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Office Max, Home Depot, and Walmart all represent the most commonly used type of logo — the wordmark. Typically, this type of logo relies on text, typeface, and unique typographic treatments to express the brand’s identity. Because there are no graphic elements to convey a message, the text is often exactly literal, stating the name of the company and sometimes even what it does.

Wordmarks work best for companies whose names describe what they do, or for those with a distinctive name, even if it’s not yet a household word. This type of logo can be cost-effective for companies with limited marketing budgets that need to focus their efforts on building name recognition. It can also help associate your brand name with products or services more concisely than a symbol might.

Think of a lettermark logo as a monogram for your business. Like a wordmark, a lettermark is entirely text, but rather than the entire name of a business the logo relies on initials to represent the brand. Lettermarks can be a simple monogram or an anagram. CNN is an example of a monogram lettermark logo — it uses the initial letters of the company’s full name, Cable News Network, to create the logo. FedEx represents an anagram lettermark logo, drawing on the first few letters of each word of the corporate name — Federal Express.

Lettermarks are great if your initials look better in graphics than your full company name. They can also allow you to create a visual link between subsidiaries and parent companies. A word of caution, however — lettermarks work best for companies that have sufficient existing brand recognition and can afford the time it may take to educate consumers on what the lettermark means.

Departing from the use of text alone, a brandmark symbol uses a strong graphic, which is often abstract, to highlight an aspect of the product or service the business sells. The symbol represents the company by association and relies on the design’s ability to evoke emotion in a viewer. For example, the Nike swoosh implies motion, the perfect representation for the company’s line of athletic shoes and athletic wear.

A brandmark logo works well if you need an emblem for your product, or if your name is too long, generic or lacking in personality. From a business standpoint, a brandmark can be effective globally in areas where a company’s name may not translate well. It can also allow subsidiaries to associate themselves with parent companies when they’re not able to use the parent’s name directly.

A marriage of a brandmark symbol with a wordmark, iconic logos are also referred to as combination logos. Elements may be used together or separately, tied closely or loosely. This type of logo can be very effective in communicating both what a company does and what it stands for (its corporate personality). Mastercard Worldwide, NBC’s peacock logo, and Dunkin’ Donuts are examples of iconic logotypes.

Although some of the most recognized logos in the world are iconic logotypes, this form of a logo can actually work well for startups and small businesses with tight budgets, whose name may be distinctive but not yet widely recognized. This type of logo is very effective in communicating brand identity, so choosing an iconic logotype may require less marketing to gain recognition for the logo.

A professional logo design service can help you identify what type of logo is best for your business.