How does advertising survive if people voluntarily -- or involuntarily -- cut back?

I have a friend who’s made his living in advertising for 15 years. But he’s a bit of an iconoclast. And at various times, he’s given up driving his car, watching television, eating red meat, getting fast food, and drinking (that last one didn’t take). And I know a number of urban-dwellers with white-collar jobs who are now growing vegetables in their backyards and raising their own chickens.

Some of them are doing these things to save money. Some are doing it as a lifestyle experiment. These days, though, it’s getting hard to tell the difference.

While it’s no secret that the ad industry has seen its share of cutbacks and layoffs this year, we have a bigger issue to face. Because what we do is always tied to the bigger picture—the economy in general. The American economy is dependent on consumer spending. And that’s the world we created. We’d better have a backup plan if the economy keeps sputtering.

If people continue to lose their jobs, cut back on spending, scour for discounts, barter services with friends, find ways to grow their own food, or decide they just don’t want a new electronic gizmo every year, can we survive? Can we find new ways to sell stuff in a leaner, meaner, or greener economy?

We don’t need Socialism with a capital S, but we do need the balance that maintains a vibrant middle class. A little spreadin’ the wealth helps the ad industry—not so we can sucker people into buying what they can’t afford, but to ensure people have the means to buy little slices of a life well lived—a nice dinner out, a new outfit, a vacation here and there, a new garage door on the home, a trip to the ballpark. It’s no coincidence they set “Mad Men” in the post-war boom years of the Fifties and early Sixties. That was a golden age of consumerism and upward mobility for a lot of people. But that era, for better or worse, is long gone.

Our clients today—the brands we’ve surrounded ourselves with in modern living—won’t survive for long if current economic conditions continue. Big brands are particularly vulnerable. When cost is a factor, shoppers will opt for generic brands or less premium brands. And when cost isn’t a factor, there’s still a growing movement among some people to avoid big brands. I’m sure you know folks who insist on supporting local businesses or small brands even if it’s more expensive to do it.

Adapting to these kinds of trends doesn’t come naturally to the advertising agency world. We’ve become conditioned to think globally. If it isn’t a big, global client, it doesn’t get mentioned in Adweek or talked about at Cannes. If it isn’t a household name, no one wants to see it in your portfolio.

So is there a way to for advertising to adapt and thrive? Are there tactics we can use to keep help brands stay premium in any economy? Are we destined to mostly push value meals and warehouse sales?

There will always be big brands competing for global dominance. But as we saw with GM and Washington Mutual, no brand is too big to fail. Maybe though, the advertising industry shouldn’t be thinking bigger, but thinking smaller. Did you know over 43% of the American workforce is employed by small businesses, defined as 500 people or less? Many of these businesses are brands that could use some dynamic creative thinking.

I happen to be one of those people who believe there’s serious money to be made—and good advertising to be done--in the development and marketing of new alternative energy sources, environmentally-friendly products, organic and local produce, microbreweries, and all sorts of other things you might think would be anathema to our industrial marketing complex.

But it’s going to take a healthy economy to get it done, and an economy that’s oriented to small businesses as well as big business. We need economic stability so entrepreneurs can take risks, banks can extend credit to small businesses, manufacturers can make products profitably in this country, health insurance is affordable for a two-person startup company or a creative freelancer, and folks from all walks of life get back to work in meaningful jobs.

And if that begins happening, the best part is that agencies and marketers can provide the jump start in promoting these businesses and initiatives with creative ideas. Our industry itself is the perfect example of this. Today’s big and mid-sized ad agencies didn’t start out big. Many started out with a few people working in a spare bedroom or around a kitchen table. Some of the best work is being done by small agencies you or I haven’t heard of. I’ll bet the same thing is happening in other types of industries.

We can be the people that encourage new thinking in all areas of business. We can be the ones promoting real capitalism, not crony corporate oligarchies. Then perhaps we won't be talking about anyone cutting back. We'll be talking about a comeback.