Toppling Goliath: An Online Roadmap

In the brave new online world, the traditional advantages of building on an established offline brand have diminished. Instead, opportunities abound.

Yes, conventional wisdom would favor the established market presence, with years of brand equity and a loyal customer base of the offline brand as an often insurmountable edge in an online world. But the counterculture spirit of the Net-centric universe has proved that this legacy is often a disadvantage.

Amazon’s spectacular rise has shown that behemoths like Barnes & Noble are vulnerable, and that upstart Internet-born-and-bred alternatives are often the favorites of netizens who relish supporting their own home-grown brands.

Much attention has been focused on ecommerce, where upstarts like CDnow, MusicBoulevard, eTrade, Datek, and eToys have made major assaults in out-marketing their offline rival’s efforts on the web. But less has been written about the challenges content and information web sites pose in out-marketing offline entities like magazines and even TV. Some insights from Jonathan Greenberg, the CEO of GIST TV, will illustrate how a successful assault to TV Guide was planned and executed.

TV Guide represents a unique opportunity in the world of magazines, with an established billion-dollar brand that has never been successfully challenged offline. In its orbit is no dominant number two or three brand, even. Perhaps TV Guide’s confidence even played a part in its uninspired effort to reinvent its brand for the web.

In developing GIST TV for the web, Greenberg was well-positioned to understand the inner workings of a magazine institution, having spent the 1980s as a reporter (and then consultant) for Forbes Magazine, where he initiated the Forbes 400 “Rich List.” In the mid-90s, Greenberg rushed into what he saw as a golden opportunity: To establish mind share through the Internet, in a promising new market, creating a purely new media product to compete with a gargantuan powerhouse steeped in old media traditions. Much of his experience will serve as a useful roadmap for others willing to take the plunge.

First, begin with a product that is inspired and developed from an interactive perspective. Make it one that reflects the numerous attributes of the web and the prejudices of the user base. In the case of GIST, the three dominant characteristics were convenience, speed, and personalization.

Focus your content and brand personality on the heart of the ‘net demographics/psychographics; the web efforts of offline media brands often look like something only old fogies would use. Conduct research and focus groups and hone in on the specific information needs of those who truly live the interactive lifestyle. Also, interview users of the offline brand who can give insight into what’s lacking. Then analyze how utilizing the web can produce the enhanced experience.

Second, move quickly. First-mover advantage has proved to be a powerful edge in the Internet. And, traditional brands are often weighed down by their corporate baggage when financial types overtake the creatives in setting strategy, thus detracting from innovation.

“Every nine months or so I tell my staff that if we don’t reinvent our service, we’ll all be out of work within a year,” says Greenberg. “We’ve created a short, bleeding-edge lead on our gigantic old media competitor, and as long as we don’t stop recreating that edge, we’ll maintain it.”

Traditional brands, Greenberg believes, can be slow to move into uncharted waters. Their internal fears of self-cannibalization outweigh the realization that it’s smarter to overtake yourself than to be overtaken by others.

Offline brands also tend to transpose their offline product directly onto the web without re-thinking and re-shaping their product from a cyber-skewed perspective. Target the ‘net demographic and psychographic young techno-philes, who live to personalize, customize, and tinkerize your product.

Third, gain impact and clout through partnerships that overcome your initial lack of brand status (and often under-financed coffers). GIST’s early partners included NBC, the Turner Networks ,and AOL’s Entertainment Asylum. All of them helped GIST gain the eye of major players including Yahoo, who, early in ’98, replaced TV Guide’s site with GIST.

In cutting these deals, the primary goal early on should be to achieve strong co-branding and to associate your brand with established brands that appeal to the user base you want to attract. Revenue splits and traffic are important. But initially, they are not the key concerns.

Finally, make innovation and change a core principle of your company. Lest you find yourself marked as the web institution out-marketed by the latest hip upstart. And when you notice yourself being copied by the institution you chose to supplant, you’ll know you arrived.

But, don’t spend too much time congratulating yourself. Instead, make sure you’re pointed toward the future, where creativity and innovation are equal to financial benchmarks in maintaining a forward-thinking mode.

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