Profile: Jeremy Gilley

The man marketing world peace

i for ill-conceived and, ultimately, ill-fated

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Last week was the perfect occasion to reflect on the strategic advantages of killing brands, and also to highlight the likely trouble for those companies that have the temerity to launch new ones.

It began with Ford’s triumphant third quarter results. According to CEO Alan Mulally: “A few years ago, we were a discount brand in the smaller and medium-sized vehicles sector. We have moved into a new chapter for Ford; building cars and trucks people really want and value, and continuously improving our quality and productivity.”

Ford lost almost $15bn in 2008. So far this year, the company has earned $6.3bn. That’s an astonishing turnaround for any company and can be attributed to Mulally’s decision to sell off most of the other brands in his portfolio, like Land Rover and Aston Martin that once clouded and confused the company’s strategic direction, and return its focus to “One Ford” - as the corporate slogan now proclaims. Earlier this year, I wrote the best article in the world on the rationale behind Ford’s new strategic approach.

That last sentence might sound arrogant, but about a month ago I got a voicemail from Mulally telling me that my Marketing Week column was the best he had seen on the company’s new strategy and to confirm that the approach was indeed working.

There are many different ways to start a working day. Some marketers prefer yoga, others a cigarette and a cappuccino. But until your day begins with a ten-minute voicemail from the man tipped to be global CEO of the year, you really have no idea how energised you can feel at 7.30am.

Not only will i fail, it will leave The Independent in even worse shape

As much as I loved listening (over and over) to one of my marketing heroes telling me how much he enjoyed my article, I wish I could have diverted the call to Alexander Lebedev, the Russian tycoon who now owns The Independent and who last week launched a new newspaper called i.

The new 56-page paper costs 20p and features condensed versions of the day’s news, business and sport. The scaled down format, low price and positioning as “a newspaper for the 21st century” are all designed to attract the younger Gen Y reader who is too busy or too unmotivated to buy a daily paper. “We are creating the first post-modern newspaper,” said Simon Kelner, editor-in-chief of i and The Independent. “Post-modern in the sense that everything has been tried [to stem the decline in circulation] and this is something that comes at the problem from a different direction.”

It is worth pausing at this point to note how similar both Ford and The Independent’s circumstances once were. Both had declining market share in categories that were increasingly driven by promotional spend and falling profitability. At this point, however, we should also observe the very different strategic responses that they have opted to pursue.

Ford realised that the company had to change itself to better compete in a new market with very different dynamics and also recognised that its current portfolio of brands made that evolution completely impossible. So brands were sold off and Ford began to redesign its main brand with ultimate success. Over at The Independent, the company opted instead to create an additional brand aimed at increasing its overall market share and complement its existing title.

Except that won’t happen. For all the talk of a new brand for a new target segment, i is actually going to be produced by the same journalists that work on the current paper. The reality for The Independent is that it cannot afford to actually create and deliver a distinct product for this segment. And even if it could, this elusive target segment wouldn’t buy it anyway.

The mistake that The Independent executives made in creating a new product that is clearly more concise and better value when compared to its traditional Independent brand is that the consumer does not look at the world relative to The Independent.

Only Lebedev and his team think that way. When seen from the market’s perspective, this elusive consumer sees smartphones as the most concise and best value way to get their news. The only consumers likely to be attracted to the new, better value “mini Independent” are current customers who are forking out a quid a day for the bigger, less concentrated, traditional version.

And look where that will leave The Independent. It has now doubled its output, increased its costs, spread its already small team of journalists even further and cannibalised much of its more profitable Independent sales to boot. That means that not only will i fail, it will leave The Independent in even worse shape.

Like most companies launching a “sister brand” to alleviate poor sales, The Independent is about to learn that the last thing it needed was a new brand. What it needed was a new approach to its old one.

At its launch last week, there was much debate about exactly what i actually stood for. Can I suggest irrelevant, ill-conceived and, ultimately, ill-fated.

Mark Ritson is an associate professor of marketing, an award winning columnist, and a consultant to some of the world’s biggest brands

Readers' comments (13)

  • With the advances in online publishing and in the era of handheld devices and smartphones accessing online content, you do have to wonder why a new newspaper is launching in the UK at the time when everyone is trying to predict the death of the printed newspaper.
    Read more - http://bit.ly/aIIzIX

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  • You nailed it: "the consumer does not look at the world relative to The Independent"

    This is the cultural curse of many traditional newspaper businesses. Their culture is not one that is in any way consumer-centric.

    In fact, many are not even product-centric - it's actually far worse than that:

    It's an "ego-centric" culture.

    Lebedev thinks he can win in the same arena where other media magnates have failed e.g. thelondonpaper, londonlite.

    He also seems oblivious to the very strong brand equity of Metro; a formidable (free) competitor in London, and nationally.

    I hope by now this is all starting to sound to the readers like a case of ego-centricism.

    I think "i" actually stands for Imperious.

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  • Could not agree more.

    Maybe this says more about the fate of traditional media as a whole. Yes Ford was able to turn itself around by focusing on its brand but can the Independent really turn itself around when the rest of the world is turning to the internet for their news.

    Perhaps this is more akin to the buggy-whip makers.. doesn't matter how good / cheap / differentiated you make them, if the market has moved on you are screwed!

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  • Spot on. They would have done better to reconfigure the whole paper and ditch the traditional approach, while keeping the old title (and the brand equity that comes with it... though maybe not the old visual identity).

    Not surprised though. Pre-Lebedev days I entered into discussions with the Independent about a paid supplement. Their arrogance and lack of realism was jaw dropping. Not to mention their offices: I've seldom seen a more depressed and lifeless bunch of people.

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  • Launching a new newspaper at a time when newspapers are dying out is crazy. At the very least you'd have thought they would have condensed The Indy into an app – on multiple OSs naturally – to at least try and look at how to engage a younger audience. Newspapers really do have a lot to learn about monetising new devices and platforms. And many could learn it on 16 November here:
    www.telemedia360.com

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  • I am sure your boldness will prove to be 100% accurate.

    The only way I can see 'i' lasting more than a year is if it goes free, and that will cannibalise even more of The Independent's revenue.

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  • An incisive piece Mark, and lots of food for thought, not least - how did Mulally get your personal phone number? Mind you, any story covering the newspaper industry is usually stimulating these days!
    To balance your views a little, yes I agree, i will probably fail, but think how much the business will learn, about packaging, target markets, pricing, the competition, etc. and not at huge cost, as overheads are covered , as you say, and 20p will help defray print, paper and distribution costs. An expensive piece of research, to be sure, but very useful. insightful, even...read more at www.contentetc.wordpress.com

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  • Think that's a bit harsh. I love i. It's just like the magazines placed in the middle of big Sunday papers and the ones I always go for first before lunch. I don't have a great deal of time, it's only 20p and I'm bored with reading news on screen. Good for reading in the bath. Try taking your Kindle, your iPhone or any similar electronic device in the bathroom/garden/crowded train.. I'm older than the target audience, so perhaps they just haven't got their demographics right, but there's something to be said for those companies willing to go against the tide of sheep going one way and one way only...Look at Apple's recent success after years of being criticised for not following the crowd

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  • There's an excellent page-by-page review of issue one of i here:
    http://snipe.at/media/initial-findings-on-i-by-the-snipe-commission-on-new-newspaper-launches

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  • The Independent may not be looking through the eyes of the consumer but I am not sure Mark Ritson does either, being, as he is, part of the media circle himself.
    I agree that 'I' may ultimately steal some of the Independents current readers but there are plenty of people who just don't have time in the week to read the full paper and therefore don't buy it at all. But sitting down with 'I' for a 15 min coffee break is worth the 20p spent. If you are at a computer screen all day the last thing you want is to have news delivered electronically as well.
    Metro may have brand equity in London but it's almost unheard of out here in the sticks and has limited accessiblity or relevance.
    Where the shortform Independent may fail is in not communicating it's presence enough - so far I have seen limited promotion and I am an existing Independent (weekend) reader.

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