Meet the New Boss.
Okay, so here’s the paradox: in a brutal economy in which revenue is challenged - and you’ve got to think about economizing - the one thing you absolutely can not do is turn off your marketing and advertising.
In fact this may be a good time to thing about doubling down on branding and advertising, provided you can afford it. Why? Because your competition is likely doing the exact opposite: running to the sideline and waiting out the storm. Which means that any spend you make helps establish or strengthen your competitive edge. It’s an adage as old as Warren Buffet - when people are selling, you should be buying. In this case, what you’re buying is increased visibility and awareness for your brand.
And while we’re on the subject of the economy, and our collective desire to stave off really important initiatives other than cost cutting until after things “return to normal”…Get over it. And move on. There is no “return to normal”. This is it.
This is the “New Normal”, and a couple of things are already apparent. And they’re not insignificant.
Consumerism may not be dead, but its heart rate is definitely slowing.
Since the end of the Second World War, the American economy has been built on a single idea – consumerism. Consumerism as both the cause and effect, consumerism as both the ends and the means. We make stuff. We sell stuff. And everything in between is focused on helping one of those things happen. My job included. Probably your job, too.
Theoretically, this concept is elegant, optimistic, productive, and provides an endlessly regenerating social benefit. It’s self-regulating, and relentlessly biased toward innovation and productivity. And because it’s self-regulating, it’s cyclical.
An economy’s forward movement depends on increasing consumer demand, which, in turn, requires a consumer that is either increasingly wealthier, or ever-willing to become poorer in the pursuit of consuming stuff. When consumers begin to shut demand down, a new phase of the cycle begins, and the turbine that is consumerism begins a new arc in its circle that reflects these new conditions. And that arc turns downward.
This down-cycle is referred to as a “recession” - and it’s normally expressed in terms of productivity – did our economy produce more this quarter than it did last quarter, or did it produce less? If it’s less, then we’re in a recession.
The fact is, what we’re actually doing in a recession is not consuming as much as we were. We, as consumers, are either not wealthy enough – or not willing enough to be less wealthy – to sustain more consumption. And, in this self-regulating economy, that decreased demand functions as feedback for the economy. It provides the impetus for innovation and efficiency; for new ideas and products, like fuel-efficient cars, cheaper computers, and cooler James Bond movies.
Historically, that’s the way it’s worked – the economy has gone through up cycles and down-cycles.
However, somewhere in the middle 90’s, we moved into an era in which decreased consumption was deemed to a bad thing - period. Forget cycles. Forget self-regulation. Recessions were not good for business, not good for politics, and hence, not good for Americans. We use phrases like “stimulus” and “continuing access to consumer credit ”, but the fact is, these were artificial measures pumped into a contemporary economy built on the a priori acceptance of the idea of consumers consuming – all the time – and in an ever-increasing manner. The economy was no longer built for a down cycle – natural or otherwise.
And the proof’s not just in the pudding – the proof is the problem. Whereas earlier downturns spawned innovation in what the economy produces, our last recession – the one that came on the heels of the dot.com melt down and 9/11 – spawned innovation in ways to convince consumers to consume more. We replaced wealth something that felt a lot like it – liquidity. Liquidity in the form of easy access to credit, online commerce, exotic financing instruments and tax incentives to draw down equity on the single most important asset we own – our homes. And we rewarded people who screwed on risk – short term, long term, primary, derivative – it didn’t matter. Leverage and profit. Consume and consume more.
And it worked like a charm for awhile – in fact, this new idea of fake wealth actually created another level of fabulous wealth. And it went like gangbusters for almost half a decade. As long as the dude at Best Buy kept scoring commissions on plasma tv sales, he was fine tapping his home equity line for a brand new, tax-deductable turbo charger for his Mitsubishi Eclipse. It felt good. It felt rich. It felt American. It felt patriotic.
It was consumerism in motion. Lloyd Dobbler as an operating principle. And everything – everything – was driven by it. Even stuff you’d never heard of until last fall, like credit default swaps, are based on the idea that money keeps moving - from a seller’s hand to a buyer’s; from a borrower’s to a lender’s. Once that stops, everything stops.
And stop it did. The snake had eaten its tail. Lacking the ability to borrow from ourselves anymore, we were no longer able to borrow from the market. And as consumers, we began, for the first time in a long time, to feel…uneasy.
Welcome to Japan. (Not really.)
Today, the average American is posting a savings rate somewhere in the neighborhood of 5%. While this is not on level of say, the average Japanese citizen, it does track pretty closely with consumer behavior in the EU.
This is an astounding trend - made more mind blowing when taken in the context of the previous twenty years or so, when we were spending more than we made. Every year. For ingrained human behavior to change en masse that quickly - particularly in the face of record unemployment - is a testament to the ability of the average consumer to adjust to a dynamic and challenging environment. Remember, this is a savings rate; which is a pretty complex economic behavior. In other words, an increased savings rate doesn’t simply result from people losing access to credit. If that were the case, we’d see a savings rate of zero, and a drop in consumer spending. The increase in savings rates reflects both a decrease in spending, and an increase in saving. It shows that people get it.
Won’t Get Fooled Again.
So, what does all this mean for marketers and advertisers, faced with the challenges of the “New Normal”? It means opportunity. Lots of it. Here are 5 different things you can probably do to impact your brand, and enhance your marketing efforts with minimal financial outlay.
(1) Guerilla and Social Media: If you haven’t explored the possibilities with social media properties like Facebook, LinkedIn, or Twitter; if you haven’t built a blog; if you’ve never migrated your video content to YouTube, what are you waiting for? There are tons of elements that you can actually access for free. At the very least – the very least – you’ll improve your brand’s visibility on the web, simply by increasing the number of relevant links and mentions. Beyond that, you’ll be on the way to building a grass-roots, relational matrix for your brand. And you’ll get lots of free market research.
Guerilla tactics – installations, event, giveaways – are also cost-effective and interesting ways to extend your brand’s reach in tough times. And their scope and cost is only limited by your vision and creativity.
(2) Market research: A historically expensive marketing component, consumer and market research is one of those things that tend to get axed early in lean times. I tend to agree. If I have to cut something, that’s probably at the top of my list. Why? Because there are plenty of cost–effective intelligence-building tactics you can field in the short term.
Consider internal research, for example. When was the last time you surveyed your employees about your brand? Most companies tend to overlook this component – to their detriment. Internal stakeholders are your brand’s touchpoint: they’re your brand disciples. They live with your brand. They breathe your brand. They hear from your customers about your brand. The question is, what do they know that you don’t? It makes sense to find out. And it’s free.
Sticker shocked by the price of focus groups and big market research projects? Then consider a company like Iconoculture. For a reasonable monthly subscription fee, you’ll have access to tons of data, and researchers. And while your data may not be a laser-targeted as a custom-designed research initiative, companies like this can give you great insight into consumer and buying behavior across a range of demographics. I’m always amazed by how smart these guys are - it’s like having Faith Popcorn as a pen pal. They can definitely help you look over the horizon. This brings me to:
(3) Look over the horizon: As I noted earlier, things have changed. Your customer has changed. This means that your brand’s relationship with that customer has likely changed as well. The question is, have you considered that change? Do you need different messaging? Do you need to refresh your creative? Maybe “funny” worked three years ago…does it now? This is the time to torture your brand platform. And to help it thrive in the New Normal.
(4) Don’t write off the tried and true: The Big 3 is in bankruptcy. (Well, two of them, anyway.) Spending in the hundreds of millions of dollars was canceled on TV, radio, and other traditional media forms. And those media outlets? Their people have bills, too. Just like you and me. They’re trying to figure out how to pay for college tuition and mortgages. Just like you, and me. They have to sell pages, air, and space to do that. It’s worth exploring. You may be able to find deals that make traditional media a little more accessible than your were accustomed to. Check it out.
(5) Question everything: Now is the time. Look at every corner of your branding strategy – from creative, to media to internal to planning, to the way you answer your phone and sign off your emails. Nothing’s sacred. Start building your brand’s next life - the one that’s valuable and relevant in the new normal - today. All it costs is time.
Christian Boswell is the President and Executive Creative Director of bfw advertising+interactive in Boca Raton, FL. BFW has won more than a hundred awards for creative excellence over the past decade or so. And in the “New Normal”, they’re all irrelevant. For more information, please call (561) 962-3300, email: firstname.lastname@example.org or visit www.gobfw.com.