Marketing In A Meltdown

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Charles is right. It's slightly odd that there is not more chatter amongst ad people about the current turmoil in the financial markets. The breadth and depth of the tumult this week is leading to some pretty fundamental questions being asked about the way things are done. This infographic from the New York Times kind of says it all: 29 companies losing over a trillion dollars in value over the past year.

I was asked to do a piece for New Media Age the other day and one of the questions was about adapting models in the face of a new economic climate. My answer focused around how I felt that in tough times digital has the potential to deliver unprecedented value. And I really believe that.

Companies that have the right approach recognise that digital facilitates greater experimentation and innovation (and what better time for innovation) through low cost of entry and the ubiquitous availability of free online tools and services. Network effects mean more opportunities to share, rapid and easy proliferation of new ideas. Social aspects enable interaction, engagement, customer insights (and what better time to stay close to your market). And if that's not enough, David Armano has captured more reasons why digital makes sense in a recession here.

But. Only companies with the right approach. And that's the thing. There is still a huge gulf, I believe, in those that I think will embrace the real opportunities presented by the web and those that won't. And it's a gulf in mindset.

In his seminal presentation to the music industry, Ian Rogers talked about how models built on scarcity were ultimately doomed. And that, to me, is just it. Most existing models are built on principles of scarcity. The organisations that will win will be the ones that recognise the opportunity presented by ubiquity. Really, the choice is yours.

Scarcity says 'I go in search of the things that I like'. Ubiquity says 'The stuff I like comes to me'. Creating a destination and expecting people to come to you, or distributing your content to make it easy for people to find and access it? You decide.

Spending time trying to find the good stuff in an ocean of content, or having 100 of your likeminded friends do it for you via delicious networks, twitter, comments, blog posts, twine? You decide.

Holding onto your ideas because they are, you know, yours. Or believing that the more you share the more value will come back to you? Your choice.

People don't stop talking in a recession. So making your marketing dependent on a scarce resource - your advertising budget. Or making it more dependent on an abundant resource - your customers? You decide.

Resources to create: scarce. Resources to co-create: ubiquitous.

Attention...scarce. Interest...ubiquitous.

Tough choice. Not.

Comments

[James Cherkoff]

Well said Neil. As we've seen this week no one is to big to go under.

[The Kaiser]

watch the kaiser edition next week. Doing a series which touches on some of this.

Nice work Neil.

[neilperkin]

Thanks James.
Marcus - good stuff. Look forward to reading that.

[Nick Burcher]

I agree and disagree with you!

In the current climate digital is a key area for marketing. As the economic climate becomes more difficult then focus becomes more short term. Generic branding activity like sponsorship is suffering as marketers / advertisers focus on ROI and short term sales gains. The accountability of digital is a great strength and channels that can offer direct, provable ROI like Search and Affiliate marketing will endure against most others.

At the same time we are seeing companies move from NPD to the tried and tested with old products revitalised and badged as 'new.' There is also an argument that consumers return to what they know in times of uncertainty. Is it any wonder we are seeing the return of Wispa, Opal Fruits and Marathon or the remixing / revitalisation of age old brands like Strawberry Shortcake?

So I think it is a tough choice when it comes to social media as the effects of social media are hard to quantify. What is the value in sales terms of a 'Fan' on Facebook, how much is a positive blog review actually worth?

I agree with your sentiments but think when budgets are limited and focused on getting returns, it is a hard argument to transfer money from what you know works, into a new area where returns are less certain. Some categories like the music industry are being forced into re-evaluation as their old models have stopped working, for the majority though the safest attitude is 'if it ain't broke [yet], don't fix it'.

I really believe that social activity can work well for brands and think that those who embrace it properly will benefit. However, uncertain times are also the hardest times in which to experiment.

[neilperkin]

Hi Nick. Thanks for the comment. Retrenchment is a typical response in tough times but I'd say that from a digital perspective at least, the efficiences that can be gained by using digital to spread a great idea, create a great story, or a seamless interaction, make sense. The tools and approaches that can facilitate innovation are, for the most part, free. But getting the most out them requires the right mindset from the beginning. Innovation powers great products, great marketing, great word of mouth. It's hard, but I'd say there's never been a better time to focus on generating new ideas and approaches.

[Nick Burcher]

I agree and I think forward thinking brands are realising some of the opportunities. However at the moment I still think that the absence of a single media owner to drive it, the difficulty of assigning ownership (is it PR? advertising? media? customer service?), concerns about UGC positioning and the lack of equatable measurement metrics means that (for the time being) adoption of social media in marketing will continue to lag social media adoption by consumers.

[neilperkin]

That's a good point Nick - I don't think it necessarily looks exactly like any of the predefined portions by which we manage (or segment) what we do. But I do think that the right mindset will help you innovate and adapt to rapid change wherever you're sitting - so perhaps that starts with challenging how we define things. Simply put, I think there's some that will really get this, and some that won't.