It’s the Stupid Economy
Marketing spend is supposed to be the bellwether for the economy. When the economy is weak, marketing budgets are the first to go. So alarm bells rang a week or so ago when automaker Hyundai announced it might pull out of advertising on the Super Bowl. But then, thankfully I guess, they relented and decided to spend the cash anyway.
The $2.7million it costs to run a 30-second spot on this year’s Bowl sure is a lot of money to spend on a single airing when tough times are just around the corner. But, on the other hand, the SB is also about the last big advertising game in town and pretty much the only chance every year to make a big brand statement that sizable numbers of people will see, and maybe even talk about. Nowhere else is there opportunity for such a shared experience and so advertisers will spend huge bucks to be part of the water cooler conversation about it.
So Madison Ave and Wall Street breathed a joint sigh of relief when Hyundai decided to play along after all. Maybe we’re not about to dive headlong into recession after all! Maybe consumerism will save the day! Maybe we can spend our way out of this thing!
Not so fast. If past recessions are anything to go by, marketing spend will take a hit as it is the least painful way to cut costs. Of course, the hope is that this might not be like past recessions. Since the last one, which began in mid 2001, spend has started to shift to media that can be better measured, so making it easier to justify marketing spend to those holding the purse strings. This time around, for instance, 7.5% of all spend is on Internet advertising, where results can be easily correlated to cost.
But, compared to the money spent on broadcast campaign, this ain’t big dough. So while digital media might not suffer as much, and might actually benefit from a stinky economy, as money is shifted into it from less measurable media, big budget brand-building campaigns that don’t translate into short-term sales almost certainly will be cut. And because these make up a much bigger part of the pie the overall pie will get smaller. And a smaller pie, even when covered with whipped cream, just isn’t as satisfying.
The good thing about recessions of course, is that tighter budgets force smarter thinking and favor brave marketing based on creative approaches.
So, to end on a positive note I say pie be damned! Bring it on. Let’s think, not spend, our way out of this recession.