Crain Communications isn't the highest-profile media company, but each week its publications—including such titles as Advertising Age, Crain's New York Business and Automotive News— are must-reads for busy executives. Since 1971, Rance Crain, a son of the founder, has run the 92-year-old company in partnership with his brother Keith; Rance also serves as editor in chief and columnist for Ad Age. In the latest in his series of interviews as part of NEWSWEEK's partnership with the Kaplan University M.B.A. program, NEWSWEEK Chairman Richard M. Smith spoke with Crain. Edited excerpts:
Smith: Your family has run the company for nearly a century. Does family ownership create problems in attracting top managerial talent?
Crain: They know they can't get the top job, but on the other hand they do know that if they come in as publisher they get to run their own show. My brother and I don't constantly look over anybody's shoulder. Autonomy attracts good people.
Over the last 10 or 15 years, the publishing business has favored rapid start-ups, mergers and acquisitions, and big bets. Is it fair to say you prefer a more patient approach?
Yes, and that's one of our real advantages. It took seven years for Crain's New York Business to get into the black, so we have a lot of patience. We have a start-up now, Financial Week, that got off to a not-resoundingly-successful start, but we think we've got the right editorial product and we're continuing to improve it … There's lots of advertising out there that wants to reach our audiences, and if we get the editorial product right, there's no reason they won't be successful.
Let's turn to advertising issues. A common thread running through many of your columns is how to build a brand. Obviously the tools are changing, but is building a brand any different today than it was 20 or 50 years ago?
In many ways, I don't think it is. You've got to represent what that brand really is, and that doesn't change because the media changes. Search engines don't build brands … You also have to be consistent in your brand-building through all the media that you use, whether it's the Internet, traditional advertising, word of mouth, conferences or product placements.
You've quoted Peter Drucker saying, "The consumer is the boss." That sounds so simple, but why do managers often forget that?
Because they think they're the boss. When a new ad agency or new chief marketing officer comes in, they want to put their own stamp on things. They'll make changes that might not necessarily be the essence of the brand … Take an example from brands of cars. Volvo is safety. Every once in a while the Volvo people want to be something else. They'll say, "No, we want our cars to be known as beautiful or sporty." But that's not what people think. People think, "No, Volvo is safety."
A lot of CEOs come into their jobs without experience in advertising. What should they know about advertising to supervise their agency or their own marketing people?
They should know about marketing strategy and how you position brands to be different one from another. You need to avoid having brands represent the same things, and consumers' not being able to figure out which brand is which. The U.S. car companies have this problem. What is a Chevrolet these days? What is a Buick these days? Buick is all over the lot. They're changing their slogans every year. The latest slogan for Buick is "Drive Beautiful." What does that mean? Brands need to be consistent and live up to their promise. I wrote a column recently about Tylenol. They have this spiffy new ad campaign that shows employees who make Tylenol on the assembly line. The ad is saying, "We put our love into Tylenol." A lot of people wrote in and were upset. They remembered the cyanide poison scare. They said, "We don't want anybody putting anything in our Tylenol." People remember those things.
When advertisers aren't held to high standards, where can bad practices lead?
Let's look at where they've already led. I believe that the advertising industry has to take some of the blame for the subprime mess we're in now. Sure, people wanted to get in on ultralow rates to refinance their houses. But I think that a lot of the financial companies glossed over a lot of stuff that should've been brought to the attention of the public … I think that advertising and marketing in general has a very important role to play in urging consumers to be more cautious about how they spend their precious money.