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September 2008

Marketing In Times Of Financial Uncertainty

Whenever markets shift, there is an opportunity to compel consumers to re-evaluate brand choice and switch.  Seth Godin today says hang in.  I say, up the market spend and thank Merrill Lynch and Lehman Brothers for stirring things up.

Consumers use context to make decisions regarding how they are going to act.  if financial turmoil creates stress and conflict, then consumers will be looking for stress relief.  This could be in the form of a vacation for those looking to escape, or new financial products that offer a level of safety.

If I was JPMorgan Chase right now I'd be communicating that my balance sheet is stable and there has never been a better time to visit a financial adviser.  They can encourage prospects to come in for a free rbalancing of the portfolio or offer a path to increased safety.  Lose that nonsensical rewards program.  Now is the time for sanity and reality.

Tension propels purchase.  Opportunities like this do not come along every day.  Why is it that not one marketer is stepping up their game? 

PS:  Did I mention there is a fire sale on media assuming the politicals don't buy it all.

Truth in Marketing - Government Needs to Get Out of the Business

We sometimes get so caught up in market positioning and language that the truth becomes obscured.  In reading a column this week in the New York Post by John Crudele, I realized that the greatest practitioners of this, to our detriment, is the United States Government.

While I understand the role of government is not to create panic in the streets,  not revealing the truth doesn't give us the ability to act on accurate information. As Dom Rossi, my mentor at N.W. Ayer Advertising would say, "look reality in the eye and deal with it." (he actually had a light up neon sign on his office wall with that inscription)

In his column John describes the housing crisis as  a function of the "real" unemployment numbers.  The government claims that there were  84,000 jobs lost in August, while the unemployment rate rose to 6.1 percent from 5.7 percent.  However, the Labor department adds in 125,000 jobs as an adjustment for jobs that can't be counted.  It is based on a mystery model called the birth/death model. What is amazing is that the government provides a breakdown of what sectors of the economy the made up jobs come from.  For example, 16,000 jobs come from new companies in construction (say what) and 26,000 from new leisure and hospitality positions.  Are they kidding?  In this economy?

The government goes further in obscuring the truth by not fully publicizing what is called the U-6 jobless rate. This rate includes people that are unemployed and those working part time because they can't find full time work.  The U-6 rate plus the reported unemployment rate is 10.7%.  If you add in those people that stopped looking for work the rate can get as high as 15%.

Now as John points out, this explains softness in retail and why the real estate market is not coming back any time soon.  There are significantly fewer people who can afford to buy a house.

The point is that if you knew that the unemployment rate is 15%, you would think long and hard about the need to change our economic policies and who is in office.  We would understand that taking over Fannie Mae is a short term fix.  We would set more realistic expectations at work by understanding that how much we sell will be deeply impacted by 1.5 out of every 10 Americans being either unemployed or under employed.

It's time to start telling the truth to the American people.  It's time for government to get out of the marketing business.  I hope either the Democrats or the Republicans try something as novel as telling it as it is vs. the cliched speech and talking points they drill into the electorate.  Yes we need "change", but enough already.

Time for a New Approach to Communications and Advertising Strategy

A new methodology is needed that can define a brand so that it is big enough to leverage the many forms of communication available today.  We need to move away from the methodologies that were used to develop short form communications and rethink the very foundation on which communications are developed.

Every advertising and branding agency claims to have a magic black box that can cure all common brand and communications diseases.  The need for a black box is born out of the client’s need to feel comfortable with a creative direction and the need for the individuals responsible for message development such as the creative team to have some understanding of the brand before developing mass or finely targeted communications.


These approaches follow one of two schools of thought.  The first uses interview and optimization techniques to determine what is an idea worth developing.  It routinely involves some understanding of the competitive landscape, a general sense of consumer trends, interviews with key executives mixed with a list of functional benefits associated with the product.  The methodology results in a written concept and sometimes creative work that is constantly changed until a room full of prospects in a focus group facility yawns their approval.  Ideally they actually show some kind of enthusiasm.  The result rarely works since it is based on a visceral reaction and is not generally predictive of behavior.


What is needed is a new synthesis of the latest thinking in the behavioral sciences.   One based on the belief that consumer purchasing behavior is predictable across groups of people.  The development of ideas should be based on well researched patterns of existing behavior where a brand is literally mapped onto these current behaviors.  This would have the effect of demonstrating to the consumer how they should relate to the brand, how the brand information should be internalized and exactly what part of their life the brand will improve.  Consumer exposure is then used to refute or confirm the previously developed hypothesis.  The result is a clear path for communications development.  It also results in a much clearer understanding of potential functional deficiencies that need to be addressed if a brand desires to dominate a market.


At minimum it provides a fresh and alternative perspective on the brand.  At its best, it sets a new direction that will accelerate market share and insulate the brand from competitive or generic encroachment.  I learned a great deal from Gad Romann who remains a great source of information and inspiration on the topic.  There is no one else that is even close.