Special Section: Economic downturn? The business with the buzz gets the bucks.
Is the advertising industry a good economic barometer? I think that depends largely on whom you ask. In recent months, we have all heard and read quite a bit about where our economy might be headed. So what are we to make of all the news about slow housing starts and the sub-prime mortgage lending crisis? Surely these items in the news are having some small impact in the short term on the way advertisers might be thinking. But what could all of those economic indicators and facts and figures mean to marketing and advertising?
An article I read in the Dec. 4 New York Times speculates that “Madison Avenue” might be in trouble in 2008 without the impending Summer Olympic games in China and the presidential, congressional and gubernatorial races. National brands are foaming at the mouth to stake out their claims in China. So naturally, the first Olympiad held in the world’s most populous country is an attractive buy for the big-time players, thus spurring a spending frenzy. And spending on political campaigns doesn’t seem to be lessening—again a no-brainer. Expecting the election of the leader of the free world to be a catalyst that drives up ad buys at the national, state and local levels seems reasonable as well.
What could this potentially mean here in our own community? Mid-Missouri may not exactly go the way of “Madison Avenue”—thankfully, for more reasons than one. This year has been something of an enigma in the local advertising landscape. While several marketing shops have closed, sold or changed focus, we find revenues up here at our place. Our clients are coming off good years as well, both spending more for creative services and having us place more media dollars on their behalf. So it would seem startling at first to think some of the players in the marketplace have gone away or changed. I would argue things in mid-Missouri are humming right along and area media outlets and agencies should be looking forward to a prosperous 2008.
There is a sense of caution in the air right now but not a sense of foreboding. I don’t have any clients looking to slash the marketing budget by any means. Overall, if I can make a glittering generality here, dollars spent on traditional types of media in all markets are remaining the same or experiencing small changes. I think advertisers are considering their options more carefully than ever before because there are so many options available, including several relatively new to mid-Missouri. So in other words, some businesses are certainly increasing their budgets to explore new opportunities while other might be reapportioning the marketing mix to try new types of advertising. The big gains have come in Internet advertising and look to remain that way for at least the near future. I’m guessing this is no big surprise to any of us, really.
As I write this during the holiday season, the jury is still out on how the shopping season will end up for retailers, another indicator many experts look at to determine our economic health. According to our staff retail expert, retailers are running some unusual promotions this holiday season in an effort to divest themselves of overstock levels of cold-weather clothing due to an unseasonably warm autumn season. So don’t assume the buy-one-get-one-free sweater offers or 70 percent off upscale menswear sales prior to Christmas were a sure sign of economic disaster.
In fact, when sales are uncertain, the business with all the buzz gets all the bucks! I advise our clients not to fall into the trap of slashing the marketing budget during the “off” times of the year. Sales allow you to keep the doors open, so why would you want to cut your marketing budget during slow times? On the contrary, this is the best time to advertise. Advertising during Christmastime, for example, is a slam-dunk for retail folks. Let’s think about it for a moment. If you spend the bulk of your budget during your industry’s peak time of the year and ignore the slower months, then you have ensured lagging, cyclical sales. If you are one of the few building awareness and strengthening your brand year round, then your message is the only one being imprinted in the consciousness of your potential customer on a consistent basis. Plus, there is less clutter with which to compete. Sure everybody wants their share of the peak-season pie, but how about being one of the few who is capturing sales no matter the season? If your name is the one they remember when it’s time to purchase, that’s what I call ROI.
Can I draw a definitive conclusion about the health of the mid-Missouri economy based on what I see? No, it would be unfair to say I have the crystal, ball and I have never professed to be an economic pundit of any sort. What I do know is, at least among the businesses we serve and partner with, sales are up, and Columbia continues to be an energetic community where we all love to live, work and play. And we all see evidence of the many efforts aimed at attracting more residents and employers to Columbia. So let’s do our best to keep Columbia thriving and show those folks on “Madison Avenue” that we know a thing or two about success.