The third in the series of blogging from the hospital bed while the Bee and the newbie sleep.
Yesterday The London paper – News International’s London free evening paper – announced it was closing up shop, having made 14Million in revenue last year I was shocked that the paper had a loss of almost 13 Million and 16 Million in losses for the 10 months before that. What the…? 28Million in losses in less then two years? WTF?! Anyone who’s picked up a London free sheet like the London Paper knows that there is pretty much an ad on every page. Different sizes, shapes, frequencies, most of it irrelevant to the copy. It would have been nice to see The London Paper publishing the Heathrow diary by accomplished writers as I discussed earlier, or trying to create value for advertisers through focused content. Instead they focused on maximising ads on their sheets.
At the same time a number of publishers in the online market are experimenting with larger ad sizes. The idea being that more ad space is better. There’s an interesting article on Ad Age about why this is a bad idea. Again it would be nice to see some marketing innovation, getting publishers to work more with advertisers to do more content of interest to users.
The media business needs to rethink its business model. Advertising in its traditional current format needs to change.
But I think destruction and creation is going on beyond the media business, there’s an interesting article in the FT about the healthcare crisis in America and how hospitals and doctors have specialist after specialist come in and people get charged ludicrous amounts, mostly to avoid the potential for malpractice suits later down. The healthcare industry is so focused on this that it’s not comparing costs to value. The article had a great line;
“We have volume without value. There is no direct correlation between good health and higher hospital costs, doctors’ payments, drug prices and administrative costs.”
The gap is another company that has focused on volume without value, Gap is being pushed by the likes of Uniqlo and initially responded by adding more lines, more colours, more stuff. Volume without value. And sales haven’t turned with this strategy. So Gap’s now dropping lines and simplifying it’s offer, but is it too late?
Organisations all over the world, in whichever sector, should focus on doing different things, but less things to control costs and try to maximize demand, innovative things, create value and not worry about the volume of offerings they have.
