In Stand by Your Brand, Nielsen published the visualization below, plotting Equitrend and RQ. Each dot represent a company-brand pair. The location of the dot on the vertical axis represents the brand score, EQ. The location on the horizontal axis represents the corporate/company reputation score, RQ.
The positive trend suggests that brand and reputation are closely linked. Thus, the argument, “in our connected world, one corporate misstep can go viral and result in adverse impacts on products linked to the company through masterbranding.”
The link between reputation and brand is sensible and intuitive… all very informative. Except there’s one thing…
This word “masterbranding”: I’m very hung up on it.
First, of course, it sounds a little too much like masturbating. And it reminds me IBM’s rebranding of Deep Thought II.
But more importantly, “masterbranding” suggests that the model of diversifying your brand portfolio and maintaining independence across the performance of your brand family no longer applies.
As I understand it, the argument seems to go something like this:
In a connected world, parent-brand family ties are more salient, so let’s not bother insulating Brand A from Brand B. People will figure out that both brands are part of the same company anyway.
I’m skeptical that the world has changed that much though.
If you want to find out who the parent company of Dove is, you can figure it out. This has always been true before social media, before the internet. Just because information is easier to come by doesn’t mean people will purposefully search the family of brands under Unilever.
Even if we do assume that our “connected world” means consumers are now more aware of the hierarchy of brands, what incentive does a company have to unify their brands?
They would only want to do that if they have such a behemoth of reputational equity in one of their brands that they want to scale up. So much so that they are willing to sacrifice a smaller brand just so the other can have a bigger reach.
But this is so seldom the case. Having several brands is a diversification strategy. Did Porsche sales see a dip during the emissions crisis? Probably a little bit, but certainly not as much as they would have if there were a unified marketing strategy. It comes down to isolating brands so that their performances are mostly independent – otherwise you’re putting too many eggs in one basket.
Think about it: Why is it that a bad Uber experience is potentially national news, but a bad Etsy seller is an isolated incident? Because Uber is positioned as a unified product and Etsy is a platform. I think Uber’s unified brand is its biggest reputational risk right now.
We live in an increasingly “platformed” world, and people understand that Joe Scmho’s racist rant on Youtube doesn’t diminish all the other good Youtube content. People will accept that many familiar companies are really not that different than Etsy, but they’re just operating on a way, way bigger scale.