What’s the cost of managing multiple brands under one corporate umbrella?

For brand managers, the aftermath of a merger or acquisition, strategy change, or company repositioning comes with a massive suite of decisions that need to be made. Will all legacy brands be converted? Will one or more of the brands be discontinued? Or will all the various brands continue to exist under one big newly formed corporate umbrella?

Often, organizations may elect to manage multiple existing brands operating within the same market, rather than consolidate legacy brands under a single rebranded identity, based on a series of beliefs. These may include:

• A rebrand is too costly and will require too many organizational resources to implement
• Internal stakeholders won’t accept changes to a well-known legacy brand
• The legacy brands under their umbrella have strong equity that should be preserved

Whatever the case may be, with so many moving parts to contend with following a merger, electing to manage a group of legacy brands might be the path of least resistance. Organizations taking this approach may find themselves duplicating investments in marketing and creative resources, administrative and legal counsel, and much more.

In addition to duplicate costs, maintaining two or more brands under one roof can also result in watered-down brand development, and countless missed opportunities for streamlining operations. If the resulting inefficiencies are allowed to continue long term, the resulting decrease in ROI is a sore point no marketing department wants to contend with.

When weighing the options of consolidating or managing multiple brands, keep the following factors in mind.

Duplicated costs

When managing two brands under one roof, brand teams must adhere to multiple brand standards and allocate resources to maintain them. Just considering the creative side, this can include multiple:

• Brand guidelines
• Photography libraries
• Iconography libraries
• Creative assets for advertising
• Advertising budgets
• Media purchases

Creative output is just the start. Managing two brands means doubling expenses for search engine optimization, social media initiatives, community management, and more. Additionally, you’ll encounter extra costs for branded collateral, legal matters (such as trademark registration and intellectual property protection), and administrative tasks. To handle these duplicative tasks and costs effectively, a substantial team is necessary to avoid overextending resources.

Dueling diluted brands

In addition to rising costs, managing multiple brands can also lead to a secondary challenge—underdeveloped brands and missed opportunities. After all the duplicated efforts and added costs, brand managers and CMOs may feel disheartened to find that their promotional efforts achieved the opposite of their intended results. When budgets are stretched thin, dollars are dripped into multiple brands where they may make less of an impact.

In addition to brands not getting the dedicated support they need to stand out in a busy marketplace, time to market can also suffer. When time and resources are divided, departments can remain siloed, lacking the synergies that can help champion a single brand forward. It can also mean that once a campaign makes it to market, brand consistency could suffer as the umbrella corporation’s attention is divided across two or more campaigns at once.

Missed opportunities in economies of scale

Another factor that can impact ROI when it comes to managing multiple brands are economies of scale, and the lack thereof. When merging two established organizations, each with their own built-in network of vendors and service providers, overlap is bound to occur. When each brand has its own stable of suppliers for branded assets and collateral, corporate can miss out on cost savings associated with bulk purchase.

In terms of procurement alone, restructuring to a single point of contact with the purchasing power of the full organization can result in volume discounts that were previously unavailable to the legacy brands.

Dig into the architecture of all brands

Presumably, all the brands under your umbrella have well-established visual systems, positionings, and identities. When it comes to understanding how best to support them, spend time to understand the functionality of their respective architecture will pay out dividends.

A great place to get started is by asking all stakeholders questions to understand where each brand is coming from. Questions like:

• What is the relationship between the parent corporate organization and each brand?
• How will all our brands be visually represented on corporate branded assets?
• Are there any opportunities for co-branding?
• Are there any regulatory considerations from legacy brands incoming brand team members need to be aware of?
• How do naming conventions for each brand under the corporate umbrella function across all divisions, departments, products, etc.?

Once a clear picture has emerged, a strategy can be implemented to achieve results in a measured, sustainable way. Understanding your shared brand architecture can help ensure all your long-term business objectives are met, and your goals reached.

Explore shared marketing services

When managing multiple brands, as opposed to consolidating them under a new master brand, time and cost efficiencies can be realized through the consolidating marketing services. Here again, a great place to start is by meeting with stakeholders to get their take on where their brands are coming from and where they’d like them to go. Ask:

• What is the role of our corporate marketing team as it relates to each of the brands under management?
• If we’re managing several legacy brands under one roof, are there cost efficiencies we can implement? Legal, procurement, administration, etc.?
• Are our collaboration tools up to the task of ensuring brand consistency across touchpoints and channels?
• Is our marketing and funding allocated in a way that ensures all brands under the umbrella get the attention they need and deserve?
• Are there efficiencies we can implement now in terms of process, resources, and technology?
• What are the goals of each specific brand?
• What are the goals of the overall corporate entity?

By reorganizing under a centralized marketing and brand function, brand management departments that were once siloed emerge as a collaborative, supportive whole. With a shared marketing service group, every brand under management can share procurement services for everything from creative services, media buys, content development, social and advertising strategy, you name it. Backed by the oversight offered by a central team, organizations can reduce or even eliminate costly duplicate efforts, share ideas and strategies across brands, and enjoy a holistic, top-down view how brand is being presented, and performing, in-market.

An additional benefit to implementing a shared marketing services group comes down to the people who will run the show day-to-day. Even in situations where each legacy brand maintains their own brand managers, a centralized marketing services group can enable communication and coherence between brands. This can have a positive impact on everything from operational processes, training, sharing of tools and resources, and more.

If you’re starting down the road of assessing your brand architecture and need help implementing cost-effective solutions with real ROI, we can introduce you to partners to analyze the brand architecture and we can make the brand change happen.