We certainly have been living through a great game changer. The great recession. It started in 2007 so we are now in our 4th year. About as long as the U.S. was in the Second World War.
I think to answer this question we have to start with everyone’s target group, the consumer.
I think that the consumer has changed dramatically. This week I read in the OC Register that 86% of us know somebody who is unemployed. I know hundreds.
The first thing that changed the marketing field was consumers switch to fanatical frugality. The overspending consumer of the past simply stopped spending. Americans actually began saving.
Then consumers became victims of press paralysis with all the negative commentary. It must be tough to write a positive article when you are sitting in a press room that is half empty. I was on a business trip a couple of years ago running on a treadmill watching CNN in the morning when the market was dropping. The visual was the stock ticker falling and the announcer exclaiming in a high pitch voice, “The market just dropped 10 points, another six points,” and so on. Sounded like an announcer calling out a horse race. Was this the introspective reporting Ted Turner had in his mind when he founded CNN? When the network morning shows interview Dancing with the Star dancers and American Idol stars on the 7:30 segment that was always slotted for serious news you know that they are only interested in superficial hype.
I think that consumers have drastically changed in their behavior largely because of technology and fear. Many consumers have turned themselves into lemmings voluntarily. If you see a lineup of 10 people at Starbucks, 8 of them will be looking at their crackberries. They remind me of zombies in a Metropolis movie. What are we afraid of missing? A job offer? A new client lead? Or a mundane stream of spam? Communications has becoming the following. “Did you get my e mail.” Response. “I saw it but I didn’t get a chance to read it yet.” Shallow communication. Do consumers connect with brands now in the same detached way? In the past I remember when consumers would know when an advertiser had a new spot in their rotation. Do they still notice?
So how did clients respond during the recession? I am not talking about the Apple’s of the world who have seen no recession. First clients cut marketing. They had to learn to do more with less. Most were slow to embrace social media. Not enough belief in its sustainability? No band width? Too much work? Don’t get it? Who knows.
Client decisions and approvals certainly take much longer and is consensus based. Why? Nobody wants to get fired. Innovation and taking chances and sticking one’s neck out on new and possible risky ventures have been suppressed in my opinion. I could be wrong but I have seen a lot of the former.
Some companies changed their definition of marketing. Zappos defined marketing as service and invested its funds in that area. Do lemmings remember service more than advertising and tweet, text and post about it?
How did agencies change during the great recession? First many went into a bunker and hunkered down. They quickly cut people and every expense. They mimicked their clients and were slow at embracing social media. Probably because they thought they didn’t think they could make money on it. They missed the opportunity to use social media to market themselves while they were in their bunkers and continue to catch up. A strong social media presence requires more sweat equity than financial but most didn’t want to invest the time. If they had, today they would have an expertise they could sell.
So who in your opinion has changed the most and what will be the future?
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Hank,
There is a ton of different issues that can be addressed here.
First, when looking to get a better perspective on the current state of the economy and, more important, where it may be going, I recommend the book “Afterschock” by Robert Reich, the former secretary of labor in the Clinton Administration.
It is a short book (160 pages or so) that nicely summarizes the long term trend of the drop in personal income for the U.S. middle class since the mid-70’s, how we have responded to it up until the recession, our options to manage the issue for the future and how it all effects the demand side of the consumer market (hint: not good).
The consumer market demand will effect overall advertising spending and, seperately, there will be the accelerated effect of technology on how information is consumed and what form that will be in: paid vs. earned.
This was all having an effect on the advertising, marketing and media industry before the 2008 crash but has created a double-whammy for our industry.
Even with the economy in a small crawl forward over the next few years, the dynamic shifts in social media will keep all of us working on figuring what is the right mix of services and value to bring to clients going forward. What seems to be the rigth direction today may shift dramtically over the next few years.
Consumers have changed their habits, no news here. Every time there’s a crisis we evaluate choices as to how our dollars will be spent. This is a good thing as it becomes an opportunity for other brands to say “hey, I’m here, try me”.
With regards to the way we do business, nothing has fundamentally changed I think. However what I see and many will probably agree is the increased level of fear (of being fired, loosing the account, etc.), fatc that is pushing us to become more and more complex. As a result, we forget to do the basics right. Agencies and clients are looking for the holy grail of ROI and effectivness in every dollar spent. Although I won’t deny it would be great to have it, at the same time no one is sure whether the holy grail really exists. The unintended consequence of all of this is that such level of fear stops creativity adn innovation on its tracks. 1)Let’s go back to basics and get rid of the fear because in advertising there are no guaranteed success formulas, 2) Let’s not forget that advertising doesn’t solve every marketing problem, brands need to back it up with good products that people want to buy and buy again.