The silver lining to the cloud

It was my birthday this week and the usual “you’re past it” gags came out (despite only being 25 I might add!), so it somehow seemed fitting to write a bit about “The Recession”.

Yup, the economic downturn is now officially being mooted as the start of a recession and the conversations on what will happen to advertising/marketing spend have already begun.

Marketers were predicted to decrease spend by 3% at the start of the year whilst the latest Bellwether Report (Q1 2008) reveals that, for the second successive quarter, Q2 marketing budgets have been downgraded. Original estimates of a 3.2% increase in 2008 ad spend are looking ropey if reductions continue and this positive prediction is largely due to continued online investment counteracting reductions in more traditional media, especially below-the-line. (In fact, online spend has already overtaken press and it’s predicted to overtake TV by 2009.)

Now, I’m no economic analyst but I understand the logic that positions our friend the ‘marketing budget’ as one of the first victims of money-saving cutbacks. But, I’m going to stand by him – leave him be. In fact, feed him some more if you can!

The latest Brandz report from Millward Brown suggests that investing in a brand is actually one of the best courses of action during a period of economic turbulence:

“Strong brands generate superior returns and protect businesses from risk. Our data shows that strong brands continue to outperform weak ones in terms of market share and share price during recessions” says Joanna Seddon, CEO of Millward Brown Optimor.

Strong words, but there are also strong supports:

• Reports suggest that only 10% of consumers are motivated exclusively by price
• There are strong links between Share of Voice and Share of Market – invest and increase your share of voice whilst others are decreasing theirs and snatch their share of market as well
• Companies that have brands in the BrandZ Top 100 have performed significantly better in the stock market when compared to the S&P 500
• Loyal customers stay confident in a strong brand when the going gets tough. Confident customers are less likely to switch brand
• Potential customers, staff and shareholders are more risk averse during a recession. A strong brand alleviates risk in the shareholder’s mind
• There is a greater chance of a company’s value remaining buoyant in an economic downturn if supported by a strong brand

And there are cases to point to: P&G claim to have a “When times are tough, you build share” philosophy; Dutch retailer Albert Heijn tried to compete on price in 2003 only to trigger a price war that resulted in them losing share to competitors; and so on.

So could a recession become an opportunity? Perhaps, but it’s not just spend spend spend. As Millward Brown rightly points out, each industry requires its own recession strategy as each will be affected differently. Offensive or defensive, value focused or product focused, weather the storm, etc. Either way, a strong strategy utilising marketing spend is essential.

As for my own recession… well, 25 isn’t that bad at all. Really…

Brand Power

I came across a Frubes Brand Power advert the other day and was a bit confused by it all. I'd never heard of 'Brand Power' before so I thought I'd have a bit of a potter on the internet.

Their mission statement centres on providing "rational information about grocery products to help you make an informed purchase when you're at the supermarket". Apparently they make TV ads, websites, catalogues, etc but from a "Facts and Value through information" point of view, as opposed to glorifying the product through a more traditional advertising approach. Put simply they're trying to cut through the bullsh*t that we're paid to create!!

I can kind of see where they're coming from; thinking of the consumer first, providing a useful, informative service, trying to promote honesty through neutrality, allowing the real benefits of the products to shine, and so on. But, for me, there seems to be a few real weaknesses with this.

1. To get a Brand Power advert you have to sponsor them. Some might say pay. Paying for neutrality? Hmm...
2. The adverts often conflict messaging used in the brand ads.
3. Brand Power is neither a recognised industry body, nor is it seen as one by the average Jo Consumer. It lacks gravitas. That little "Brand Power" stamp in the bottom corner doesn't mean anything. Nor does the dodgy newsesque music that accompanies it.
4. I don't believe for a minute that they'd mention a flaw or weakness in a product (i.e. Aquafresh is great for cleaning your teeth, but if you don't want stinky breath you should try Colgate).
5. I'm not sure that they deliver on their promise - who decides that Frubes are "Fun to eat"? Fun? Because you don't need a spoon? Really?
6. The adverts are really really bad.

Attempting to be neutral and providing an informative as opposed to a marketing service seems like a nice idea, especially in the current climate of consumer power. I just don't see this approach working and, more importantly, I don't buy it for a minute. And neither do many others by the look of it: their website invites product users to write their own reviews on the brands that they cover. Across all their brands and products they've only had 19 pieces of input so far... And how would Nescafe feel if they were paying Brand Power x amount of cash just for consumers, and presumably Brand Power as the voice of the consumer, to slate them!

In fact, albeit a little vain, I quite like being wowed by those shallow brand ads sometimes, and I'd like to think I could cut through the bulk of the crap myself. What do you mean you don't get hooked up to a jellyfish when you buy a 3 phone? If I use Lynx I won't turn into chocolate?

I reckon Adland's safe.