The intense cost of supporting multiple sub-brands and independent brands came up during last week’s Online KnowledgeBuilder on brand architecture. I thought it was worth a little more discussion.
Our KnowledgeBuilder discussion reinforced that, in most cases, little thought is given to marketing costs when the heads of various units – deans, chairs, directors, vice presidents, etc. – get a wild hair that they want their own brand identity. For some obscure reason, unit directors are convinced that having their own logo and creative identity will somehow make their units more successful. Maybe it’s ego, too.
But rare is the unit director who gives serious consideration to what it will take to actually support their sub-brand or independent identity.
It’s more than just the cost of creative development, although that can be significant on its own. It also involves printing costs; signage; costs for website, microsite, and social networking presence and maintenance; ongoing PR and internal communications; events marketing; and an adequate advertising budget. How about staffing for developing the materials, writing a separate marketing plan, and implementing integrated tactics?
We’ve estimated that each sub-brand you create will cost your institution at a minimum, an additional 65% to 85% of the core marketing budget in order to adequately support it. For example, if you’re investing $1 million annually (including salaries, operating expense, PR, marketing, advertising, and promotions) on the core brand, then each sub-branded unit should be budgeting between $650,000 and $850,000 in annual marketing and communications investment.
Each independent brand will cost your institution even more – between 75% and 100% as much as the core brand marketing budget. (It’s never a good idea to have a sub-brand invest more in marketing than the core brand over an extended period of time, since the risk is that the sub-brand will eventually gain greater equity than the core brand – a calamity.)
For institutions devoted to the public good, and particularly in this difficult economy, such additional marketing requirements can appear extravagant to the point of wasteful.
Regardless, the projected costs for marketing support of sub-brands and independent brands needs to be at the forefront of any discussions about creating unit-based identities. It should be one of the basic criteria for whether or not to create such an identity, and it’s one of the big reasons that we caution brand managers that senior leadership must assume authority and responsibility for approving the institution’s brand architecture.
I invite your further thoughts on this issue, and thanks to all the participants in last week’s KnowledgeBuilder on brand architecture
