Publishing has Adapted to Competitive Change: Time for the City to Follow Suit?

Historically, the success of the City of London probably has little to do with marketing, at least not marketing as it is traditionally understood. But this may well be changing, possibly quite rapidly. There is no shortage of major cities that seek to challenge London's supremacy. If another global financial centre is developed, it will probably be in Shanghai. To keep its position, it may well be that London will have to market itself much more actively, both through the actions of individual companies and, collectively, as 'the City'.

It may be worth drawing a parallel here with London's 2012 Olympics bid. It was no accident that the London bid team was heavily staffed by marketing professionals. Like all good marketers, they found out what their customers – in this case the IOC delegates – wanted, and that was to focus on sport itself. They approached the bid as they would a marketing brief. The film that London ran, as compared with that of Paris or New York, depicted sport at its most pure, simple and aspirational. A triumph for clear-minded, sharply focused marketing.

So, it may be that now is the time for the City consciously to take marketing more seriously. And of course, this must embrace a very wide range of professional services: investment banking, legal services, property related services, insurance, IT, telecoms, management consultancy, and so on.

Economies like India's are gearing up to become major exporters of services. If – or rather when – they succeed it could have the same dramatic effect on our economy as the Japanese had on manufacturing in the 1960s and 1970s. How long will it be before a Chinese bank buys a western investment bank? With both Bank of China and ICBC planning to float internationally next year, and thereby placing themselves among the world's biggest banks, the answer to the question is: probably quite soon.

We should not underestimate the potential impact on our economy of genuinely global competition in services. Three-quarters of the British economy is based on services, and one in four workers in the UK is engaged, in one form or another, in professional services.

Clearly, to stay ahead we must build upon all our existing advantages. It may be harder perhaps to develop new ones, especially in fields like marketing that cut across some of our traditional, and not always helpful, attitudes and assumptions. Historically, with an empire at our beck and call and with little need to reach out to new markets – for example, to learn their languages – we have not always been especially good marketers.

I know for a fact that it is certainly true of the sector I now work in, namely publishing.

When I returned to business, and looked at the state of UK magazine publishing, I wondered how well those four pillars of marketing – price, product, promotion and place – were holding up. I concluded that they were necessary but not sufficient to meet the new challenges.

PRODUCT

So far as products are concerned, there has never been greater confusion of choice among competing products and services. Nearly every commercial sector and market segment is being slivered into ever-thinner slices. The internet already provides infinite examples – just ask the music industry, auctioneers, travel agents, insurers, publishers. Every product suffering from underinvestment in its development, not least in its marketing, is being commoditised by this. The only remedy seems to me to be continuous patient investment.

PLACE

I will not dwell here on the particular challenge to news-stand publishers posed by the onward march of the big retailers. I would rather focus on the opportunities we all now have to reach ever-wider audiences via increasingly capable, user-friendly electronic media like the internet.

The clear-out of middlemen predicted when online shopping and trading started ten years ago is now happening on a vast scale; eBay, Amazon, Monster and so on are just the sharp and visible tips of this.

So far as publishing is concerned, if your content is valued, the internet is neither a graveyard nor a zero sum game, but a wonderful opportunity. In my business, I am finding that trusted brands like Autocar and What Car? are going from strength to strength now that they are online and available in hard copy across the globe.

PROMOTION

This P has changed most during my time away. Every communications medium has fragmented in pursuit of ever-sharper focus on ever more specialised and harder-chased audiences. The resulting detriment to content quality is most evident on TV and radio (so many channels, so little worth watching) but it is universal. It is more than just dumbing down; it is production values made slave to niche economics. Nevertheless, the opportunity to differentiate yourself by providing content of exceptional quality is there for those bold enough to step (and spend) apart from the herd.

Content, including advertising, is becoming more bite-sized, targeted and accountable. One of its aims is to draw more information from its audience through increasing degrees of interaction.

This is contributing to a proliferation of personal and professional communications, leading to information overload and the rise of all kinds of data sifters and sorters becoming the new information mediators and editors, such as The Week and Ask Jeeves.

PRICE

Everyone wants their product to be premium-priced but, with China, India and Eastern Europe joining the list of high-quality suppliers, most sectors are in such oversupply as to find themselves experiencing perpetual downward pressure on prices. In a world of oversupply and, in Europe at least, frighteningly high restructuring costs, volume becomes paramount, with price-discounting and camouflaging becoming the norm.

In an industry as innovative and as transparent as publishing, where barriers to entry, especially online, are low and falling, there is inevitable pressure on prices: great news for advertisers, a daily wake-up call for media owners. I doubt that professional service providers will for long find themselves any better protected.There are 65,000 Chinese undergraduates in the UK, and we may safely assume that they don't all want to work in manufacturing.

THE FUTURE: THE FOUR RS

Looking to the future, what useful marketing rules of thumb are there to complement if not replace the four Ps? If my recent experience is any guide, for service providers like ourselves, there are four Rs.

Reach

The first of these is reach. Since the internet became a global reality, almost everyone has the ability to become a global player. It seems to me obvious that to compete with such entrants into our market, we must learn effectively to enter theirs. If we don't, our rivals will enjoy economies that we will lack.

The car manufacturers, telecoms suppliers and plane-makers have long known this, but I wonder if the penny has dropped with service providers.

Response

My second marketing R is response, and there are two elements here. First is the ability to move swiftly. When you develop a potentially successful service, you should get it out as far and as fast as possible before others copy, improve or even steal it, recognising that service sector intellectual property is usually quite brittle.

Eight years back into business, I find that any window of opportunity I think I am looking through turns out to be smaller and harder to open than I first thought. To climb through it, all kinds of devices have had to come into play, like overseas partnerships, content and brand licences, and brand-leveraging ancillary products. The instant you break cover, what you thought was your opportunity also becomes your rivals'.

The second element of response is the need to demonstrate to customers that you live up to your claims. This is especially true for media owners, who must show that whatever it is that their titles are acting as a hoarding for, gets sold. It can be antique cars in Classic & Sports Car, perfume in eve or marketing jobs on Brand Republic. If it works, people notice. If it does not, ditto. More effort is going into ensuring good quantity and quality of response. If you don't have robust measures of the advantages you confer on your clients, you will have problems.

Retention and Relationships

My third R was a coin-toss between retention and relationships.

Consider retention. We all know that the cheapest-to-recruit customer is an existing one. Whether you are selling add-ons to what has been bought already or new products, the aim is the same: to confirm the customer's original belief that he comes to the right place when he comes to you.

Saying is easier than doing. Many fields, including some financial services, suffer from high rates of customer churn. It is the same in publishing where subscription marketing is now, for many publications, a survival skill. But if the retention of customers, values and employees is primarily a marketing communications issue, it is fair to ask whether it is treated as such. I doubt it is always the case.

In a world where customers are less trusting and look increasingly to friends and family for referrals, word-of-mouth marketing has become critically important. This has long been recognised for low-priced items like books, films and music, and even more important in high-priced fields like private medical and legal services. But how many businesses consciously build word-of-mouth possibilities into their marketing plans? How many even know how?

My alternative third R is relationships, not least since they are the sine qua non of retention. It goes without saying that building relationships is vital in business no less than in life, and the tools available for building business relationships have never been sharper.

This may be the area where magazines score highest among media. The well-crafted page is cosier, more familiar, more controllable and trustworthy than the screen. It slows the pace and comes into play when the user chooses. By comparison, screens, with their pop-ups, buttons and other clutter, can be impersonal, intrusive and add to overload.

Renewal

My final marketing R is renewal – of every aspect of the business, continuously reaffirming its values, reinvesting in its products and processes. I urge this not in any messianic way, but from the simple belief that it is generally harder for competitors to hit a moving target.

I have always felt that running a business has something in common with riding a bicycle – the slower you move forward, the harder it becomes. It is always mistaken to believe propaganda, especially your own.

Falls from grace are generally preceded by a period of self-satisfaction, a blindness to gathering realities, a decreasingly justified self-belief. In other words, just the kind of thing that happens after someone has told you that you have overtaken New York as the world's number one deal centre.

This article featured in Market Leader, Spring 2006.