Where Does Advertising Fit With Consumer Confidence?

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By: Dwayne W. Waite Jr.

When your economy is based on consumption, it is important to hear if consumers are opening their wallets or keeping them closed. With several years passing from the financial meltdown and announcements of deep budget cuts and layoffs slowing down, economists are looking for positive numbers when it comes to consumer spending and confidence.

No one is hoping for the good old days, when consumers could get loans and high credit limits as long as they had a pulse and could sign their signature. No, people (and brands) are simply hoping for some good news.

Well, perhaps this is the beginning.

Andrew Duguay is a senior economist at the Institute for Trend Research (ITR) and he recently wrote a piece about the "consumer stress test." He skimmed the surface about signs we should be looking for when it comes to consumer spending, and if the signs look good.

So far, things do look good. Duguay writes that with the extra boost in employment in 2012, and the dip in savings in order to spend, things are looking up for the economy. He also notes that the dip in savings isn't a bad thing because it shows that people are willing to take some savings out in order to consume, meaning that the "risk" of spending later versus saving for later is fleeting. Plus, for our trend followers out there, Duguay notes that the savings rate of 4.2% falls right in line with the 20-year average, so nothing is really out of the ordinary.

What in the world does this have to do with advertising?

A lot, actually.

As marketing and advertising is the language of business, we have to know that business is starting to look good again with consumers. Brands can leave the themes of "stability" and "long-term" and start getting back to the fun, brand-centric messages businesses and shops are born to do. Steadily leaving the risk-averse messaging could help boost not only brand morale, but consumer morale as well. No one likes hearing messages of fear, doom, and gloom. Fashion brands can't always close a deal while talking about savings; though the cost is important, the fashion brand is going to draw consumers in by showing them how good they're going to look.

Yes, the U.S. economy and its businesses are not completely out of the woods yet. But consumers are getting comfortable with spending again, so AdLand has to be ready to switch up the message.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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