Throughout history there are countless examples of companies that have gone out of business because as times have changed there is no longer a need for the widget that they produce.
As a matter of fact, when you look at the Industrial Revolution and the Technological Revolution there are entire industries that have become extinct.
It is obviously sad on a personal level. The human casualties of this kind of change are tragic.
To see the family farm that has been passed down for generations go belly up because new growing innovations has made it impossible to maintain the margins is heartbreaking. But to subsidize the farmer, to pay them to not grow, it just further creates a welfare state. It is healthier for the economy, and work ethic, to let evolution run its course.
During the Industrial Revolution, the world of automation eliminated jobs, businesses, entire categories. As much as that hurts, it has to happen for growth and development.
On March 9th, we discussed the closing of the Rocky Mountain News in Denver. It is a sad story but one of changing times. The newspaper, as a daily printed piece, is becoming obsolete. I mourn it's passing like everyone else. But, I realize that it is inevitable.
I was surprised and disappointed to read an article by Mike Hughes, President of The Martin Agency, "Do Some Good: Create Newspaper Ads" begging advertising agencies to spend money on newspaper ads. Seriously? I appreciate that his agency serves as the Agency of Record for the Newspaper Association of America. I realize that he is serving his client by spreading the gospel of newspaper. But seriously.
Newspapers as an industry have shunned advertising agencies for years. They are the only media that don't pay a standard 15% media commission to agencies when they place ads for their clients.
Newspapers are losing subscribers (and even worse readers) by the thousands every day providing less and less value to their advertisers.
Newspapers used to have a unique position of providing in depth news and fast. At least faster than a weekly or a monthly. That position is laughable now. The Internet can not only provide breaking news faster it can also provide more discussion by allowing the reader to participate in the conversation.
When looking at Branding it is important to "Change The Conversation". Mr. Hughes approach of just begging agencies to invest their clients hard earned money in a medium that provides so little return on investment is reprehensible. Advertising agencies can't save newspapers.
Newspapers need to change the conversation. They need to change the business model. They need to take what they do really well (investigate and report the news) and utilize new tools to do it better.
The newspapers that continue to hold on to the old business model will go the way of the dinosaur. It will be sad, but change is inevitable.
The Russo Group