can hold you back if you’re creating more innovative and experimental work.
Many brands choose to spin of innovative, experimental or risky projects under other labels, to allow them more flexibility to position it to a new type of audience, and to limit damage to the main brand. It’s true that this strategy removes some risk, but it also eliminates a benefit: if the project does become successful, it will also bring fewer good vibes to the main brand.
Endorsed Brands
These are brands which literally get the stamp of approval from their big parent brands. You can recognise them by the presence of a parent company logo, or some version of the phrase “by”: “powered by”, “a company of”, etc.
365 is a good example of an endorsed brand. It is the private label of Whole Foods Market. It shares a lot of visual and personality traits of the main brand, but stands on its own. An example of an endorsed brand that is very different from its endorser is Coca Cola’s water brand Dasani.
Note that an endorsed brand only works when the endorser has a strong brand presence. A lot of small businesses have been jumping on the brand endorsement band wagon. Unfortunately, an organic underwear brand that creates an endorsement like “underlined – by Kathy” will only work if Kathy is well-known to her audience.
Example: Solar Turbines (a Caterpillar company), 365 by Whole Foods Market, Dasani by Coca Cola.
Benefits of an endorsed brand
you get the recognition from your parent brand
you get lots of freedom to go your own way
Drawbacks of an endorsed brand
reputational damage (which can move both ways)
an endorsement only works if the endorser has a high brand awareness.
Hybrid Brands
Wikimedia has a dozen different organisations in its portfolio. Each has their own name and visual identity, loosely gathered around ‘wiki’, and often (but not always) using the dark red and blue from the main brand, Wikipedia. Patagonia is another example of an organisation with a number of different companies within the patagonia portfolio, some of which are directly linked to the main brand, and others are not.
You will find many different structures besides the three we mentioned above. These are loosely called hybrid brands.
Not all hybrid brand structures were created consciously. As organizations grow, different chapters products or services develop different names and visualizations. When you base your decision on examples from the hybrid category, make sure you don’t follow a haphazard .
Example of a hybrid brand: Wikipedia (Wikimedia with several chapters, and other entities)
The Wikimedia team recently conducted a rigorous analysis of its brands, realising all the different labels where clouding the great work that the organisation is doing. They have opened up the work in an amazing report, which is (true to brand!) available publicly.
Benefits of hybrid brands
you can do whatever you want, for whatever works at that moment for specific products and services, branches or other initiatives.
Drawbacks of hybrid brands
overtime it can become super messy (just google Red Cross logo)
once you have made one exception to a rule, it is hard to explain to another country office, brand, initiative or project, why they can’t do the same
how do you choose a brand architecture?
Brand strategist Suzanne van Gompel
Now that you know about the different types of brand architecture and their trade-offs, you can see which scenario would work best for you.
However - that is a scenario that works for you in theory. The next step is whether it works in practice. Whether something works in practices is 100% dependent on the resources you have to put behind the choice.
We forget just how many resources big commercial companies have to manage multiple brands.
Here is a reality check: managing multiple brands is resource-draining. Imagine feeding two sets of social channels with content and needing to engage with people on both. Building and managing two websites. Creating and evolving two brand identities. Building press exposure for both. Etc. Etc.
Feeding more than one brand with budget, time, and headspace is something we should not take lightly.
In Brand The Change, the book, brand strategist Suzanne van Gompel explains: it is a matter of deciding how many brands you need versus how many brands you can feed.
The one question you need to ask yourself before creating multiple brands is: How many brands do you need - and how many brands can you feed?
So whenever you catch yourself or a colleague asking - “Should we create a new brand for this?”
The answer is ‘NO’, unless one of the following situations applies:
1. YOU HAVE WHAT IT TAKES TO MAKE ANOTHER BRAND TAKE OFF
Creating a new brand is one thing. Getting and keeping it on customers’ radar is quite another; it takes a lot of time, money and perseverance. The more limited your resources (budget, knowledgeable staff, time), the less advisable it is to launch a new brand.
2. YOUR CURRENT BRAND IS NOT CREDIBLE IN THE NEW MARKET SEGMENT/CATEGORY
McPizza might have sounded logical to the marketeers at McDonald’s (‘fast food is fast food’), but consumers preferred trusted, specialized pizzerias over burger joints. When Bic (‘disposable products’) launched disposable underwear, it flopped. The idea of buying intimate wear from a company that is known for pens failed to appeal to consumers
3. YOUR NEW PRODUCT SOMEHOW CONFLICTS WITH YOUR CURRENT BRAND
Harley-Davidson motorcycles (‘rebellious lifestyle’) damaged their credibility when they introduced a line of wine coolers in the mid-1980s. Hells Angels sipping wine? When Nivea (‘trusted skincare’) launched a makeup line it became a flop. In Nivea customers’ eyes, makeup and skincare were Incompatible.
4. THE (PRICE) POSITIONING OF YOUR EXISTING AND NEW PRODUCT ARE NOT COMPATIBLE
It’s not for nothing that Toyota (‘cheap, reliable cars’) launched its luxury car range under a new brand, Lexus, with great success.
5. YOUR EXISTING BRAND IS NOT CREDIBLE TO YOUR NEW TARGET AUDIENCE
The religious, old-fashioned image surrounding the Salvation Army is difficult for young people to connect with. When an idea was developed to create hip new clothes out of old second-hand clothes, it was launched under the brand name 50-50 Originals.
If the situations described above don’t apply to you, it most probably makes the most sense to launch your new product under your existing brand.
This is the most time- and cost-efficient way forward. It empowers you to leverage on the trust you have managed to build up with customers and to cross-sell your new product to your current client base and social followers. A trusted brand is a great launch pad.
The big takeaway
Think before you launch an additional brand. As long as there is a logical relationship or common denominator between different products or services in your portfolio, sticking to one brand is the best investment of your time, money and energy.
ARE YOU STRUGGLING WITH A BRAND ARCHITECTURE DECISION?
We created a model to help you make better choices. It’s called the Brand Architecture Decision Tree. Find it in Brand The Change, the guidebook.