Magazine article Marketing

Mark Ritson on Branding: Resisting the Inevitable

Magazine article Marketing

Mark Ritson on Branding: Resisting the Inevitable

Article excerpt

Guardian Media Group will ultimately regret its decision not to close The Observer newspaper.

The good news came in an email from editor-in-chief Alan Rusbridger last Friday. After much internal discussion, Guardian Media Group (GMG) had decided not to close The Observer. Instead, operations will be streamlined in a bid to cut costs and save the 218-year-old title.

With newspaper ad revenues in freefall, and The Observer's circulation dropping by a further 7% over the past year, many media pundits were predicting that the paper's days were numbered. Nonetheless, GMG, which also publishes The Guardian, and made a loss of pounds 37m over the past 12 months, has opted to keep the brand alive. This is almost certainly a mistake.

No one likes to see something with more than two centuries of history disappear. However old brands sometimes die, just as surely as new ones come into existence. Often the last people to realise that a brand is dead are those managing it.

Let's start with the fundamental problem. The Observer has been losing money for years. Even at the start of the decade, when its circulation rose to almost half a million copies, the paper was still costing GMG about pounds 10m in annual losses. Regardless of the current crisis in the news media, The Observer has been a lost cause for years. It might still claim 400,000 readers a week, but who cares about sales? Profit is the only headline that counts.

The Observer is haemorrhaging readers because, in my view, it is not as good as the competition. That situation will only worsen as a further pounds 10m is cut from its editorial and commercial operations. Any fat was stripped from the title long ago, so further savings will come at the expense of the quality and competitiveness of the paper.

That competitiveness will be further undermined by the widely covered discussion about The Observer's future. There is a vicious circle that affects any brand whose future is so clouded in doubt. Its appeal diminishes, its profits shrink, questions about its longevity are raised, and more consumers begin to question their loyalty to a terminally flawed brand. The same fate that afflicts Northern Rock and GM's stable of car marques will engulf The Observer too.

However, the biggest argument for the extermination of The Observer has nothing to do with that newspaper at all. Its stablemate, The Guardian, is the real reason that the Sunday title must die. Weak brands take up managerial time and company resources, and even a big organisation has a limit on both. …

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