Stimulus Package
The recession continues to hammer the marketing industry. And whatever cautious optimism marketers had six or so months ago has morphed to survival mode.
A study released last month by the Association of National Advertisers found that an increasing number of marketers plan to cut costs, further reduce budgets and eliminate or delay some projects. These marketers also plan to put pressure on agencies to help reduce costs. And almost half said they are looking at reducing agency compensation.
“It’s pretty bad,” says ANA President and CEO Bob Liodice. “The reality is the marketers’ mood is grounded in uncertainty. When you don’t know what the future is going to be, you become cautious, you hold back. You do far less because you don’t know if that’s just going to be money flying in the wind.”
If a silver lining is to be had, the report suggested that all this pessimism might mean marketers will “skew their media mix toward promotional spending and direct marketing.” Even so, because budgets are decreasing, this won’t necessarily equate to more dollars for promotion agencies. But it does mean that promotion is in demand to keep consumers engaged at a time when they continue to save, not spend.
One way to keep consumers engaged is to keep the conversation going so that when things finally do turn around, the relationship will be intact.
The companies profiled in this month’s “Social Studies” cover story (see page 28) are object lessons in the importance of fostering a conversation.
Brands like Sharpie are using low-cost channels — blogs and Twitter — to connect with a large fan base for their iconic markers. Brewer Molson is employing those same platforms to get the word out about the community-service passions of its employees. Walmart and Disney have both recruited mommy bloggers, while Home Depot and Rubbermaid are posting how-to advice videos to a range of different Web sites, not just their corporate home sites.
Readers of this issue will also find 11 tips on how to economize on vehicle-based marketing tours (see page 16). For the first time in about 10 years, road travel is expected to be way down, 30% or more, and that is translating into big bargains.
In these challenging times, there is a natural tendency for marketers to move to a more value-based approach to push the promotional side of the marketing mix — coupons, discount pricing, sweepstakes, value-added packaging, buy-two, get-two-free offers — to get product moving.
A continued investment in a brand in good times or bad is paramount to ensure the health of the product. Once consumers lose confidence, the brand becomes a commodity.
“Once that perception declines, the jig is up,” Liodice says.
