Tuesday, March 25, 2008

Recession Responsible for Marketing Innovation

Hopefully you didn't miss Nancy's rant last week on how we direct marketers can deal with a slowing economy. Her thoughts are backed up by this article from "Advertising Age": Recession Can Be a Marketer's Friend.

While our blog post focussed on how marketers can use Direct Marketing tricks, like measurement, ROI creation and advanced testing strategies to justify each dollar spent on marketing, this article highlights the many innovations that occurred in slow economic times and recessions.

From the article:
"Previous recessions have provided big opportunities -- spawning the brand-management system, soap operas, modern cable networks, airline loyalty programs, the IBM personal computer, the iPod, Crest Whitestrips, Axe body spray and -- for better or worse -- fast-food value menus."
Other innovations cited in the article were CNN and MTV, both created in the midst of a recession (early '80s). Apple introduced its PC in that same early 80s recession. And, in 2001, during another slowdown, Wikipedia was launched.

All of these are excellent examples of innovative launches. Who would have thought that all were born in tough economic times?

Hmmm. What a great way to look at these times. They're an opportunity for the innovative, the people with big ideas, the people who aren't afraid to try out new things, even if they're worried about where their next paycheck will come from.

So, I guess here's our challenge--let's focus our time during these tougher times on being open-minded to new things. Let's stop worrying about the next dollar and start worrying about that next big idea! And, to jump-start the process, take a look at these tips, quoted directly from the article:
  • Don't cut that budget: Recessions offer what may be unprecedented opportunities to market in an environment of relatively less noise as others cut back. And, particularly in industries with high ad-to-sales ratios, such as package goods, analysts have become fairly adept at flagging earnings gains that stem from marketing cuts, which can portend slower sales and earnings growth later.
  • Maintain or increase strong launches: Even in the deepest recessions, things that truly appeal to consumers, be they soap operas, CNN or disposable training pants, still flourished.
  • Beware that discounting can be addictive: Unless the price reduction is truly strategic -- e.g., a discount retailer or brokerage or a one-time event to drive traffic -- you could live to regret it.
  • Go with the flow: Some of the most successful recession-era launches were natural offshoots of the conditions created by or causing the crisis, i.e. high gas prices spawning fuel-efficient cars, interest-bearing checking accounts that sprang from high interest rates in the 1970s and '80s, or declining gas prices and gas-guzzling SUVs.
  • You can't go wrong with diversion: Media, entertainment and other forms of cheap frivolity can be the bread-and-circus salve for hard times -- from the soap operas of the 1930s to MTV in the 1980s to the iPod and Axe body spray in 2002.
I can't wait to see what innovations this recession will spawn!


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