Reuters is a 151-year-old British institution in need of the kiss of life. Last week, the news and financial information provider announced plans to cut 3000 jobs over the next three years after revealing its first annual loss since the company was floated on the stock market in 1984.
The grim news compounded its axing of 2000 jobs over the past year and a share price at its lowest level since Margaret Thatcher was prime minister.
The group, best known as the world's biggest international news and television agency, makes more than 90% of its revenue from its financial services business, to which it provides its trademark data-packed screens.
But the severe downturn in banking and finance has hit Reuters hard.
Meanwhile, US rival Bloomberg and Canadian player Thomson Financial have both eaten into its market share and threaten its mantle as the most authoritative source of information to business.
Reuters isn't a household name in the same way as TV channels and newspapers, since it acts as a wholesaler of news and financial data that is repackaged by other media firms. It scaled back a consumer campaign two years ago, axing 60 marketing jobs and diminishing the role of marketing director Kevin McCarten, who left as a result.
Yet Reuters' global reach and long history ensures it still has a formidable reputation. Interbrand ranked Reuters as the most valuable British-owned global brand last year.
The latest jobs cull is the headline-grabbing measure of chief executive Tom Glocer's "transformational programme", designed to produce a leaner Reuters, fit to fight its sprightlier rivals.
But some doubt whether Reuters can even survive in its current form, foreseeing a queue of potential buyers.
So how should Reuters go about redefining its business and update what has become a tired and dowdy image?
We asked BSkyB marketing director Charles Ponsonby and Richard Warren, partner at the FT's ad agency, Delaney Lund Knox Warren.
2002 (pounds m) 2001 (pounds m) 2000 (pounds m)
Group revenue 3,575 3,885 3,592
Operating profit -144 302 411
Profit for year -533 -94 297
DIAGNOSIS - Charles Ponsonby
Reuters has a 24-carat brand, but is suffering from the double whammy of an uncompetitive product in a fast-contracting market. As a result, Reuters lost 18% of its subscribers worldwide in 2002.
Meanwhile, Bloomberg has nearly doubled its global market share since 1997. Bloomberg's product, although more expensive, is favoured by clients for its instant messaging, analytical capability and market news.
The challenge for Reuters is to understand completely what it is that its customers want - and then give it to them.
If Bloomberg is going to take the Rolls Royce end of the market, either improve the Reuters product and compete head to head or, if the belief is that corporate clients are price-sensitive, offer a value-based alternative.
I would be leaning on the marketers to fast generate as much consumer insight as possible and then look to the supply side of the business - reduce the cost base, improve technology and product development - in order to get products to market that are competitive. Only when this is done should it worry about the marketing.
DIAGNOSIS - Richard Warren
Reuters is in the business of reporting news, yet it currently finds itself as the main story. Continual speculation about revenues and job cuts has harmed the company's reputation immeasurably.
Suddenly the kind of brand values that most companies would kill for - a 151-year heritage, a voice of authority, a solid Britishness - have begun to appear detrimental. Tradition seems like stuffiness, authority like inertia and Britishness like a colonial hangover.
Chief executive Tom Glocer admits that the Reuters brand has spread itself too thin and has announced a re-focus behind the core information business. This is the correct strategy.
In a post-dotcom, US-nervous global economy, where your primary competitor is the mayor of New York, there might also be an opportunity to re-activate the values of global expertise, authority and experience, albeit in a modern way.
At its extreme, Bloomberg might be seen as a product of dotcom America in the same way as CNN is still associated with the Gulf War. Reuters could exploit this by pointing up its global roots.
- Don't change anything fundamental to the brand itself - it is the key remaining strength.
- Understand the customer, sort out the product and when ready, relaunch the 'next generation' Reuters aggressively.
- Focus the relaunch squarely on a rational communication of the new product's features and benefits.
- Simplify the product offering and return to the core platform of being an information provider.
- If Bloomberg is American, leverage Reuters' global roots.
- If Bloomberg is the iconic dotcom, bull market brand, reinterpret and make relevant the timely values of expertise, experience and authority.
- Think BBC versus CNN.
This article was first published on Marketing