Big Brother does not truly exist. The average citizen of Oceania does not know this, but we do because of the scene where Winston questions O'Brien about Big Brother, and O'Brien dodges the questions.
The dual purposes of Big Brother are to inspire both fear and love. Big Brother becomes a family member in a world where families are torn apart and considered less important then the state. He also inspires fear as he is supposed to be all-seeing, all-knowing, and ruthless when dealing with dissent.