Short circuit instead of long breath
Business Models: The bankruptcy of Cracks for Kids raises questions about cooperation with long-term partners.
Business models The bankruptcy of Cracks for Kids raises questions about cooperation with long-term partnersThe facts are well-known and alarming: the children's Sunday newspaper Cracks for Kids (CfK), launched by ex-Tamedia publishing manager René Gehrig with a lot of passion, equity and partner goodwill, ran out of steam after just three months. A flop with a signal effect, because in the current risk- and innovation-hostile press market, financial and idealistic key supporters are becoming increasingly existential, especially for niche projects. The Internet magazine Anthrazit has just proved this once again, so the question remains: were the three long-term partners Migros, Zurich Insurance and Media Markt, which were widely advertised in advance and suggested stability, unable or unwilling to prevent this crash? In view of 900 bruised subscribers - some of whom were recruited by Zurich representatives - and an already unsettled advertising industry, the end certainly casts Gehrig's mentors in a bad light.
No deficit guarantors
"As is usual with sponsorship contracts, we had no insight into the books," explains Claudia Haueter, Deputy Head of Marketing Communications at Migros. The hiring decision also came as an "extreme surprise" to her. For the investment in the first quarter - almost CHF 100,000 according to Werbewoche research - the company received the agreed equivalent value, "which is the end of the matter for us". Haueter has learned from this short commitment, which was deducted from the national advertising budget, "that we should probably have contributed too much oxygen to the 'snuff' of this interesting but obviously underfunded project from the outset".
Media Markt and Zurich Insurance, which support the annual budget of around four million francs to the same extent, have also come to this conclusion. Through their distribution of CfK, however, they have paid a higher image price than Migros. They defend themselves against the accusation that they also use quarterly thinking in sponsoring and dropped Gehrig too quickly. "Booking advertising space for a year in advance doesn't guarantee a deficit, even if that's how it might have been understood from the outside," clarifies Media Markt CEO Guido Renggli. Zurich spokesperson Olivier Michel agrees and adds: "It was not us, but the publisher who drew the consequences from the disappointing figures." In other words: The contractually stipulated exit clause was not applied.
The CfK father was certainly not deliberately misleading his sponsors. Nevertheless, the rhetorical plussing of three simple annual bookings with an option to extend until the end of 2006 raised false expectations in some quarters. Conversely, the advertising market is increasingly demanding certain minimal guarantees. Innovators therefore have no choice but to play their cards close to their chest.
And what did Gehrig learn from his crash landing? That "in addition to guaranteed advertising space, many extra support measures are needed. That's the only way it works today" - if it works.
In the bin: The end of Cracks for Kids shatters dreams that sponsors would have to rescue a print product from a crisis.
No deficit guarantors
"As is usual with sponsorship contracts, we had no insight into the books," explains Claudia Haueter, Deputy Head of Marketing Communications at Migros. The hiring decision also came as an "extreme surprise" to her. For the investment in the first quarter - almost CHF 100,000 according to Werbewoche research - the company received the agreed equivalent value, "which is the end of the matter for us". Haueter has learned from this short commitment, which was deducted from the national advertising budget, "that we should probably have contributed too much oxygen to the 'snuff' of this interesting but obviously underfunded project from the outset".
Media Markt and Zurich Insurance, which support the annual budget of around four million francs to the same extent, have also come to this conclusion. Through their distribution of CfK, however, they have paid a higher image price than Migros. They defend themselves against the accusation that they also use quarterly thinking in sponsoring and dropped Gehrig too quickly. "Booking advertising space for a year in advance doesn't guarantee a deficit, even if that's how it might have been understood from the outside," clarifies Media Markt CEO Guido Renggli. Zurich spokesperson Olivier Michel agrees and adds: "It was not us, but the publisher who drew the consequences from the disappointing figures." In other words: The contractually stipulated exit clause was not applied.
The CfK father was certainly not deliberately misleading his sponsors. Nevertheless, the rhetorical plussing of three simple annual bookings with an option to extend until the end of 2006 raised false expectations in some quarters. Conversely, the advertising market is increasingly demanding certain minimal guarantees. Innovators therefore have no choice but to play their cards close to their chest.
And what did Gehrig learn from his crash landing? That "in addition to guaranteed advertising space, many extra support measures are needed. That's the only way it works today" - if it works.
In the bin: The end of Cracks for Kids shatters dreams that sponsors would have to rescue a print product from a crisis.
Oliver Classen
