For the convenience of my fellow "brand geeks," please see the follow-up reprinted below. I am most interested in your comments.
Key points from the original post:
1. As a brand, Google has attained the three characteristics of "Brand Power" (Millward Brown/BrandZ) - meaning, difference, and salience.
(Meaning = meaningfulness/affinity; difference = uniqueness; salience means that you think of the brand when you want to buy something in the category; a.k.a. it's "top of mind.")
2. Its name is therefore extraordinarily precious. Accordingly the stock value is exponentially higher than the average search engine would be. (I hate Bing and Yahoo Search with an irrational passion.) Since its IPO in 2004 the stock price of Google has shot up from $85 to $633.
3. At the same time, we know that Google repeatedly violates the basic concepts of branding, such as focus, consistency, and sticking with one's core competency. An example of the latter is the failure of Google+, which I predicted back in July 2011. See link: 5 Reasons Why Facebook Will Beat Google+ Easily
4. To the original question, we do not know why the company chose to de-focus its audience on its core name. (It should be noted that the accuracy of this decision has yet to be determined; saying it's a bad idea is articulating an opinion rather than a fact.)
Personally, my gut tells me that this is a case of leadership insulated from reality, either bored or making an emotional decision for some other reason. In this I agree with Felix Salmon, writing at Fusion. See below:26 reasons Google created Alphabet
Incidentally, what great brand owners know is that consistency lies in attaining a certain level of boring-ness --> to the OWNER. It is only when the brand becomes boring to the USER that it requires revitalization. WE ARE NOT BORED WITH GOOGLE.
Here are some additional thoughts in response to blog posts by some of the world's top brand strategists.
According to Adamson, Google did a smart thing because they chose a good name. Alphabet, he says, does three things:
Cuts through the clutter --> I agree.
It tells a story --> I agree with this as well.
It is authentic to the category --> again, agreed.
Yet in focusing on whether this particular name is good or not, he misses the larger question:
Is it a good idea to focus your audience on a parent name when you've got a brand right now that is one of the most desirable in the world? I would argue that it is a terrible idea to de-focus your audience from your name.
Additionally, it goes without saying that we should not reduce questions of "branding" to literal choice of name, logo, wordmark, and design but rather look at the total brand picture.
With respect to the comment about authenticity: For a company that is known for its pervasiveness, the decision to adopt a childlike moniker like "Alphabet" seems disingenuous. Despite the clever idea to denote "an assortment of companies" similar to "an assortment of letters" I personally find it a huge turnoff.
Joachimsthaler endorses Google's "House of Brands" strategy, which enables the creation of new names, versus the "Branded House," which is a collection of separate names. But he neglects to note that there is a third way, which would involve a hybrid approach. Some brands could take the Google endorsement, while others would not, and the parent company could remain Google.
He goes on to make some other points:
1) A holding company with an assortment of small companies will facilitate acquisition of those that succeed. My response: Similar to my comment on Adamson's post, the issue is not whether Google can be nimble. It is whether they should destroy a massively valuable brand name in order to create a new one. In fact, people will continue to call them Google, even after they change the name, which is the point. They could have retained "Google" and then every spinoff business would benefit from the parent company's luster. With "Alphabet" they look like they are starting from scratch, for absolutely no reason.
2) Facilitation of new cultures will help facilitate new business models. My response: As Joachimsthaler notes, Google is known for its focus on culture. Based on that, I disagree with his assertion that new name = new culture. I believe the founders will touch every company they create, and will shape the cultures everywhere, no matter what name is or isn't used, precisely because this matters to them fundamentally.
3) "Brand-building synergies and efficiencies are overrated." My response: This comment misses the point. The purpose of choosing a brand strategy and accompanying architecture is not primarily to facilitate synergies within the different operating units. It is to provide the customer with a seamless experience where a seamless experience is warranted, and a unique experience where that makes more sense.
4) The name is logical. My response: This argument rests on two premises. Like Adamson, Joachimsthaler argues that Alphabet denotes an assortment of many different ventures and companies. With that there can be no argument. But again, we are not starting from scratch here, and why should a customer or an investor trust this unknown entity?
The second premise is that the brand is B2B (business to business), and not B2C (business to customer). But again, this premise is faulty because the line between B2B and B2C is not so strict as it used to be. Consumers are business owners themselves, they follow business news, and they talk investor talk. Especially for a brand at the level of Google, they are going to follow the actions of its holding company precisely.
So what should Google have done? What can they still do?
It's pretty simple, albeit boring:
Establish Google Holdings.
Within Google Holdings, have Google (the core search brand) and Google Labs (for experiments related to search).
Outside those two brands, spin off with new names companies that are unrelated to search, such as the driverless car venture.
As always, all opinions are always my own. Author's note: To contact me with questions or to request a free initial consultation, connect with me here on LinkedIn or visit my website. Image via MemeGenerator.net.