Economic Barometers

One of the few plus points of working stupid hours over the last few weeks is getting cabs home [checks to make sure that no-one from The Telegraph reads this]. Not just because it's easier than dealing with the pissed people on the midnight tube, but also to get a view of London's economy from the people who know it best - the cabbies. There's a noticeable difference from the last pitch I worked on back in February, when people were still queueing for cabs at 11pm and the cab drivers' general feeling was that nothing much had changed outside the City since 2008, and now, where a guy who picked me up at 11.30 said he had been on his shift since 10 and I was his first fare. He was lucky: 5 cabs had come past with their lights on while I walked from Zenith's front door to the street.

Theatre kicking-out time in Covent Garden is evidence of this: where 3 months ago an orderly cab rank would form around the time of the end of a performance, there is now a melee of taxis fighting to cut into the entrance to the rank. A couple of people I've had lifts with have seen fights breaking out in cab ranks - in 2009 this is amongst the cabbies fighting over fares rather than punters fighting over cabs.

Anyway, I tend to take cabbie sob stories with a pinch of salt, but although media has been feeling pretty bad this month, there's a lot more people worse off....

Asda: Cheap is good

Smile - ASDA's rolling back more prices from Razorfish UK on Vimeo.

So I mentioned the other day that I'm surprised how few brands are actually asking how they can help people in this recession. Not saying x% off, or 'buy some get more free', but actually asking what they can do to help. I know that this is mostly because brands are just as short of cash as people this year, and marketing folk are the ones whose budgets are at the sharp end of that shortage. Still, if your positioning is all about 'cheaper' then brand image advertising must be a challenge, but the alternative has always looked like Ryanair

Which is why I love this Asda home movie by Razorfish London - it looks genuinely like a spoof, and it absolutely nails Asda's whole positioning in a very meta 'advertising about advertising' kind of way.

Whether I would have seen it if I hadn't been reading Razorfish's marketing director David Deal's blog, I don't know. I'm probably not Asda's 'target audience'. But I can't see it on YouTube, so I'm guessing that this is a campaign that is still to hit TV

Why aren't brands asking this?

Respect to Camden Council: it's the question that everyone wants an answer to.

(and another question: why is this the highest quality photo that my Blackberry can take?)

Telegrams to the future and selling your soul: two extremes

ReadWriteWeb have done a bit of digging into the Magpie ad service on Twitter. If you haven't come across this before, it is basically a service that pays normal Twitter users to tweet on behalf of brands (usually for discounts, offers or special deals). Because the links are hidden behind a link shortener, like all links on Twitter (unless you make the very easy and free upgrade to PowerTwitter), you can't see where the link is directing you: ie the Magpie redirect gets very well hidden. The brands that are using the service, and attracting the fury of RWW, include Apple, Skype and Flip (well realistically its probably affiliates that get paid to shift coupons, but it is still on behalf of the brand).

Personally it doesn't bother me that people will take a few £$ to pass corporate messages on using Twitter, as long as they come with the #Magpie tag that the service recommends (I am pleased that I don't know if they tend to or not as i haven't come across them outside of tech blogs though). Where it starts to get a bit suspicious is if they aren't clearly marked: of the list in the RWW article only two of the Apple examples use the tag. Aside from the dubious ethics of taking cash to persuade your friends of something that you don't believe, this is also a pretty shaky legal position. Or at least it is in the UK, where it is illegal to post positive feedback on behalf of a brand that you are working for without full disclosure of the fact that cash is involved (whether as a one off payment or an agency relationship). (I'm sure it is elsewhere as well, it's just that I know the UK ethics and laws better). Which makes the international nature of brands and the internet, not to mention people's Twitter networks, a bit of a moot point. This is clearly advertising, and if people using the service are 'conveniently forgetting' to add the tag, then surely the responsibility lies with Magpie to comply with the laws of ALL the countries its messages are being viewed in?
In happier news, the Imperial War Museum in London has taken a novel approach to the recession by marketing money saving tips from World War 2. They are set up as telegrams to the future from a character called Mrs Sew&Sew, the Ministry of Information's voice of 'Make Do & Mend' in the 1940s, published onto a blog and a Twitter feed. While the recession tips give a very 2009 saliency to the War Museum, I love the incongruity of this very 40s voice appearing on Blogger and Twitter, alongside tip sheets like this one
While I can't see a huge amount of spreadability in this idea, it has taken an objective [sell War Museum tickets] and a strategy [bring to life the similarities between the Home Front and a Recession] and set about achieving them with warrmth and intelligence. Which makes it a refreshing change to the duplicitous stuff that Apple and Skype are involving themselves in
(HT to Brand Republic for the War Museum link)

Virgin Mobile says Screw You Recession

Ok there's a big recession on, Virgin Mobile Canada offer cheap calls and low line rentals, people are looking for tips on how to save money. So Virgin provide some in this blog, and give it a big provocative title

Screw You Recession

that plays well on urban billboards. Sounds simple, but what makes it work* is in the quality of the writing; it's basically what a few of your mates would write if they were really good writers (which obviously these guys are, as they are professional copywriters.....) doing it for a laugh.


There's also some geniune research to give the papers an angle

   Current Mood: Yellow "Sorta' Freaking Out Right Now"

-   Biting nails - 72% are anxious about their future
-   Brand disloyalty - 41% have given up a brand they love
-   Show me the value! - 52% are open to trying value brands
-   Chic-onomics - 88% have changed their shopping habits
-   Recessionistas - 42% are making "noticeable sacrifices"
-   Unemployment - 42% fear being unemployed
-   Politics - 57% say they don't believe a change in government
    would change anything
-   The Simple Life - 75% want a simpler life

(Here's some serious stuff: Virgin Mobile asked 1,500 Canadians
 during Q1 of 2009, aged 17-35, to rate their confidence, fears,
openness to change and habits during the current recession.)

*I don't know if it is working in the sense of actually selling phones, or even if it is picking up much traffic (there's 114 comments on a 'Tips to screw the recession' post though, which suggests there are people reading): my Canadian web trends access isn't up to much, and I kind of think that Alexa isn't really a valid measure for this....
(hat tip to Marta Kagan for the link)

The story of a newspaper on death row, as told to the executioner

(from Time)
The Seattle Post-Intelligencer, losing $14m a year and put up for sale with virtually no hope of finding a buyer, has turned to running a company-wide blog about the 60 day countdown to closure

You are. Is it? Does Independent mean digital only?

Ok I wanted to come up with some awe-inspiring 2009 predictions about the future of media, advertising and the meaning of life (well, my geeky advertising techy life anyway). And to be fair I got a few…and then read what Peter Kim was curating, and it didn’t seem so groundbreaking any more. So looking at next year there was one over-riding theme

Well, hopefully not, but you know what I mean. But with all the talk of closures, losses and other economic related FAIL, one theme that seems unavoidable is that there is going to be a big casualty or two in the UK. And casting around for candidates throws up some unpleasant thoughts. In previous recessions, companies that invest in and build their brands have tended to grow at a greater rate in relation to competitors than they would in normal economic climates – due to less competition, greater share of voice, lower cost of media, etc. Actually The Economist sums it all up here

Ads on Edge

View SlideShare presentation or Upload your own. (tags: branding recession)

Obviously not everyone can afford to invest in their brands (that’s how the theory works: if 70% of your competitors cut their marketing budget as other costs are fixed, then share of voice is there for the taking. The 30% will see the benefit of their consistency through the years of recovery. Sorry for lack of links but it’s all in the slideshare deck). Amongst the traditional great and good of the UK media scene, there’s clearly some that can and some that can’t afford to invest, so those that are already struggling are where the first casualties will come from.

The TV market has its back firmly to the wall at the moment, but although I have been sceptical of Thinkbox in the past, they are absolutely right in saying that the country will be watching a whole lot more of it next year. Although that doesn’t mean more income for broadcasters, the model is far from broken, and (ITV share price aside) the big players will batten down the hatches next year.

Looking at the world of national press is more frightening though, as the medium has been managing decline for many years. Looking around for the weak and vulnerable here brings a bit of personal sadness here, as my introduction to the world of media agencies a few years ago was as a sales rep for The Independent, and state of my former employer now is downright scary.

Circulation on going fully tabloid (Jan - March 04) - 258k
Current circulation today - 201k

Full price UK circulation 2004 - 223k
Full price UK circulation today - 119k
(all figures Audit Bureau of Circulation)

Massive underinvestment over the last few years has meant that the world of digital sailed past without anyone noticing. The gulf between the Indy and the Guardian in press looks big, while the digital gap looks insurmountable.

Having spent a year of my life trying to convince people who really don’t care one way or the other of how great The Indy is, some of that has clearly sunk in and I’m struggling with the negativity of writing this…

So instead I thought I’d have a look at what can be done about it.

Well first you can’t manage decline in 09….

Reducing overheads by sharing office space and support staff is clearly a vital move to buy time, but looking at the figures it won’t buy much. Putting the cover price up from £0.80 to £1 seems totally short-sighted unless the additional sales revenue was needed to keep the paper afloat THAT WEEK. Otherwise it just gives the ever-decreasing readership an opportunity to reconsider the newstand and see whether their brand loyalty is worth a 25% price hike in a climate of cutting their outgoings.

The Indy titles are as or more dependent then their better funded competitors on Retail, Finance and Auto categories, and it doesn’t take Nostradamus to predict that there won’t be much ad revenue from there next year.

(% of ad revenue from Finance/Autos/Retail)

I think there is a real opportunity here to change the game. Other than genius, the main advantage that Apple have had when revolutionising first music retail then mobile phones was that they weren’t trying to protect a legacy business. There were no existing vested interests to water down the business model, the design, or the idea.

So this isn’t the case for the Indy, but if you have a brand that will probably not be here this time next year unless it does something radical, and is already a loss-leading figurehead for a larger global plc, then you are going to have to think like that.

Fixed costs for a newspaper are all based around content (journalists), production (paper and printing) and distribution (physically carting the thing out to newsagents to try and sell to people who are busy checking their RSS feeds). None of this will change just because there is a recession on (except they will all be housed in a different building and their accounts done by the Daily Mail). All that has changed is that their scarcity business model is no longer valid. Income on the other hand is reliant on copy sales (down: see above) and ad revenue (down: see the news). Both hugely variable and not in a good way. Now this isn’t the first time that the paper has found itself in this position: the launch of the tabloid in 2003 was said to be a last ditch attempt to save the paper, and it not only worked, with sales up 21% after the first year, but it was copied worldwide.

And this is all totally consistent with the values and heritage of the brand. The Indy was launched as a response to a formulaic rightwing royalist press in the 1980s, and has tried to break the mould whenever it could afford to since. The viewspaper concept of running single issue analysis-based front pages, the avoiding all royal family coverage, taking minority sports seriously, anti-Iraq war, all innovative stuff for a newspaper. However having run with the idea that we don’t need breaking news on the front page of a paper as we already know it through 24-7 media they failed to invest in the sort of 24-7 media that would also allow readers to choose to opt in or out of all the other innovative stuff. They are failing because they aren’t being true to the brand. The ad campaign that launched the paper drove sales of close to half a million by asking

It is. Are you?

Now the tables have turned.

You are. Is it?

Because the core readership for the Indy is still far younger than the Times and Telegraph, and more financially literate and business orientated than the Guardian. Young, affluent and techy. Brands’ favourite people. But not people who like turning up for work with ink on their fingers.

The Indy isn’t the only one to feel the pinch though: according to a recent column, former Guardian editor Alan Rusbridger believes local papers should be supported by public funding. In France print unions seem serious in suggesting that Google owes them a living now that out-of-date scarcity business models can’t support them any more.

So what is the solution? Scott Karp talks about newspaper execs having to think about how they would survive if forced to move out of print. This is exactly what those established US publishers that he is referring to should be doing, shoring up their digital assets and looking at how their brands will maintain a share of the revenue that moves out of newsprint. But not the Indy: it is too far behind the digital curve already for digital revenue to make a difference. They need to think what Apple would do. Okay, probably not quite as cool as what Apple would do, but think about how to redefine the category. What replaces print? It needs to be as mobile as print, but as connected as a mobile. So a mobile then? That really doesn’t do it justice: reading heavy text-y articles is about the least fun you can have on the mobile internet and is only marginally less bad on a proper browser like the iPhone.

The Kindle on the other hand was designed for reading text. So was the wave of competitors sweeping in from Japan. None have launched in the UK yet, although the Kindle has taken the US by storm this year. They make newsprint sexy again (or is that just booky-geekness?) One of the most profitable areas for a newspaper publisher is subscriptions: if you make sure readers pay you something every day, it doesn’t matter if it isn’t very much. The Telegraph for instance does 25% or so (might look it up and post a correction, but it's getting late...) of its total circulation through subscription – readers guaranteed every day. Digital print reading devices have no advertising model. If someone decides to bring them into the UK on an adfunded model then it is not out of the question that they could persuade some media agencies that 25x4 ads, or the 5” screen equivalent, were a more realistic way to advertise on such devices than banners. And that this could then be added on to press campaigns that would formerly have run in newspapers…..

So if you can maintain the variable income such as it will be in 2009 by maintaining ad revenue in a way that looks like print, but cut the fixed costs by not printing any more and distributing digitally, then the economic model starts to look more robust. Except of course no-one has a Kindle, and as I've suggested above a mobile phone, even an iPhone, won't cut it. So how about The Independent moves one step ahead of the game into the technology business. Skip all this creating digital content that their traditional competitors have been mucking around with. Don't worry about trying to be a TV channel. Just provide a subscription model that includes the cost of a year's worth of content (which in an attention economy of course is free really, but let's take this one step at a time) and more importantly a device to play it on. Oh, and do it in time for Xmas, as it will be a great gift. Doh!

This is a little bit slash and burn as survival plans go, and does beg the question what will be the strategy in 2010. But the brand will still be around then, some of the staff might still be employed, and the future of newspapers will be rewritten. And if the 2010 plan doesn't work, at least you went down fighting. Good luck!

Advertising and recessions

I like this.... and not just because i've been talking about the same reasons to carry on spending through a recession for the last few months in just about every meeting i've been in!

The FT Advertising in a Downturn resource that this is advertising has a good mix of McKinsey and PIMS data, so hopefully it is going to reach a good number of FDs.....