How the business proposes to optimally manage and extract value from its portfolio of brand relationships will need to be defined and consistently executed.

The role of Brand Architecture in delivering Business Strategy

The task can become even more challenging if the business unit(s) operate across different imperatives such as ‘Core Vs. Growth’, ‘Domestic Vs. International’ and ‘Traditional Vs. Adjacent’ categories.

There may also be a requirement to connect brand architecture strategy with wider imperatives in the business strategy such as driving ‘Organisational simplification’, ‘Improving customer-centricity’ and ‘Delivering cost savings’.

In such complex strategic environments, significant qualitative and quantitative assessment of brand relationships, followed by careful strategic judgement around their retention, placement or retirement, will be necessary to ensure brand architecture value is optimized (and respected by the Business Units).

A Case Study: Telstra

In 2015, we were commissioned by Telstra to deliver brand valuation and contribution analysis to assess the risks and opportunities of allowing a freestanding brand to enter a Masterbrand dominant brand portfolio.

In this case, integrating the freestanding brand was proposed by business unit executives who were leading an important growth program within the wider business strategy. This was in the context of questions raised by other executives on the Masterbrand’s capability to stretch into their growth markets. The related pros and cons of running a Multibrand vs. Masterbrand strategy were also in need of clarification as the business extended from its core.

Three main questions needed to be answered:

1. Would the organization be making the right decision if it rebranded a large freestanding legacy brand to an unknown Masterbrand?
2. Should the business refresh and relaunch the same legacy brand to fulfil the needs of the growing business unit i.e. not use the Masterbrand?
3. And finally, should a completely new brand be developed as an alternative to option 1 and 2?

To answer these questions we performed analysis using the following brand valuation and business valuation methodologies: discount cash flow modelling, and performance modelling by business segment; Media spend and business uplift calculations; and wider business halo uplift calculations

The recommendation concluded that the use of the Masterbrand would boost the most overall business growth while retaining the growth benefits of the individual business unit. The recommendation was taken into the business, debated and ultimately activated.

The potential of brand licensing program can also be a compelling proposition for firm brand architecture policy. Especially if a business is pursuing a growth strategy (e.g. into new geography, adjacent and non adjacent categories), but is limited in the ability to carry that initiative out to completion.

Virgin and Vodafone

Virgin and its relationship with licensing partners are the apex example of a successful brand licensing program. The Virgin Group business has no or limited ownership of the underlying companies it partners with, but offers the value and benefits of its brand to partner businesses for a fee. Such an agreement offers branded business value growth opportunity to both organisations. Maximising the returns you can make while maintaining brand strength in your core segments requires a Branded Business Value approach to Brand Licensing.

In 2007/8 the Vodafone business set an ambition to expand its global footprint while still maximising returns which included the extensive use of licensing. We were commissioned to examine Vodafone’s franchising and licensing strategies as well as their brand architecture. This involved appraising Vodafone’s licensing strategy (current + prospective), reviewing their trademark licensing and brand management, and formulating royalty rate mechanics for different brand architecture approaches.

Over the years we have worked with Vodafone on over 20 strategic projects - including brand licensing - and have helped the brand move from small geographic player to becoming one of the most valuable global brands. 

A brand architecture initiative does not have to be a reactive measure to deliver a pre-existing business strategy, or boost synergies within a business, it can be proactive tool to guiding businesses to new growth opportunities.

An organisation's brand architecture is a complex system and a delivery tool for optimising efficiencies and driving business growth. The key variables at play here, are total top-down buy-in, and backing final strategic decisions on brand architecture with solid data and robust analysis.

LEARN: Brand Architecture 101

10 Tips to Inform a Successful Brand Architecture Strategy
What Brand Architecture Strategy is Right for My Business?

Internal politics is one of the hardest hurdles for any shift in brand architecture strategy, and just because a brand portfolio is bloated, it does not mean that there is an excess of dud brands that can simply be cut and forgotten forever.

Marketers are the most fervent guards and caretakers of brands, especially those they have helped to build. Bias inevitably creeps in, and understandably so, it is hard to let go of a brand that has taken years to develop, even if it is hindering the long-term growth of the business. This conversation only gets messier when two brands in a portfolio have similar offerings, are of roughly equal size, and in some cases previous to the merger were competitors¹.

A brand portfolio audit will come often hot on the heels of a macro investment, cost-saving initiative, or strategic change in the business; i.e. mergers with or acquisitions of brands with similar offerings, a strategic shutting down, or reorganisation of existing product/service lines.

Making an objective business case for a brand architecture strategy that is rooted in hard data, and prioritises business growth, will ground the conversation, and allow for macro decisions to be enacted with confidence.

Here are 10 tips to help guide the conversation from subjective to informed.

1. Don't get lost in the weeds.

A good brand architecture strategy all ties back to the growth of branded business value. Logos and identity synergies are an enabler, not THE strategy. Ensure strategic narrative ties success to Branded Business Value.

2. Ensure you have buy-in from all departments.

Full and ongoing execution of strategy is often dependent on the support and sponsorship of your Steering Committee. Strategy delivery will likely be limited if marketing is the only voice that is heard. Ensure your steering committee represents the strategically important areas of the business, are influential within the C-Suite, and experienced in delivering or sponsoring change in the business.

3. Consult and socialise heavily during strategy development.

Then remove democracy at the execution phase. Brand architecture programs can be political and sensitive. To avoid execution blocks ensure the chain of command is clear and mandated execution is non-negotiable. Secure early top-down endorsement and sponsorship for your strategy - Start with the CEO or Head of Corporate Strategy if you can.

4. Remove subjectivity and emotion at every stage.

Underpin your process and decision making with business strategy alignment rationale, customer testing and brand and business value generation financials.

5. Be patient!

Especially when you are pursuing a Masterbrand strategy across home and growth geographies. When operating across multiple geographies consider the relative life stage of your Masterbrand in growth/challenger vs. home/dominant markets. Varying migration speeds may be required when plotting a value-generating path over the short, medium and long term.

6. Strategy is activation.

Don’t stop at strategic recommendations – ensure complete activation guidelines are developed, mandated, embedded and governed. Underpin your activation guidelines with a Branded Business Value narrative.

7. Keep the business updated.

Make sure that you are communicating your progress throughout the brand architecture activation. Build ongoing senior leadership performance tracking and reporting into your plan. Include Business and Brand Value metrics in your scorecard.

8. Reduce the risk of a strategy unravelling.

Unless the strategy is effectively embedded and governed on an ongoing basis there is a risk the activation of the strategy may unravel over time. Be ready to call on your Steering Group if required.

9. Ensure your execution is effective.

Make certain your strategy, activation, and governance guidelines are embedded across the business at key decision points where brand architecture is up for debate. Ensure you have a voice at key cross-business meeting points across organic and inorganic growth pipelines. M&A teams are important partners.

10. At all stages remember Tip 1!

The greatest cross-business-support and executive sponsorship will be achieved if your strategy and management are underpinned by the growth of branded business value. Stakeholders will find it difficult to argue against what is right for the business.

Read More: Why Do Acquirers Rebrand Acquisitions?

1. The Evidence

The evidence is overwhelmingly in favour of maintaining or increasing marketing expenditure. A McGraw-Hill research study which assessed 600 companies in an economic downturn found that business that maintained or increased marketing expenditure increased base revenue significantly once the economy had recovered¹.

2. Share-of-Voice

Brands grow when Share-of-Voice is larger than Share-of-Market. Evidence provided by Les Binet and Peter Field suggests that when Share-of-Voice is larger than Share-of-Market, brands grow². This is particularly true for business banking. Intuitively, this makes sense, particularly in an economic downturn; spending when your competitors are cutting back enables greater potential impact of a given campaign.

3. Value preservation

Strong brands perform better in terms of value preservation and revenue generation during recessionary periods. A further argument for maintaining or increasing marketing activities.

4. Cheap and Impactful

Brand-building marketing investment is not only cheaper in a downturn, but will be more impactful on the memories of customers. Marketing activities aimed at businesses should be a mixture of rational (product based) and emotional (brand building). During the prevailing tough economic times, business decision makers are in a heightened emotional and influencable state. Additional benefits on increased marketing spend include the projection of stability to consumers.

5. Never take your foot off the gas

Never take your foot off the gas. As the saying goes “If you don’t manage your brand and reputation, you get the one that turns up”. The results of positive actions from marketers is the potential for brands to improve their reputation as they help society recover from the impact of Covid-19.

In April 2019, Great-West Life, London Life and Canada Life came together under one strong brand – the new Canada Life. ​

Whilst the unified company retains one of the former names in Canada Life, it has taken on a new logo and refreshed its brand positioning. This strategy aims to combine the unique strengths and core competencies of each company to create a seamless corporate identity under one brand. ​

This strategic move has seen a significant increase in brand value for the group. Canada Life’s spectacular growth of 650% is largely attributable to the consolidation of London Life and Great-West Life brands. However, brand portfolio amalgamation is not the sole force driving value growth. If we consider the combined values of the group in 2019 against the value of the amalgamated brand portfolio this year, there is still brand value growth in excess of 79%. Either way you slice it, Canada Life is the fastest growing brand in the ranking.​

The latest wave of Brand Finance research suggests that brand equity has been successfully transferred to the brand. The first wave of Brand Finance’s Business to Business (B2B) market research revealed particularly strong equity for Canada Life in its home market, ranking 1st overall in Brand Preference. Moreover, of the 14 B2B insurance brands researched in Canada, Canada Life ranked  2nd in innovation, genuinely offering something different and 3rd in both being reliable and caring about the wider community.​

Year on year, the increase in brand strength has seen Canada Life shift into an upper echelon of brand ratings moving from an A+ to an AA brand in 2020. ​

A concern in the short to medium term for Canada Life and all life and health insurers is the impact of Covid-19. The decline in equity markets and reduction in interest rates are harmful to the bottom line for insurers. However, stronger brands are more resilient to market shocks, and the increase in Brand Strength for Canada Life, as well as a strong reputation, should result in less harmful impacts of the virus on the business. ​

Whilst it may take some time to fully transfer the equity of the other brands into Canada Life, the company has set a strong foundation and an exciting platform to promote and stimulate growth into the future. 

An Interview With Jeff Macoun.​

Between January 2019 and January 2020, Canada Life was the fastest growing insurance brand in the world, in large part due to the tactical restructuring and consolidation of branded IP within the organisation. What were the factors that drove the decision to restructure the brand portfolio? Why Canada Life over London Life or Great West Life?

Bringing our three iconic brands together was a once in a generation opportunity to combine our strengths under one equally strong name. Our new brand has strong roots going back to Canada’s first life insurance company – Canada Life – which was founded 20 years before Canada’s Confederation. The words “Canada” and “Life” are powerful, especially when paired together. The name Canada Life speaks to everyone, from coast to coast.

Aligning under one strong brand has helped us create a simpler and more unified experience for our customers, advisors, consultants and employees. It’s also helping us build brand awareness by combining our marketing and advertising efforts. It’s been a great opportunity to rally our employees behind one shared identity, too. It’s been a very exciting journey.

With COVID-19 we are witnessing unprecedented effects on various industries, what is the impact been on the Insurance sector, and Canada Life? How is Canada Life positioned to tackle upcoming challenges?

The financial services industry as a whole has been greatly impacted by the COVID-19 pandemic, and I’m proud that Canada Life responded quickly when Canadians needed us.

Now more than ever, Canadians need guidance and advice. Customers have questions about their insurance coverage and the impact of these conditions on their investment portfolios. Experts matter at a time like this, and our advisors have shown outstanding commitment as they’ve responded to their needs. Most impressively, our company equipped over 95 per cent of our 11,0000 employees to work productively from home. They’re leveraging new tools to stay connected and serve our customers.

We’ve been flexible, agile and creative while navigating through COVID-19. Moving forward, we’ll embrace these capabilities as we continue to tackle challenges head on – and succeed – as a team.

Corporate social responsibility is an essential component for brand building. Your stated brand purpose is to improve the financial, physical and mental well-being of Canadians, how does Canada Life take that vision and connect it with communities?

Our purpose is the driving force behind everything we do. In 2019, we were fortunate enough to support over 700 education, health and wellness, arts, social services and community development initiatives. We contributed over $12 million in community funding across Canada.

We’re always committed to our communities, but during COVID-19 we’ve been quick to respond and do our best to help those who need it most. For instance, we recently announced our support of a few new initiatives in response to the pandemic, like food banks, mental health resources and support for small and medium-sized business owners.

Brand Finance's Insurance 100 2020 

See the complete report on our ranking of the TOP 100 Insurance brands in the world. 

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As Canada’s Big Five have maintained a heavy saturation of the domestic market, TD has led the way among brands seeking growth further afield. Expansion down the Eastern seaboard of the US has brought the bank considerable success and played a major role in brand value growth. TD’s brand value in the US has increased at 27% CAGR, versus 6% for the remaining operations (Canada & Rest of World). The US market is now responsible for 42% of the overall TD brand value. 

Looking at the brand’s marketing efforts in its growing market, TD kicked off 2019 with a quippy, funny campaign, Unexpectedly Human – which unsurprisingly boosted brand strength in the US.​

Perceptions at home also remain strong; TD is seen as having the best customer service for personal banking in Canada. ​

It’s a year of accolades for TD, in addition to becoming the most valuable Canadian brand, the brand has also taken the top spot as the strongest banking brand in North America. ​

While there is still some catch-up to be played with the US giants, all this highlights the potential TD possesses to dominate the entire North American market, coast to coast, in the years to come.​

Interview with Theresa McLaughlin

Between January 2019 and January 2020, TD became Canada’s most valuable brand and was the fastest-growing Canadian banking brand. With COVID-19 we are witnessing unprecedented market changes, how is the TD brand positioned to tackle upcoming challenges?

Since unveiling the evolution of our brand promise from Comfort to Confidence in 2017, we've made tremendous progress as an organization to center it around everything we do. The fact is that 79% of Canadians aren't confident they will reach their financial goals – we knew we had the ability and an obligation to help change this. From there, our journey to evolve our brand was designed to remove barriers and help our customers navigate and thrive in an increasingly complex world.

Our purpose and brand promise have never been more important. In the wake of COVID-19, the impacts of this virus are real and far-reaching and have disrupted the lives of our families, friends, and communities in significant ways.

Throughout this time, our singular focus has been on protecting the well-being of our customers, colleagues, communities. We have shared important steps TD is taking, such as safeguarding the health of our colleagues who have stepped up to support customers at a time of urgent need. And we acted to help those facing financial challenges as a result of the pandemic. In times like these, our commitment has been clear – we're here to help throughout this challenging period.

Attaining the top spot is a huge accomplishment, the next challenge is to maintain it in this climate. What can we expect from TD in the coming months?

As our journey continues into 2020 and we begin to learn how to navigate a new reality, we will continue to build our purpose-driven brand through the ‘TD Ready Commitment’, our corporate citizenship strategy, that will differentiate us and guide decision making on our community focus and investments. And equally important, we will champion colleague development and help our team learn and grow in today's rapidly evolving workforce, so they can do their job effectively to deliver exceptional results.

Whether we are talking about "confidence" or "unexpectedly human," it all comes back to putting the customer at the core of everything we do. Being a purpose-driven brand is about more than just good marketing. It's about living up to your purpose every day. It's the difference between your brand simply existing, and truly being a living embodiment of what your company believes in and stands for at its core.

Brand Finance's Canada 100 2020

See the complete report on the Top 100 ranking to learn more about the most valuable Canadian brands of 2020. 

A corporate growth strategy will likely include inorganic investments and new brand partnerships which will require an integration strategy. Current (organic) brands and brand relationships will also have a spotlight turned on them, and their ability to deliver to the evolving business strategy will be tested.

Any changes to a brand portfolio will bring about many logistical challenges, but they will also provide a window of opportunity to start leveraging your brand architecture to maximise growth and trim away latent inefficiencies. A robust brand architecture review will require a strategy that extends beyond basic measures (i.e. an aesthetic review of the logo and visual identity ) if it to be respected (and not unravelled) by the C-suite.

Avoiding the 'Efficiency' Trap

When organisations look to review their brand architecture, a common approach is to focus on energy and effort on 'tidying up brand and logos' at the earliest opportunity.

The process will often begin with a brand identity audit, then a search for synergies to see how the brands fit together as a family (or don't). This is then mapped onto customer journeys, and finally, certain brands will be chosen to be rebadged.

Decisions to back a certain strategy over another may be backed by market research, but more often they are acted out on impulse or precedent. There may be some light strategic analysis to support decision making but the exercise is typically logo and brand identity focused.

There will be internal stakeholders who will back the simple solution, for a good reason: it is quick and cheap. This is a tempting but risky perspective. M&A deals teams may be more focused on operational efficiencies post-acquisition, rather than the long term health of a brand portfolio.

Immediate rebadging without consideration for strategic migrations, or status quo placements of brands, can give rise to the customer, brand, and business performance risk. The counter-intuitive effect of this mindset is that rushing this process may undo business strategy and value-generating objectives.

How to Choose a Brand Architecture Strategy to Suit Your Business

Often companies will have a pre-existing brand portfolio strategy. The five most common strategies used by organisations are:

• 'Masterbrand' (trademark + descriptor)
• 'Sub-Brand' (trademark + trademark)
• 'Endorser Brand' (trademark by trademark)
• Freestanding Brands, (trademark)
• Hybrid Brand (mixed architectures).

It's likely that companies with large brand portfolios and/or active inorganic growth strategies will have a 'Hybrid Brand' strategy in place. And this makes sense. For a group with a portfolio of unique and strong IP, there can not be a one size fits all approach.

It is easy to understand the urge to simplify and seek out synergies where they lie between brands in your portfolio. It would be a lot cheaper and easier to promote 3 brands instead of 300. However, this kind of tactic overlooks hard-earned brand equity and can lead to the avoidable losses of hundreds of millions of dollars in brand and customer value.

The approach of finding quick logo synergy to visually exemplify the brand relationships across a group is common - even though we know brands (and how they deliver value to an organisation) are so much more than 'just a logo'.

Yet, when many businesses consider brand architecture, logos seem to become a proxy for delivering desired organisational synergy and the main route for perceived value generation (regardless of the realities).

In our post on Brand Transitions, we go into more detail on the risks at play when implementing your brand architecture strategy.

Should I Use a Masterbrand Brand Architecture Strategy?

A one size fits all approach to your brand architecture strategy may either be a recipe for value, or competitive dilution. The simplicity of using a Masterbrand strategy is very alluring to business leaders, but it is another common trap.

This is particularly relevant where a Masterbrand strategy needs to be executed across home markets (typically established or incumbent Masterbrand) AND growth markets (typically challenger Masterbrand activated through M&A programs).

Flexibility in the delivery of the strategy needs to be considered to recognise equity and value held by acquired or partner brands. Otherwise, you are opening yourself up to the risk of untimely retirements and a hit to your bottom line.

In this case, a best practice approach to architecture management will consider a ‘Two-Speed Activation’ plan:

1. Fast: A more aggressive approach to Masterbrand adoption and dominance can be applied assuming the parent brand holds dominant strength in organic and inorganic brand relationships - likely the case in home markets. This can quickly deliver to the target monolithic strategy and begin to build consolidated brand value.
2. Gradual: In growth markets where the Masterbrand is likely to be less mature, careful assessment of local brand relationships and the role played by the Masterbrand in these relationships is recommended

Of course in some instances, a strong brand (in penetrated markets to date) won’t require a slow placed transition as it moves into growth geographies through M&A activity.

For example, Vodafone as it embarked on its global expansion strategy, realised that in many markets the Masterbrand was considered superior to the local acquired brands – on network coverage, reliability and other choice drivers – despite not yet being present in the market. In these markets, there was a swift opportunity for Masterbrand value uplift made possible through the immediate retirement of acquired brands.

Not Just a Logo

The exercises of logo and brand identity review have its place as a strategic focus but it can blur the true value of a complete brand architecture strategy. Sure, logos and identity are part of a brand’s toolkit, but really they are just one of a number of strategy activators.

As symbols, they may convey a sense of ownership or belonging, but in the same way that merchandise can indicate fandom, this sense can be active or passive. Logo and visual connectivity are important to brands, but of course, they’re not the totality of the brand or the sole source of value.

When presented with the logo and identity review marketing and business leaders would be well advised to pressure test with a wider brand and business value led discussion. The following questions should be answered before any moves are made:

• Can logo and visual identity alignment really deliver business connectivity and value-generating experiences for customers? Are these experiences that build demand, NPS, and revenues?
• Can a tidy up of logos really breakdown internal silos (that are often inherited through mergers and acquisitions)?
• Does cleaning house deliver improved business integration and strategic coherence, and add a competitive advantage through seamless customer experience?
• Can a review of logos and identity alone reveal the business value opportunities (and value at risk) in an organisation’s brand architecture – current or proposed?
• Most importantly, can a review of logos and brand identity really asses and set a strategic course for building branded business value for an organisation?

A common scenario for businesses is that this level of discussion is often sidetracked by politics, ingrained brand loyalty, or even just gut feeling alone. It's easy to be biassed towards a brand that you have been building for years, especially if it's on the chopping block.

Our suggestion is to resist oversimplifying the issue to logos and identity, and instead, position this train of thought as an enabler of strategy and a more comprehensive strategic assessment.

To help achieve this, businesses should first consider a more complete definition for brand architecture strategy and to establish their ambition and approach accordingly:

‘The organisation and structure of a company’s brand relationships that define and order the roles and relationships that connect them to both organisational values, business strategy and the generation of brand and business value.’

Brand Architecture Definition

With this definition in mind, the focus becomes less about tidying up, integrating logos, and identity, and more about looking at the strengths, weaknesses, and value of the brand relationships within a portfolio.

Breaking Down Brand Architecture

Once you start to zoom out it becomes easier to understand the flow of equity and value between the assets in your portfolio and how they deliver (or not) to the overall business strategy. A review of logos, visual identity, and customer journey change-out may come, but it’s certainly not the starting point.

We call this a 'Branded Business Value' approach to Brand Architecture strategy. The approach offers a comprehensive range of qualitative and quantitative analysis to inform strategy and decision making (not limited to the exercise of Brand Valuation alone).

We underpin the process with ‘Brand Research + Brand Valuation + Brand Strategy’ capability, the components of which can be individually applied or integrated to meet the needs of a business across a range of brand architecture scenarios.

Brand Valuation; Brand Contribution to business; Brand Stretch testing; Migration Planning and Optimization; Brand Proposition Testing; Maximising the value of Trademarks and Licensing; Quantitative strategic planning are some examples.

In our experience, there are some stand out stages and conditions in an organisation's lifecycle, or during design and delivery of strategy, where a Branded Business Value approach should be considered for maximum impact (and where logo and identity synergy alone will likely fall short).

Establishing a futureproofed brand architecture strategy, rooted in hard data, and focused on the macro health and performance of the business is a complex task. In our guide on brand architecture, we will be unpacking why this is the case, and how to start making changes that optimise on the value built into your portfolio.

Brand Architecture Strategy in Practice

We have worked with a number of global and regional businesses who both executed aggressive M&A growth programs or market defensive strategies and saw a need to review and optimize their brand architectures and business ROI.

We work closely with these organisations to help define the risk/reward to business value across a range of portfolio adjustment scenarios. In a number of cases this analysis (incorporating positive brand cost-benefit and customer demand analysis) has recommended immediate and significant consolidation of architecture.

While in some cases churn, reputation and revenue risks have been identified under such a wholesale approach, resulting in the recommendation for more gradual migrations and/or retention of other brands within a hybrid portfolio.

However you slice it, a fully fleshed out brand architecture strategy warrants a place as part of any corporate business strategy/vision. But it goes beyond just a logo tidy up, or setting up a one-time strategy, and hoping that it is futureproofed for all M&A scenarios. A brand portfolio needs tending, and certain brands abilities to drive value back to the business will likely change with time.

Brand Architecture 101:
10 Tips to Inform a Successful Brand Architecture Strategy
Brand Architecture Case Studies: Telstra, Virgin, and Vodafone