While it’s no longer headlines, the recent Google announcement regarding the creation of Alphabet has set forth a flurry of opinions. Often companies relegate brand to just a logo or a name, but the Google brand is larger than the company and because of that, it’s going to be very difficult to establish Alphabet as independent of Google, here’s why.
A restructured business innately births a revised brand architecture strategy. Until now, Google was organized using a hybrid architecture composed of a “branded house” strategy (where they have used their Google corporate brand across a broad range of products, such as Google Glass and Google Play) and a “house of brands” strategy (where they assembled a portfolio of different brands in which the Google brand is not present, such as with Nest, Fiber, etc).
The new architecture is a pure “house of brands” strategy. Alphabet is the silent holding company with no products or services of its own and is intended to serve as an umbrella brand over a diverse portfolio of individual brands. According to a recent HBR article, the plan is for the brand to be in the background to the individual brands making up the portfolio, although it could be used, if desired, as an implicit or explicit endorser brand. However, its important for the Alphabet brand to differentiate from Google in order for this to be effective.
When a brand as recognizable as Google restructures, it usually aims to take advantage of pre-existing brand equity by expanding upon that brand’s product offerings. For example, after Xerox’s acquisition of ACS, Inc., an information technology and business services company, it launched the campaign, “Made Simple by Xerox” to play off the brand equity of Xerox and introduce the newly restructured company in a fresh, engaging way. Google, however, has intentionally taken an untraditional approach to reorganizing the business and launching the new brand. Larry Page, Google’s Co-Founder and Alphabet’s CEO writes, ”We are still trying to do things other people think are crazy but we are super excited about,” acknowledging that they are taking the path less traveled and giving a nod to Google’s esteem for innovation.
It’s easy to see why companies so often leverage existing brand equity to expand. Alphabet faces a major challenge straight out of the gate: getting out of Google’s shadow. Page writes, “we are not intending [Alphabet] to be a big consumer brand—the whole point is that Alphabet companies should have independence and develop their own brands.” However, instead of existing almost as an anti-brand, as his words imply, Alphabet is already starting to look and feel a lot like Google.
Alphabet’s very “Google-like” launch did little to help differentiate it from the powerful master brand. Take the landing page for example. The word “Google” is so dominant, the Alphabet logo is barely noticeable at first glance.
In addition to a visual differentiation, Alphabet must build its own trust and credibility to empower subsidiaries and rally investors. Without doing this, Alphabet will not only fall short in being the authority of technology, but also runs the risk of being at the mercy of the Google brand. Right now the new brand is benefiting from positive associations, but what happens if Google has a crisis? Negative stories have already tied Google to unauthorized data sharing and security breaches. An affiliation too close to Google puts Alphabet at risk of taking on negative connotations that may or may not be appropriate for the corporate brand and may ultimately impact on the bottom line.
Taking brand implications into account when restructuring a business is not only smart, but also necessary. Aligning the business and brand strategy is vital to Alphabet’s – and any parent company’s – success. If the brand is set up to strictly be a silent holding company, it should walk the walk and make a concerted effort to get out of Google’s shadow. Differentiating from one of the most recognizable brands on Earth will be a major challenge, but is critical for Alphabet in order for it to be seen as the separate, parent brand it is intended to be.