By Jack Neff, Advertising Age
Published: March 24, 2008
BATAVIA, Ohio — The massive bailout of Bear Stearns from the brink of bankruptcy could be the first of many financial rescues needed. Despite double-digit plunges, U.S. housing is still overpriced by historical yardsticks. Retail sales have gone from slow to declining, and the consumer-spending binge that propped up the U.S. economy for years may not return for a long time.
In short, it’s a great time to be in marketing.
Previous recessions have provided big opportunities — spawning the brand-management system, soap operas, modern cable networks, airline loyalty programs, the IBM personal computer, the iPod, Crest Whitestrips, Axe body spray and — for better or worse — fast-food value menus.
Tips for Surviving in Tough Times:
1 Don’t cut that budget: Recessions offer what may be unprecedented opportunities to market in an environment of relatively less noise as others cut back. And, particularly in industries with high ad-to-sales ratios, such as package goods, analysts have become fairly adept at flagging earnings gains that stem from marketing cuts, which can portend slower sales and earnings growth later.
2 Maintain or increase strong launches: Even in the deepest recessions, things that truly appeal to consumers, be they soap operas, CNN or disposable training pants, still flourished.
3 Beware that discounting can be addictive: Unless the price reduction is truly strategic — e.g., a discount retailer or brokerage or a one-time event to drive traffic — you could live to regret it.
4 Go with the flow: Some of the most successful recession-era launches were natural offshoots of the conditions created by or causing the crisis, i.e. high gas prices spawning fuel-efficient cars, interest bearing checking accounts that sprang from high interest rates in the 1970s and ’80s, or declining gas prices and gas-guzzling SUVs.
5 You can’t go wrong with diversion: Media, entertainment and other forms of cheap frivolity can be the bread-and-circus salve for hard times — from the soap operas of the 1930s to MTV in the 1980s to the iPod and Axe body spray in 2002.