The document discusses the importance of brand architecture for companies adapting to a rapidly changing market environment. It outlines two main strategies: 'branded house,' where multiple products share a central brand, and 'house of brands,' where brands operate independently under a parent company. The right brand architecture is crucial for businesses to remain relevant and agile amid ongoing disruptions.

1. GET BRAND SMART
The Power of Brand
Architecture

2. GET BRAND SMART
The Power of Brand Architecture
The world today is in a constant state of flux, with change and disruption arguably the
new normal. In this context, companies are having to adapt their products, services,
brands and business models on a near continuous basis, to keep up with competitors and
with consumer trends and demands. Brands are going through the process of ensuring
their offering is as relevant as possible for today’s high-demand environment, while
anticipating that this will likely only evolve again in a future that is subject to many forces
that are beyond their control.
Companies around the world are embarking on various strategies to prepare their
business for a future of continued disruption. For instance, we have seen a raft of mergers
across industries – mergers are likely to reach an all-time high this year1
- with many
companies seeing a benefit in increasing their scale.
But companies must also prepare their brands for the future; this context means it is more
important than ever for brands to revisit their brand architecture, described by Marketing
Week columnist Mark Ritson as:
“Brand architecture is without doubt the most important and
yet most underestimated concept in branding… The number
of brands a company chooses to offer and the manner in
which these brands are linked to each other, or judiciously
kept apart, in the mind of the target consumer falls under the
weighty topic of brand architecture.”2
The right brand architecture strategy is key to clarifying the position of the business
today, and building a strong foundation for acting in an agile and responsive manner to
future proof the business longer-term.
Brand architecture strategies can roughly be divided into two types – although the way
each brand organizes its portfolio arguably is and should be unique. This week, we look at
the most common brand architecture strategies, and how brands are using them today.
1
https://money.cnn.com/2018/05/24/investing/merger-boom/index.html
2
https://www.marketingweek.com/2018/05/02/mark-ritson-asda-sainsburys-merger-brand-architecture/

3. GET BRAND SMART
The Power of Brand Architecture
BRANDED HOUSE
Branded houses see all brands anchored by a central brand. This creates a simple, easy to
understand structure, which often results in lower marketing budgets as you only support
one brand.
In recent years, we have seen many large brands exploring more complex brand
architectures and simplifying back to the basics. Google, for instance, is simplifying the
brands that sit under it, just three years after it last rearranged to sit under Alphabet. In
2018 Google Ads is replacing Adwords (the advertising system that monetises searches)
and Double Click (the software that tracks ads and their engagement) is becoming part of
Google Marketing Platform and Google Ad Manager. These new identities arguably just
describe the services, allowing Google to become the sole brand.
However, true monolithic brands – in which the main brand is used across multiple
products – are often difficult to maintain when brand portfolios become more complex.
As a result, branded houses today tend to involve several layers, which may use endorsed
brands (in which brands have their own personality with some element that adds
reassurance from the masterbrand, for instance a large proportion of Apple’s portfolio –
iPhone, iTunes, iCloud) and/or sub-brands (which clearly anchor off the masterbrand, like
Apple Pay). A branded house can allow a company to appeal to multiple audiences via the
various brands, but it is also possible to deliver universal messages which have an impact
on every sub-brand, product or service that the brand endorses.
This simpler brand structure does however come with risks and challenges; all sub-brands
must keep up with the masterbrand’s high standards. If there is an issue with one brand, it
can damage the reputation of the portfolio.
But for some brands, this risk is the right one to take. For instance, Apple made an
interesting move launching Apple Pay as a sub-brand rather than an endorsed brand;
Apple has always been very protective of its brand experience across its portfolio, and it
has less control over the whole of the Apple Pay experience as it has to work with other
brands to provide the service. At the same time, as digital payments are new to most
users, they require a lot of trust in the brand they are using, so the payments brand
benefits from the strength of the Apple brand.
HOUSE OF BRANDS
In a house of brands, many brands exist that are not obviously tied to the parent company
– for instance, Procter & Gamble and Bacardi operate houses of brands, with portfolios of

4. GET BRAND SMART
The Power of Brand Architecture
brands that many consumers are unaware are owned by the same company. While this
model gives you ultimate flexibility and can increase reach, it is often expensive to
maintain as each brand needs distinct marketing and communications strategies.
We may start to see more houses of brands in the near future, as mergers and acquisitions
often result in a house of brands in the short-term. The merged brands can each be
maintained as a house of brands, particularly if both brands have a lot of value or
disparate target audiences; if this is not the case, the business must make the difficult
decision to remove one or even both brands, rebranding the new-look business to make
the most of current market forces.
P&G is often held up as the best-case example of a house of brands. However, it has taken
the unusual move of starting to build awareness of the corporate brand among consumers
over the past six years, beginning with its 2012 Olympics campaign "Proud Sponsor of
Moms” which increased familiarity with the P&G brand by 22%, leading to delivered
$200MM+ incremental sales3
. Since the success of this campaign, P&G has launched other
cross-portfolio campaigns, such as it’s ‘My Black is Beautiful’ initiative, which re-launched
this year with a campaign created by BBDO New York. In promoting it’s masterbrand,
P&G can hope to improve the perceptions of the rest of its house of brands – a benefit we
normally only see on more clearly anchored branded houses.
CHOSING THE RIGHT ARCHITECTURE FOR YOUR BRAND
There are many stages to go through in deciding how best to arrange your portfolio of
brands. Companies must balance an understanding of the consumer with a fresh look at
their business realities; only then can they consider any brands they have or are
considering developing, to decide how they fit might best fit together. As the external
context and the businesses themselves evolve, these questions need to be regularly
revisited to adjust brand architecture to the changing consumer needs, business reality
and growth strategy.
Brand architecture is not an exact science, and best-practice examples are constantly
evolving. Nevertheless, these brand architecture models act as a good basis, a strong
guide for brands to experiment from. Their future is reliant on it.
3
Warc – P&G Proud Sponsor of Mom

5. GET BRAND SMART
The Power of Brand Architecture
If you are interested in learning more about the subject of this article, please contact
Sarah Emmerson, Insights Planner, emmersons@bbdoknows.com
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