I was spoke to an MBA class last week on alternative media. I followed a colleague from CBS Outdoor - one of two major billboard companies in Canada. He mentioned how his industry, after years of profits and promising growth, had a major crisis after legislation was passed that banned the advertisement of tobacco. It turns out the tobacco industry loved outdoor advertising. They booked all the space they could get. It must have been great to sell this stuff back then - inflated demand due to a client not bound by price or consiense. But this all came crashing down. It hit the billboard companies hard. The industry was so busy focusing on its current success that it didn't foresee the possibility of change. They should have learned a hard lesson from the tobacco crisis: they're not in the billboard business, they're in the ad delivery business. I wonder if they have considered the trend arising from Sao Paulo, Brazil - where in 2007 the city banned outdoor advertising.
The tobacco crisis caused a change in the industry. It could be argued that this change should have occurred prior to the crisis. Didn't anyone notice all the advertising eggs were in one basket? You can't blame them - this is the way most industries think. Case in point: the newspaper industry.
The newspaper industry is in crisis as more readers go online and more advertising dollars go with them. Papers across the continent are disappearing. It started with the top heavy publications and has trickled to the local level. Newspaper journalists and lobbyists are scraping for solutions. Most are way off the mark. They continue to look at ways to bring the newspaper industry back to where it was. This can't happen. The world is not what it was. Time to think different. Take a step back from the tangible product you deliver and look at what value you provide. The value this industry has provided is not built in the actual newpaper. The value is in trusted local news delivery. The problem is that a decade ago would have been the time to recognize this, now millions of bloggers and online communities make it their daily mission to deliver trusted local news.
These two examples of industries blinded by success bring me back to a story I heard years ago. If we go back a couple of decades the rail industry is the legacy example of industries failing to understand their business. The rail industry was booming when it began. It moved people, food, products, and mobilized industries across the continent. Then the Wright brothers had to screw it all up. The introduction of commercial and consumer flight cannibalized the stronghold that the rail industry had on market share. Rail companies scrambled. Doom and gloom filled board rooms and rail yards. They have survived, but have not recovered to the silver lining of those early days. Maybe disaster could have been diverted. Just like CBS is in the ad delivery business and newspapers are in the trusted local news delivery business, the railroad was never in the rail business -it was in the transportation industry.
In hind sight it is easy to see the lost opportunity. But what opportunity are you missing because you're too focused on what you’ve always done (who cares that you are successful). What problems will your industry face because it continues to define it's value based on what last years profit told it.
You don't need to be in business for 30 years to understand that there is a great chance that tomorrow won't be like today - so why do we act/market/advertise/plan that way?