Axeing paper may not stop wider brand damage for Murdoch

By Jodie Ginsberg

But killing off one of Britain's best-selling papers may not be enough to stop the taint of the News of the World phone-hacking scandal spreading to the wider News Corp <NWSA.O> brand.

"I think the strategic error that News Corp made was in thinking that if they shut the paper that would end it, that the toxicity would end with the paper" said brand strategist Simon Middleton, author of 'Build a Brand in 30 Days'.

"But that toxicity has spread."

News Corp axed News of the World in the middle of last week after a phone-hacking scandal originally thought to have targeted only celebrities, politicians and other high-profile figures was found to have involved crime victims such as Milly Dowler, a missing 13-year-old girl later found murdered.

The saga was also revealed to have gone back much further than first thought, to a time when one of Murdoch's closest confidantes, Rebekah Brooks, now the chief executive of News Corp's UK media arm, News International, was editor.


Middleton said he believed there had been a fundamental shift in people's attitudes toward the Murdoch empire in Britain: "There is a point, and you never know until you get to it, when the acceptable becomes unacceptable ... that was the Milly Dowler moment.

"What happens is it kind of shakes people out of complacency. It applies not just to the men and women in the street who buy the News of the World, not just to the men and women in the street who buy the Times and the Sunday Times ...but also to the political establishment."


Middleton said he did not believe News Corp would win back people's trust simply by shutting the paper and noted a shift in attitude toward it since the announcement of the closure, with anger now focused more on the organization itself.

"One of the fascinating things is that News of the World has gone from being reviled, hated and scorned, to being described as Britain's iconic popular newspaper," he told Reuters.

Others were doubtful whether a crisis that has created huge waves in political circles would have much long-term effect on the ordinary public -- and therefore on advertisers -- and predicted that a mooted Sun newspaper on Sundays would win readers.

"Given a sensible breather ... I do think there could be a lot of excitement <about a Sun on Sunday>," said Gordon MacMillan, social media editor at Haymarket media group and founding editor of Brand Republic.

Nevertheless, there is clearly concern at the very top of News Corp about the fallout from the News of the World affair.

Rupert Murdoch flew in to London on Sunday to tackle the crisis personally. Up to now, he has stood by Brooks and his son James Murdoch, the News Corp director responsible for overseeing News International.


"The interesting thing from a brand perspective is that a consumer brand is trying to behave more like a utility," said Nick Liddell, global strategy director at branding group Clear.

Utilities, Liddell noted, were largely concerned with maintaining a reputation that would ensure they could keep their license to operate, where permission for them to do so comes from governments or regulators.

"It's a slightly bizarre thing to do to kill a consumer brand, because I'm not convinced the audience that will give News International a license to operate will care.

"When BP <BP.L> screws up, they don't rebrand."

Liddell noted that when BP came under fire for the Deepwater Horizon oil spill last year it "lost the people, not the brand": "The companies that are used to behaving like utilities understand that ... having the brand is what makes them visible, and that being visible is what makes them accountable.

"<News Corp> could find that axeing News of the World does nothing to make them seem more accountable."

(Reporting by Jodie Ginsberg, editing by Tim Pearce)