Companies Tailor Ads For Recession
The airways, newspapers, magazines are all filled with ads telling you to spend money, despite the hurting economy. Marc Fleishhacker of the ad firm Oglvy & Mather talks with host Jacki Lyden about how companies are trying to get consumers to open their wallets.
JACKI LYDEN, host:
Okay, so say you're a company with a product to sell. How do you get people who don't want to spend money to open their wallets, especially if you don't have as much money to spend on marketing? Maybe you try something like this.
(Soundbite of advertisement)
(Soundbite of music)
Unidentified Woman #1: Spend $200 on a new camera in these times? No way. (Unintelligible), really no way.
(Soundbite of advertisement)
(Soundbite of music)
Unidentified Man #1: The inherent value of a Range Rover Sport easily handles the ups and downs of sand, mud and the economy.
(Soundbite of advertisement)
(Soundbite of music)
Unidentified Woman #2: Grand. At only 25 cents a biscuit, you'll find any excuse to eat in.
LYDEN: Well, we don't need any excuse to take a look inside the ad business. Marc Fleishhacker is a managing director with Ogilvy Consulting, part of the Madison Avenue ad giant, with a few clients you might have heard of: IBM, British Airways, Sears.
Marc Fleishhacker's been developing new marketing strategies for the recession, and he joins us from our New York studios. Hi, there.
Mr. MARC FLEISHHACKER (Managing Director, Ogilvy Consulting): Good afternoon.
LYDEN: For months, companies have acknowledged the recession in their advertising, and the ads that we just heard all aired yesterday. So, there's a definite theme.
Mr. FLEISHHACKER: The theme is about price and frankly, that's the one driver for anybody to spend money when it comes to discretionary spending.
LYDEN: We've heard a lot about Starbucks trying to combat its image as the $4-cup-of-coffee company, and one of the things it's fighting back with is a discount breakfast-and-coffee deal, among other things.
But I was wondering, is there a danger of going too far, in a way, that sort of cheapens or takes the mystique off the brand?
Mr. FLEISHHACKER: I think the danger lies if you only talk about price, and don't talk about what I like to call the other part of value or values, and that's not just about price. That's about what you believe in as a company, whether it be the quality of products or services you provide.
LYDEN: What kind of messages can we expect as long as the recession lasts?
Mr. FLEISHHACKER: We will see more and more messages talking about this duality of values. Recently, one of our clients that makes Ragu spaghetti sauce, they used to say, you put natural things into what you made; so do we. That was prerecession.
Now, they're saying, the perfect meal when your family is growing and the economy is shrinking. Both of these advertisements, print advertisements, are about family and show a nice, big picture of Ragu spaghetti sauce.
(Soundbite of laughter)
Mr. FLEISHHACKER: So, what's changed is all of a sudden now, we're talking about your family. Families become the code word for more than one. It's not just about you, it's about you and your family. It's about good price across a number of people, and your family is growing, the economy is shrinking, and Ragu is there to help you.
LYDEN: What about where companies are spending their marketing dollars now. Where are they spending them?
Mr. FLEISHHACKER: With technology today, we're able to understand at the individual level of a ZIP code, whether that specific area in a community is hurting more or less.
And so, in determining whether you're buying print advertising, whether you're buying television advertising or even more surgically, where you're placing your online and Internet advertising, you go into those areas where there is still a capacity to purchase your products. So, targeting is everything.
LYDEN: Assuming we recover from this recession, and let's assume this.
Mr. FLEISHHACKER: Please.
LYDEN: Do you see companies moving back to their old strategies, or do you think this kind of direct targeting is going to be a permanent change?
Mr. FLEISHHACKER: We don't live in a black-andwhite world, but I do believe it will be, for the most part, a permanent change. And frankly, if this recession hadn't occurred, we as marketers might have had to invent it.
No, we didn't. We're not taking responsibility for the recession. But the point is, we all owe it to ourselves, we owe it to the shareholders of our client companies, to be far more measurable and to be far more rigorous in the way we apply math to marketing.
So the world, forced now by recession, will not go back to what it was, which was not measurable enough.
LYDEN: Marc Fleishhacker is with the North American office of Ogilvy Consulting, a division of Ogilvy & Mather, and he joined us from our New York studios. Thanks very much.
Mr. FLEISHHACKER: Thanks for your time.
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The Secret To Selling When Nobody's Buying
The dairy industry hired personal finance guru Suze Orman to champion milk as a bargain. It's just one example of "recession marketing" — urging people to buy merchandise that saves them money. Courtesy of www.whymilk.com hide caption
The dairy industry hired personal finance guru Suze Orman to champion milk as a bargain. It's just one example of "recession marketing" — urging people to buy merchandise that saves them money.
Courtesy of www.whymilk.comFlip on the TV, click through the Internet and you'll see advertisers struggling with a dilemma: How do you sell stuff to people when nobody's buying?
The answer, according to the ad-world gurus, is "recession marketing." It's a way of raising money from lower expectations. Turning the bad times into glad times; dearth into mirth.
The messages are clear: Stay home and cook dinner instead of spending money at a restaurant. Do your own house cleaning, gardening and home repair. Buy more merchandise to save more money.
"Consumer marketers are focusing their most recent ad campaigns not just on the bargains they're able to offer, but also on the economic value they can deliver at a time when the country is acutely aware of what it's spending and where," writes Tessa Wegert on the ClickZ Web site for digital marketers. "Ads that take a decidedly cash-conscious spin are cropping up on television, in print, and of course, online."
Mary Beth West, head marketing honcho at Kraft Foods, explained recession marketing in a 2008 speech delivered to a bunch of advertising professionals just as the economic downturn was beginning to set in. The recession, she said, presents companies with a "marketing opportunity." And she encouraged salespeople to "reframe or redefine your value proposition to that consumer target."
In other words, she said, "How do you think about redefining what your brand stands for in a world of tight economy?"
For example, she said, Kraft planned to encourage dine-at-home experiences because fewer people dine out during a recession. And the company launched a campaign informing consumers that Kool-Aid is a really sweet deal: one-third the cost of soda.
Back To Basics
Allstate insurance is meeting hard times head on. In one TV spot, featuring the reassuring actor Dennis Haysbert (perhaps best known as President David Palmer on the Fox drama 24), the company reminds viewers that it got its start in 1931, during the Great Depression. "And through the 12 recessions since," Haysbert says, Allstate has noticed that "after the fears subside, a funny thing happens: People start enjoying the small things in life. It's back to basics, and the basics are good." Home and auto insurance, apparently, are among the basics.
Hyundai, the Korean auto manufacturer, is running an ad in which the voiceover intones: "Buy any new Hyundai and if in the next year you lose your income, we'll let you return it." Because, the ad continues, "We're all in this together. And we'll all get through it together."
Other companies have joined the recession procession. Fitness centers, cruise lines, hotels, office supply firms all offer discounts pegged to the wheezing economy. The dairy industry hired personal finance adviser Suze Orman to champion milk as a bargain. Kellogg's crows in an ad that its corn flakes cost "less than 50 cents a bowl." Wal-Mart combines two New Year notions and offers discount exercise machines that will "trim your body and your budget."
The First Thing To Go
A recession, says Mike Beltrame of Beltrame Leffler Advertising in Indianapolis, "is always a good time to cut the waste out of marketing budgets." An economic slowdown "forces a company to evaluate the most efficient target audiences and the most effective marketing tools."
"Keys to staying strong during and after recessionary periods," Beltrame says, "include maintaining brand awareness levels and maintaining brand image." That is, the one thing companies can't afford is to cut their marketing budgets so drastically that they risk diminishing the strength and visibility of their brand.
A consumer's ability to easily recall a brand's name has a direct correlation to sales, Beltrame says. "It is risky to cut marketing budgets to the point of losing name recognition and awareness, allowing other companies to gain strength and market share coming out of a recession."
Ad critic Bob Garfield of Advertising Age says, "It is a truism — and it's probably true — that if you spend into a recession, you will gain market share cheaply. However, in all of human history, no one has ever done so. Advertising and marketing expenditures are always the first thing to go."
Even so, recession-themed marketing has become so popular, writes Tessa Wegert, it is "poised to supplant green-themed campaigns."
After all, with lower gas prices and higher market fears, more and more consumers may see environmental consciousness as just one more luxury they can no longer afford.