Last week’s sale of the Washington Post is a cautionary tale for media companies, but not in the way you might think.
The obvious story is one of digital disrupting analog. But Silicon Valley shouldn’t be too quick with its schadenfreude for the newspaper industry. Being digital will not save technology based companies from the fate of the Washington Post.
The reason is what Ted Leavitt, in his classic Harvard Business Review article, called “marketing myopia.” It happens when companies lose sight of what business they are really in. In the early 20th century, many train companies failed when the car, truck, and bus came along because they thought they were in the railroad business instead of the transportation business. More recently, Blackberry and Nokia suffered from marketing myopia by thinking they were in the phone business instead of the communications business.
The 800 pound gorillas of Silicon Valley seem afflicted these days with a version of marketing myopia. And if they aren’t careful, they will eventually end up suffering the same fate as the Washington Post.
The signs are evident in the growing chorus of discontent from marketing executives at forward thinking brands. They are grumbling that Facebook and LinkedIn are turning into old-school media companies. These marketers want to find innovative ways to engage prospects and customers. But all the social networks seem to care about is selling display ads.
Facebook and LinkedIn seem to have have forgotten what business they are really in. Instead of marketing myopia, we should call it “marketing amnesia.” They aren’t failing to adapt to what’s new, they are forgetting what’s new and going back to what’s old. They are forgetting that they are in the relationship business, and falling back to being in the advertising business.
So now they seem just like the Washington Post, going from brand to brand, touting the attractiveness of their audience for advertising.
In the short run, it will work. There is enough money switching out of traditional
into digital channels that the cash register will continue to ring for a while. But not forever. Consumers are growing tired of advertising that treats them as passive audiences, and brands are looking for more collaborative platforms for social engagement.
There are two ways this might play out. One is that Facebook and LinkedIn (along with Twitter, Pinterest, etc.) will shake off this marketing amnesia. They will realize that the real lesson of the Washington Post is that it is unsustainable to simply “monetize an audience.” They will go back to being in the relationship business, not only between individuals, but among brands and individuals too.
The other option is that the social networks will continue to emulate the media companies they disrupted. This will leave the door open for someone else to come along and be disruptive.
If you are one such challenger, remember this: you are in the relationship business on both sides of your platform. Relationships among consumers on one side, and relationships between brands and consumers on the other. If you treat your community as an audience to be monetized, they will eventually go away. If you find innovative ways of including brands as members of the community, and helping them build their own platforms for engagement, you will succeed.
The Washington Post is a lesson, not in the triumph of digital over analog, but the end of audience and the rise of community. Let’s hope that our leading social platforms shake off their amnesia, stop imitating their broadcast predecessors, and remember what business they are really in.