Will the Mother of All Recessions Radically Change Advertising?

Am I shooting myself in the foot by arguing that the brutality of this recession calls for a major adjustment in the advertising equation – from creative strategies to media, from account management to production costs and values – a change that will affect the way we do business well into the future?

Am I in violation of the unwritten “La-vie-en-Rose” agency rule that stipulates everything is all good, all the time; good news always carries the day and smiling is contagious; in other words peaches and cream para todos?

Has the impact of the economic downturn gotten to me, twisting my thinking, muddling my mind and turning me into a harbinger of doom?

¿Estoy hablando M*%$#!?

Time will tell.

Perhaps I am wrong.

But I could also be right. Just a little. And, given what’s a stake, a little right can make a big difference.

I’m convinced things will be radically changed when this, the Mother of all Recessions, ends. When the mighty economic engines start to rev up and our slumbering workforce begins to shake off the imposed inactivity.

And when that happens, only those brands that possessed the insight, foresight and know-how to protect and maintain their customer base will prevail. The others will go the way of the dodo bird.

A dizzying disconnect
After watching a number of advertising campaigns – both Hispanic and general markets– across all channels, it seems to me that many leading brands continue to speak to their customers in yesterday’s language, as if nothing had changed. When in fact the world is radically different.

In several instances, the disconnect between the bitter reality on main street, and the make-believe world depicted in advertising is so marked that if extraterrestrials depended on the media to understand the earth, they would think all is laughter and games. They wouldn’t even get close to understanding that there’s an unprecedented social and economic cataclysm that’s sowing fear and despair among millions of people; that jobs are being lost at a rate of over half a million per month; that it’s tough out there and getting tougher by the day.

“Yeah, things are really bad,” some will argue, “but advertising can serve as a source of distraction for those very same people. People who know how things are, for whom a dose of make believe will make them feel good about themselves and their brands of choice.”

True. They may even appreciate the company that’s brought them a clever, memorable, engaging, inspiring campaign – for about 30 seconds.

Then what? So the unanswered questions remain: Does that build your brand? Does it preserve the existing trust from your customer base? Does it make each and every customer feel wanted and appreciated? Does it listen to their needs?

Does it succeed in strengthening the relationship between consumer and brand?

Advertising during a recession
There is ample data to support the wisdom of continued advertising during a recession. Simply Google it up, you’ll get statements like the following:

“In a study on US recessions, McGraw-Hill Research analyzed 600 companies from 1980-1985. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.”

More recently, in 2001 another study found that aggressive recession advertisers increased market share 2 _ times the average for all businesses in the post-recession.

I believe those studies are true, partially, but they also miss the point.

Consensus is building that there is no historic precedent for this, the Mother of All Recessions. None of us has lived through anything like this crisis, which combines the blowing of the housing bubble, the mortgage and banking disasters, the credit crunch, high oil and commodity prices and an unstable currency. All in a world that’s smaller than ever before. In fact, in a world that’s radically different than 6 months ago and changing at an unprecedented rate.

The question, however, is not whether to continue communicating with your customers, but how. And success will lie in the ability to do so in a radically different way in the areas of creative, media, production and account management.

Communicating relevance: creative
In a nutshell, the challenge all businesses face is convincing their customers why they should continue to choose them over the competition. One approach (if you hear of another one, holler!), which makes the argument in a persuading way, is to demonstrate good will; a product portfolio that meets the consumer’s needs and expectations, i.e. do good.

Prove to them that you are not just a fair-weather friend. Contigo en las duras y las maduras.

And I believe, especially during these trying times, that tone and manner should be radically different from previous periods. Got a great creative, big idea? How big? (Just make sure it’s relevant and respectful.) Does it boast? Does it listen?

Defending your assets: media
Media strategies need to adjust by optimizing, increasing targeting, and linking and layering channels to include new media (viral, digital, web, mobile and social utilities). Leverage the Youtube and Facebook phenomena.

Production values: frugal
Show off with slick extravaganzas, and most likely the response will be: “They could have saved some money.” However impactful the ad, there’s a danger that could backfire. Companies need to remain conscious of the populist, anti-corporate wave of sentiment sweeping the country. There is real anger over real and perceived abuses.

Managing clients: patience
Clients are not always right. They need to be fully conscious and aware that times are tough. Results will be limited. Just as things are likely to get worse before they get better, an investment needs to be made in the customers. Otherwise they could walk, and simply choose another brand.

Final thought: The consumer will prevail
But the Mother of All Recessions will one day see its end. Along with most human beings alive, I hope it happens sooner rather than later. Then what? How different will things be?

I think as a nation, the unmitigated orgy of excesses will have taught us a few lessons on vulnerability, hopefully planting our feet firmly back on earth, helping us understand that resources are limited, moderation is a virtue and, in that sense, smaller is better.

One thing, however, that will never change is that the customer will continue to have the final word. Following the debate over the economic stimulus package, watching as billions of dollars add up to trillions, and bankers and lawmakers discuss how those monies will be assigned, oftentimes we forget that all that wealth, every single one of those dollars, was created by the collective and individual efforts of people. Those giant companies, and the brands that represent them, are only worth as much as the trust consumers place in them. To paraphrase an advertising legend, the consumer is you and I.

By Carlos F. Torres,
Partner, Freydell+Torres Diversity
ct*****@*********ty.com
(631) 827-1284
www.ftdiversity.com