Paddy's writing on Business, Brand and Reputation

This blog contains some of my writing on Brand and Reputation, including those on Shell - the corporation that I worked for for 37 years. Some of the articles have previously been published - others are seen here for the first time. The purpose of the website is to contribute to discussions on the role of brand and reputation management in today's business world. Please also see: http://www.roadsideretail.com/search?q=Paddy Comments welcome to me at: paddy_briggs@yahoo.co.uk

Friday, July 08, 2011

News International's brand new opportunity

News International (NI), the UK newspaper arm of Rupert Murdoch’s News Corp, has been in serious trouble with one of its brands. However unlike, say, BP it is a sub-brand, “The News of the World”,  which has turned toxic not the corporate “mother brand” and whilst there is fallout on NI, and even to a small extent on News Corp itself, the Murdoch empire has really only suffered collateral damage.

Corporations of the size of News Corp are used to managing a proliferation of brands in different markets. News Corp has literally hundreds of separate brands across its diverse media businesses and its senior executives understand well that brands have strengths and weaknesses and that, as in the case of the “News of the World”, they can be damaged. They have decided that the damage to the News of the World is beyond repair and so they are closing the title. Such drastic action is quite rare but even the most skilled brand practitioners have to bite the bullet sometimes.   Coca Cola, for example, had a brand disaster with Disani a bottled water brand in the UK a few years ago. They withdrew it rather than try and repair it. The “News of the World” is a much older and formerly a very strong brand entity but the phone hacking and police bribery stories were such that the brand was judged by NI executives to be beyond repair – they were no doubt right.

News International's main revenue generators have been “The Sun” and the “News of the World” and these titles’  income streams have cross-subsidised the loss-making “The Times” and “The Sunday Times”.  Indeed without the ad revenues of the tabloids NIs whole business model collapses. The shareholders of News Corp have every right to expect that NI will seek to minimise the effect on the bottom line of the “News of the World” closure – and there is only one way to do this. The Sunday tabloid, with a circulation of 2.6million, has to be replaced urgently and a sound advertising driven business has rapidly to be built up.

A definition of a strong brand is one that generates income over and above is basic utility or commodity value. When it became apparent that the “News of the World” could no longer do this there was no choice for NI but to withdraw the brand. But the business infrastructure of the newspaper remains intact. The editors,  journalists, reporters and support staff are in place. The advertising sales teams have not been disbanded. These employees can be switched instantly to a new title and that is what will happen. Out of the ashes of the “News of the World” a new NI Sunday tabloid will emerge.

Which brings us back to the brand. A sign of a strong brand is when it is used in the vernacular one step removed from its actual business. So just as we once talked of the “Pepsi Generation” so the idea of the “Sun reader” is fixed in the awareness of marketers and commentators. Whilst this descriptor may be used by some in a derogatory way in fact the Sun readers are very valuable indeed. There are 7.5 million of them, spread fairly evenly across the age ranges and with 88% of them in the CDE social class groups. They have a very high collective purchasing power and they are firmly in the sights of the FMCG marketers – like the supermarket chains.  And it is this huge group which NI will want to attract to their new Sunday tabloid – and how better to do this than to give it the Sun’s brand name?

The launch of a “Sunday Sun” or, more likely, a “Sun on Sunday” could happen immediately – indeed it is not too far fetched for the switch from the News of the World brand to the Sun brand could happen on consecutive Sundays. This might politically be a step too far for NI, although I wouldn’t put it past them. But whether the Sunday Sun title appears immediately or whether there is a short hiatus doesn't really matter – it will happen. And for a marketer it is a dream project to launch the Sun’s Sunday sister. The promotional and advertising budgets can be guaranteed. Cross promotions from the weekday title will be straightforward to arrange – expect coupons which when saved during the week will give a free copy of the Sunday to loyal readers at launch.

The Sunday version of the Sun will have a huge head start over any other new title – this is because the brand values of the Daily will simply be transferred to the Sunday. You don't need to explain to a “Sun reader” what a “Sun on Sunday” means – it all in the name.

Thursday, July 07, 2011

It’s the brand stupid

When the news broke, on Twitter inevitably, that the “News of the World” was to close there was a mighty gnashing of teeth and no little wailing form the journalist community. Job losses. Innocent victims. That sort of thing. But actually it’s no big deal. Here’s why.

When a brand is damaged beyond repair, but there is a market position to defend, then rebranding is the obvious choice. At the moment BP is rebranding many of its gas stations in the US “Amoco” and the reasons for that are obvious. For News International its the same. They have a very strong brand in “The Sun” which has a circulation of 3million –nearly one million ahead of its next competitor. Their fatally wounded “News of the World” brand is similarly strong in circulation terms 2.7m and a lead of over 800,000. There is no way that NI is going to give up that inco0me stream – and they don't need to.

The introduction of a “Sunday Sun” (or “Sun on Sunday” ) has huge benefits. The toxic News of the World brand is shed. The Sun brand can extend seamlessly into a seven day operation. There will be some economic savings. And online they can concentrate on one Sun branded website for all their communications.

One can expect that those Sun readers who don't currently buy the NOW will be heavily incentivised to switch their Sunday paper to The Sunday Sun. Or in some cases to buy a Sunday paper where currently they don't. Cross promotions will be the order of the day – NI has the financial resources to really build the Sunday Sun as a successful sub-brand of the generic Sun brand.

The people who should worry about  Mr Murdoch’s clever coup are the publishers of NI’s competitors! A seven day Sun will be formidable.