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How Alphabet builds brands

News, 08 July 2016

CANNES: Alphabet – the parent company of digital properties such as Google.com, YouTube and the Android mobile operating system – believes the philosophy that "the product creates the brand" has helped fuel its success.

Eric Schmidt, Executive Chairman of Alphabet – the name taken by Google Inc. after a restructuring effort in 2015 that grouped its major digital properties into a unit called "Google" – outlined this product-first model at the recent Cannes Lions International Festival of Creativity.

"We've always taken the position that the product creates the brand, and that a bad product is a bad brand," he said. (For more, including further details of the firm's approach, read Warc's exclusive report: Google's "platform" strategy for building brands.)

Google, the search engine, was the organisation's original offering and remains a key driver of revenue through paid-for advertising keywords.

And Schmidt suggested it was a "fantastic product" because it meets the needs of consumers and also other key stakeholders such as advertisers.

"The other sub-brands, if you will, have that property as well. So we pay a lot of attention to the quality of the product, its distribution, and so on," he said. "In some sense, we will earn that brand if those products work well. And, so far, they seem to."

As a sign of its success in this endeavour, Alphabet's Google division currently contains seven digital assets with over a billion users – its Google search engine, Google Maps, Gmail, Chrome, Android, Google Play and YouTube.

"Google is run by computer scientists, and is, essentially, a platform company. Those platforms, when they are running well, create huge markets for partners, advertisers, and so forth," Schmidt claimed.

With research group eMarketer predicting that the worldwide internet audience will increase from 3.4bn people in 2016 to 4.2bn in 2020, it is clear that Alphabet's suite of digital services have considerable growth potential.

"Of course, there's lot of people left, because there are seven or eight billion [people] in the world," Schmidt said.

"We have lots of room for more users. And if you have those kinds of users and platforms, you can come up with products which you can make money with – partnering, advertising, subscriptions, an enterprise business, and that sort of thing."

Data sourced from Warc