Three top global ad groups announced so-so results and warned that the rotten economic climate would likely yield more bad news to come, according to the Financial Times on Wednesday.
Isn't this a textbook definition of a self-fulfilling prophecy?
Advertising, and marketing in general, are the proven tools to generate sales. They're how consumers find out about products, learn the costs and benefits, and get prompted to buy stuff. When you cut it in some absolute sense, or by a percentage, your sales will suffer absolutely, won't it? Then the cycle repeats; less sales means less effort to prompt sales, yielding even less sales and, well, you get the idea.
So either the leadership of big corporate spenders on brand are stupid, or there's just something wrong with the equation I outlined above.
I think the answer is sorta both.
Lots of marketing communication has nothing to do with sales, with corporate advertising instead leading the charge toward realizing abstractions of brand and awareness. Clients are told that they must invest in the brand, which means running ads (or sponsorships, etc.) that make explicit and implicit promises to impact sales somehow, someway, sometime in the future.
The problem is that the future never seems to turn into the now.
Nobody is seeing payoffs for all those investments in brand equity: the accounts are not getting drained, or applied to patch up holes in today's outbound marketing. Instead, price seems to be the most important brand attribute, followed by the realities of utility, reliability, and support. I'm not sure if the brand equity was ever equity in any meaningful sense of the word (beyond the bank accounts of people paid to deliver it).
So it doesn't seem like an unreasonable executive decision to avoid making the same mistake again, even if they can't articulate the budget cutting as such.
But what about the marketing that's directly tied to sales? Does it make any sense to cut those budgets, especially in challenging times?
It does, only if you can't tell the difference between what works and what doesn't, or even define what "works" means.
Now’s not the time to advocate mindshare, awareness, likeability, presence, engagement, or any of the other mealy-mouthed excuses for marketing that doesn't deliver some casual prompt to sales (however distantly, even). Conversely, it's a perfect opportunity to cast advertising, PR, and all the other tactics of marketing communication as tools to generate behaviors that can be mapped and measured...not just in some abstract future sense, but right now, and every now between today and whenever.
Maybe brands live moment-to-moment, and your brand equity is the context and result you see in the last snapshot you took of your activities in the market?
It would mean the budgets that will survive (if not grow) would deliver that actuality. And the agencies that make it happen could have a lot less to worry about when it comes time to report ’09 profits.
Enough with this self-fulfilling, self-defeating routine, right?