If you watch the news, it’s hard to escape talk of a recession, or a downturn—and some people have floated the possibility of a depression.
Whatever you want to call it, it’s a real downer.
You don’t have to personally be in dire straits to feel the effects. Odds are someone you know, a family member, a friend, a co-worker, is having some difficulty. Our world is so interconnected these days that it’s hard to feel completely removed from the perilous state of our economy.
There’ll be a recovery. There always is. But this time, it seems a complete comeback is less assured. We don’t manufacture as much in America as we used to, so those particular jobs aren’t coming back and often get replaced with lower-paying ones. But that’s only part of the problem, and the ad industry needs to pay attention.
What makes our economy run now is consumer spending. “Consumer confidence” is a important metric. Both are, of course, fueled by advertising and marketing. We’re the patron saints of buying stuff. So it’s hard not to feel the pressure to keep our clients’ businesses humming.
No matter who your clients are, that pressure exists. If gas hits $4 a gallon, people will spend less on dinner or entertainment in order to fill up the tank. That’s a small behavioral change. But there are even bigger concerns. As a country, we’re mortgaging our futures to buy stuff now. If consumers increasingly pile up debt, and more people lose their jobs or their homes, I wonder: Who will keep buying what advertisers need to sell? How much more can people spend? Most importantly, how much longer can we ask them to keep spending so much and so often?
Some people believe there’s no better time for a business to advertise than during a downturn. Which may be true, but you can’t tell your client to pretend that everything’s OK. And it effects the nature and quality of the creative work we produce. Strategically speaking, what do you tell your clients to emphasize during tough times? Trust? Low prices? Value? Remember, clients are nervous and fearful by nature, and now the economy makes them even more so. “I gotta move product” is a refrain I’ve heard quite a few times.
If you’ve been in advertising for a few years, then you’ve seen this before. Nothing seemed bleaker than the aftereffects of the dot-com bust in 2000 & 2001. Every economic downturn weeds out bad businesses—and ad agencies are no exception. A few agencies will merge themselves into oblivion and a few will go out of business altogether. It’s a powerful reminder not to be too content to coast or adopt a bunker mentality until there’s an economic recovery. Yes, it’s a time to try bold new ideas or reinvent the business. You’ll be perfectly positioned to ride the next upward wave.
On the flip side, we can’t be reckless, either. The ad industry must be careful not to shove too much money & resources into unknown technologies and unproven tactics. In other words, don’t pour money down the drain of Second Life if you don’t have your shit together in your First Life.
Unfortunately, I think for most agencies, it’ll be business as usual. Because few agencies have the will to do something unusual, like tell their clients to improve customer service so they keep more of their current customers during a downtown. It’s always sexier to spend a client’s cash to get new customers than to keep the current ones happy.
If you can’t be concerned with the big picture, you still need to protect yourself. Maybe you don’t have the power to change the agency you work in, but you can be aware of the business situation your agency finds itself in. Be cautious if you’re working at an agency dominated by one client or one product category. And be leery of working at an agency that only does traditional work and no interactive. Or vice versa. Clients need all sorts of creative work and tactics to get their message across in tough economic times, and they’re all too happy to move their account to the agency that can deliver the right mix.
Above all, be ready. For anything. There’s no economist, trendspotter or futurist guru who can definitively tell you what will happen to the economy this year or next. We all find out the future at the same time.
And if those thoughts don’t lift your spirit, you can always try a good antidepressant. At least you’ll keep pharmaceutical advertising going strong.