September 2007
Beware the pitfalls….
A new study by the INMA of the alliances between US newspapers and the global Internet giants is thought-provoking, to say the least.
The USA is home to a series of alliances between newspapers and the three major Internet players, Google, Yahoo and Monster which, according to report author, James Khattak, are likely to appear in other markets in the foreseeable future – and Europe is a likely landing point.
Faced with dramatic classified revenue losses to online, many American publishers have opted for alliances with the online majors in their search for the ‘multi-media’ positioning which is so important to a 400+ year-old newspaper industry now being supplanted in many key revenue areas by a nearly ten-year old competitor.
The INMA analyses these ‘alliances’ and the need for publishers to protect their print franchise and develop an online franchise with long-term prospects, especially as the study concludes that, in the classified markets ‘ they are fighting a losing battle against online encroachment.
The issue is fundamental – and the study asks a serious question – ‘Will the Internet giants need newspapers in the longer term?’ It is a good question – especially as there are few, if any, precedents for enduring brand alliances.
At MatchWork, we have a healthy respect for the achievements of the online majors - but recognising that they are more competitive than they are complimentary to newspaper brands is fundamental to our business philosophy. Simple business logic tells us that newspapers will become progressively less important ‘partners’ in the Giants’ online revenue-sharing alliances. These ‘alliances’ look so promising at the outset but the open question is if there will be room for sentiment if the relationship becomes increasingly lopsided – business is business, after all…
Branding is the key – it always has been, and strong brands survive and prosper, weak brands decline and disappear. Perhaps the INMA’s message, ‘Beware the Pitfalls’, deserves some serious thinking time.