I’ve been thinking a lot about what the current financial situation means for agencies and how people and companies can navigate the downturn in such a way that slingshots them into the eventual upturn. The following should be taken with a grain of salt however, as not even Warren Buffet seems to know which way is up.
One thing that is going to come out of this is that companies are going to shift how they spend their marketing money. If the growing number of retail focused ads running on TV right now are any indication, this shift is already taking place. Marketing is shifting focus from long-term brand building to retail selling messages. My wife has been clipping coupons and telling me about deep discounting going on with brands like Coach, Bloomingdales and Saks. Cadillac is taking part in GM’s Red-Tag event for the first time ever. It looks like maintaining an upscale brand image has taken a back seat to survival, just like the green trend seems to be taking a back seat to the economy … but more on that in a later post.
Not that any of this is out of the norm for a recession, but there does seem to be a perceptible panic that I’ve never noticed during a downturn before (though viewing an economic downturn from the safety of college probably skewed things a bit after 9-11).
If this does turn into the very long, protracted recession that some analysts have predicted, I think you’re going to see companies start to rethink how they are marketing. They are going to be forced to be much more efficient with their marketing money. Suddenly, the client who demands: “where’s my Elf-Yourself!” one week only to buy TV scripts and print the next might actually listen when creatives are presenting their non-television ideas. Those CMOs who are in the news every few months for talking about how agencies don’t get it, how their agencies are behind the times, and how agencies need to adapt, might actually start start taking time to look at the forward thinking creative ideas that their agencies have been bringing to them all along. Wouldn’t that be a change?
In other words, while everyone has been dancing around this idea that things have changed and that the old way of marketing is dead for the better part of a decade (or two?), I think this economic environment might finally, and violently, kill that old way of doing things dead. If that happens, it’s not going to be an easy transition. Large, iconic agencies that were built to churn out TV ads could find themselves in a bit of a pickle, while smaller, smarter, more nimble shops might have room to flourish like they never have before.
But I think it goes much bigger than that. With automakers needing bailouts, giant banks failing, the New York Times mortgaging their building, and even thoughts of the major television networks needing Federal money, it seems like we might be at a watershed moment in time. We are at a point now where industries and companies that have been hanging on by a toenail through even the best of times are being pushed over the edge (except those being bailed out), making room for new technologies, business models and industries. The old growth canopy is burning down, leaving a vacuum for new companies and ways of doing things to flourish. This could be the economic event that we will look back on as the dividing line between two eras: the death of the 20th-century way of doing business, and the birth of what we have always thought of as being The Future.
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