Instead of paring down “house of brands,” Google is building a bigger house
Google’s move to restructure its company, and its brands, is yet another example of how Silicon Valley seems to be rewriting every rule.
The conventional brand wisdom has been simple and seemingly powerful: Build a strong parent brand, invest behind it, and use it with zeal across every audience — employees, investors, customers. Yes, there are many “house-of-brands” strategies, but the trend to build a single, strong parent has been robust and growing, fueled by today’s purpose-driven “human era” culture. Simple brand systems. One singular message.
Companies have increasingly been paring back brands, folding in acquired brands quickly and elevating the corporate purpose as the great uniter. Just two weeks ago, P&G announced it is shedding half its brands. Even the parents of “houses of brands,” such as Unilever, have been growing their prominence through increased endorsement roles and media spend. And technology has been no different — the “keep-it-simple” approach has been the hallmark of innovation leaders lauded by business school faculties for decades. The 3Ms, GEs and IBMs of the worlds have all shown how to successfully manage families of inventive businesses under one strong parent.
But no, not Google! Enter Alphabet and a growing — not shrinking — portfolio of brands. This is almost certainly the biggest brand launch of the year (the decade?), with a distinct parent brand idea bold enough to sit atop Google. One could view this week’s announcement as essentially focusing, containing and, yes, even limiting one of the world’s most powerful brands, saying it isn’t big enough for its ambition to be the name of the company. Alphabet’s entrance provides a new company structure that makes room for many brands without zeroing in on one.
Far be it for Silicon Valley to follow the rules.
Days ago, Netflix again rewrote HR rules with its groundbreaking unlimited leave policy, causing head-scratching about how to make this work among HR professionlas the world over. Uber rewrote the hiring rules, sustaining a $50 billion market cap with few on the payroll, so far. And, granted, a little farther north, Amazon keeps doing it with the supply chain — installing delivery lockers in 7-Elevens, sending products before they are even ordered, and maybe even using drones. This is the way of the Valley.
So will Google do the same for brand strategy? Will we see the trend reverse and witness the dawn of a new age of hatching new brands? Will our fears over the complexity and expense of multibrand systems be eclipsed by a sense of opportunity? Will Sand Hill Road’s energy of freedom and invention infiltrate Madison Avenue?
To show us the way, Google will be answering some new questions: What will Alphabet stand for? How can a brand whose sole purpose is to be a “corporate” parent encapsulate the “anticorporate” vibe of its inventive family? Can a complex system be managed in a way that creates value? Can the Google brand maintain its quirky personality while focusing largely on the predictable scale search business?
Google will no doubt address these questions. But will it change the rules? The answer is probably no, at least not for everyone. Not everyone has this DNA: the inventiveness, the resources and the sheer moxie to forge such a path.
Regardless, the answer may be inspiring. Google may show us that the path is not neat or structured or simple; that brands are living, breathing organisms, not something you stamp on a logo and protect and shelter. And in breaking these rules, Google may preserve the most important branding rule of all — be true to yourself.
Article originally published in AdvertisingAge on August 13, 2015.