This blog post examines why logo production costs vary so widely, exploring whether design skill or brand value dictates pricing, focusing on Pentagram case studies.
We literally live in a flood of brands today. And the very symbol of these countless brands’ identity and essence is the logo. Even for identical products, the price can differ by tens or even hundreds of times depending on whether a logo is attached. Given that a single logo can completely transform a product’s value, it is a crucial element for both consumers and companies.
So, who creates the logos for these global corporations, and at what cost? Nike’s iconic swoosh logo was created for $35, and Twitter’s early logo cost just $15. Conversely, Pepsi paid approximately $1 million for its logo renewal, while Accenture spent a staggering $100 million. As such, logo creation costs vary wildly, with price differences reaching extreme levels.
At the heart of this ultra-high-end logo creation lies a legendary design group. The firm behind the logos for Citigroup, Mastercard, Tiffany & Co., and Shake Shack is none other than Pentagram. However, Pentagram operates in a form entirely distinct from typical corporations. It functions as a cooperative of sorts, run by 24 partners on equal footing, with no CEO or board of directors. Here, a doodle sketched on a napkin in five minutes can become the logo for a global corporation worth billions of won, while conversely, they might create a logo for a world-renowned franchise at no charge.
So where does the difference between billions of won and free design come from? The difference doesn’t lie in the design’s quality itself, but in the ‘value’ held by the company commissioning the design. Pentagram doesn’t demand high fees from just any company. So today, we’ll explore what kind of organization Pentagram is, capable of creating billions in value through logos, and how the price of a brand logo is determined.
As mentioned earlier, Pentagram has a structure closer to a cooperative than a typical corporation. While typical companies have C-level executives like CEOs, CFOs, and COOs and operate board-centrically, Pentagram lacks such hierarchical structures. Only equal partners and their respective design teams exist. The name ‘Pentagram’ itself originates from its five founding partners.
This unique structure stemmed from the experience of one of the co-founders, Theo Crosby. He experienced designers from different fields collaborating in a horizontal relationship at the ‘This is Tomorrow’ exhibition in London in 1956. He later proposed creating a design studio based on this model, and thus Pentagram was born. It has since expanded to 24 partners.
The process of becoming a Pentagram partner is extremely rigorous. It requires unanimous approval from existing partners and is notoriously slow. According to the criteria set by co-founder Colin Forbes, a partner must be able to generate business independently and possess international renown in their field. They must also manage project profitability and be a collaborative team member. In short, each partner must be a master in their field while also being capable of teamwork.
Thanks to this structure, the scope of projects Pentagram undertakes is extremely broad. It spans diverse fields, from brand identity to data visualization, industrial design, and architecture. This is because each partner and their respective design teams are highly specialized and esteemed within their respective domains.
Consider Paul Rand, a legendary graphic designer and one of Pentagram’s most prominent partners. He built an unparalleled reputation in typography during the 1970s as art director for CBS Records. One of his most iconic brand identity works is the Citigroup logo.
In 1998, when Citicorp, the parent company of Citibank, merged with Travelers Group, a new corporate identity became necessary. The key challenge was how to integrate the existing Citibank logo with Travelers’ iconic umbrella logo. During a meeting, Paul Rand began sketching ideas on a napkin and proposed a design placing Travelers’ red umbrella atop the lowercase ‘t’ in ‘Citigroup’. This simple idea became a symbol that masterfully combined the identities of both companies and remains Citigroup’s logo to this day. The cost of creating this logo was approximately $1.5 million.
In contrast, Shake Shack’s logo emerged through a completely different process. Paul Rand also handled this project, but it was done pro bono. While participating in the redevelopment of New York’s Madison Square Park, he designed the identity for a hamburger shop within the park. Shake Shack’s logo and typography, inspired by 1950s neon signs, blended seamlessly with the park. It remained unchanged even as the brand expanded globally into franchises. Effectively, Pentagram provided the design for a brand now worth billions in market capitalization at no cost.
Pentagram also executed numerous other major projects, such as Mastercard’s rebranding. Mastercard simplified its previously complex logo, then in 2019 made the bold decision to completely remove the brand name, leaving only two circles. This was a symbolic strategy fitting for the digital payment era.
This capability stems from Pentagram’s structural characteristics. The most challenging aspect of design is not the final product itself, but the process of persuading the client to accept it. At Pentagram, partners communicate directly with clients, leveraging their reputation and trust to secure persuasive power. Consequently, even conservative organizations like large corporations, financial institutions, and public agencies relatively readily accept Pentagram’s proposals.
Criticism exists, of course. Some argue Pentagram’s designs lack novelty, are not innovative, and are outdated. However, the larger the organization and the more stakeholders involved, the more stability and universality become prioritized over radicalism. In this regard, Pentagram can be considered a design group optimized for large corporations and public institutions.
However, the rise of in-house design and the proliferation of AI technology since the 2000s present new challenges for Pentagram. Particularly as design work utilizing generative AI becomes known, debates have surfaced about whether the high cost of design can be justified. This ultimately leads to the fundamental question: ‘What is design?’
In conclusion, the price of a logo is determined not by the design itself, but by the value of the brand it represents. Citigroup and Mastercard could afford multi-million dollar logos because they possessed that level of value; early Shake Shack and Nike could not, hence their logos were cheaper or even free. Pentagram’s success can also be seen as stemming from its ability to accurately read these value judgments.
