Monday, November 24, 2008

Recession - marketing still works doesn't it?

Long time since last post which shows that either I’ve:

  1. Given up
  2. Been very busy

The answer is (fortunately for me) 1 – been busy – in fact I still am. I’m one of the lucky ones. Given the current economic climate, being busy and gainfully employed is starting to feel almost like a luxury.

Assuming that we all now agree that there is a recession on, one question was put to me over the weekend – does marketing in a recession still work in the same way?

I have to admit that I’ve only seen a mild adjustment rather than a full recession in my working life but to be honest, I think we can all see from the high street that the rules are shifting a little bit. In the last week, lots of retailers have been having “extravaganza” events or similar – 20% off everything, Buy One Get One Free etc….

I think a quote from Time magazine best summed up the feeling of many consumers towards these offers – “Is that the best you’ve got to offer”. That’s a dangerous message but it’s what many people seem to be saying. The danger is that we all wait until tomorrow then the next day to spend. Here in the UK, we’re about to get a sales tax reduction (if you believe the papers) but retailers are warning that it’s going to cost them to pass on this reduction.

What then are the tactics that will work in the current climate? If conspicuous consumption is out of fashion, what’s the solution for marketers? Maybe things aren’t as bad as they seem here in the UK or maybe they are worse than many realise.

In terms of making sure that marketing is effective, many advertisers and retailers are turning to “tried and tested” direct tactics – Direct Mail, Vouchers, Online etc to try and buy short term sales. This undoubtedly makes sense for most and must be a real worry for the big media companies. Whether this type of activity damages brands in the long term doesn’t really matter right now when everyone is just trying to improve cash flow. The price of traditional brand building activities will certainly be reducing as competition for spots or sponsorship opportunities dries up. At some point the pendulum will swing back as brands stop fighting fires and look to rebuild. Those that are nimble will undoubtedly do well – others will fail.

What is clear is that unaccountable marketing is going to be one casualty of this whole economic event. If you’re marketing budget is delivering only unquantified benefits then you’re about to lose it. The good news for some is that there is no marketing activity out there that needs to be unaccountable.