With the tasteless timing of a drunk hitting on a widow at her husband’s funeral, marketers are in Cannes this week as the big grey clouds of recession barrel overhead.
While our economy constricts and inflation escalates, our best and brightest are on the French Riviera listening to Paris Hilton and Gary V explain what the NFT revolution means for brands.
Further down Le Croisette, middle aged men in faded black T-shirts angrily proclaim, “we put up with too much shit from people that don’t love creativity” while strikes, budget cuts and supply shortages take their toll.
A recession is a peculiar thing. No economist can ever accurately predict when one will arrive, how big it will be, or how long it will last. But once it begins everything is affected in an entirely predictable way. The only silver lining for marketers is that while we have no clue when the recessionary curtain will drop across our businesses, we know from experience how we should handle things once we are plunged into darkness. Provided you accept that we aren’t living in a paradigmatically different era of marketing in which history means nothing, there is a decent playbook that spells out the correct approach for the tricky months ahead.
R is for retaining the long
There is an idiot move at the top of the agenda of all those who do not understand history. They see marketing as a cost. Advertising as a luxury. And brand building as the ultimate vanity. Ergo, when times get tough it’s obvious that the first thing to go is the esoteric brand budget and not performance marketing with the proven and immediate ROI.
It turns out that is exactly the wrong move. In case studies going back a century the story is always the same. The companies that maintained ad spend, or even increased it, during a recession saw little advantage during the hard months of the squeeze. But the minute the green shoots of growth appeared, their growth was spectacularly superior versus competitors that cut back during the recession. You maintain the long of it because its impact is delayed but substantial and it will kick in exactly when you need it as the recession ends.
E is for excess share of voice (ESOV)
The reason the long of it not only works through a recession but works harder for your brand during a recession is ESOV. You have to ignore all the blowhards on marketing twitter that critique ESOV for this reason or that. It is the closest we have to a scientific law of advertising and it says an equilibrium exists between a brand’s share of voice and its share of market.
If a company increases its relative share of voice above it share of market, the equilibrium will eventually restore itself and market share will also grow.
Fuck failure, it’s really not welcome. It’s certainly not essential to success. And it’s especially unpopular when recession makes it a potentially fatal experience not a teachable moment.
In a recession this happens differently. Many, perhaps most, of your competitors will cut back on their advertising spend. Especially the brand building stuff. If your category cuts half its ad spend and you maintain your ad spend, for example,…