In 2001, the publisher of the five-month old LUCKY magazine asked me to write a presentation addressing the question: "Why Launch a Magazine about Shopping at the Beginning of an Economic Downturn?" I gave her three answers: (1) Consumers are ready for the combined benefits of fashion magazines, catalog shopping & e-commerce, (2) Twenty something women who love to shop... love to shop! and (3) When times are good, you should advertise; when times are bad, you must advertise.
As part of the presentation, I included a line chart showing the decline of the Dow Jones from 11,600 to 9,200, which I then covered up bit by bit with expert opinions supporting the importance of maintaining marketing budgets during a recession. These were the following:
- "Companies that increase their marketing activities during the recession are more successful than companies which cut back." PIMS database of 1,000 companies.
- "Economic downturns reward the aggressive advertiser and penalize the timid one." Strategic Planning Institute
- "The most successful companies [maintain] their advertising investment when the economy slows down and weaker competitors cut back..." London Business School
- "During an economic downturn, a strong advertising/marketing effort enables a firm to solidify its customer base, take business away from less aggressive competitors, and position itself for future growth during the recovery." Coopers & Lybrand
- "Maintaining 'Share of Mind' costs much less than rebuilding it later on." American Business Model
I have always felt a sort of sympathy for car manufacturers spending millions of dollars on television advertising that was bound to get lost in the clutter of two to three automotive commercials per commercial pod (one national, one local and, more recently a second national ad separated from the first by some kind of "pod-breaker"). Personally, I found myself forwarding through automotive ads on a somewhat regular basis despite my being generally inclined to watch TV commercials. But it was a no win situation for automotive brands. While magazine publishers tried valiantly to impress upon them the value of print advertisements, car companies could not afford to take money out of TV so long as their peers were still there.
Fast forward to 2008 and 2009 and a sudden automotive silence within TV commercial pods. It was eery and a bit scary. Careful what you wish for - one might say. And then came the Super Bowl. During the game, there were two brands who dared to pony up the money for multi-million dollar spots: Hyundai and Audi. Audi, the insurgent brand that has often been willing to take risks, positioned its brand against other luxury autos through years, coming out as the only one with the performance attributes worthy of a James Bond. Hyundai, meanwhile, showed compassion for a country of would-be consumers paralyzed by their fear of losing their income. "If you lose your income, we will allow you to return your Hyundai," the announcer promised. Quite daring. Now, American Express will reimburse you (up to $300, I believe) if you break something you buy with the card or change your mind and are unable to return it. And that strategy has often given me the piece of mind that allowed for the indulgent impulse buy. But this is taking that concept to a whole new level! And rightly so. Truly brilliant, I think, to address the problem head on. To remove the roadblock on the path to purchase.
So the message was smart, but equally as important was the audacity on the part of both car companies to see this calamity as an opportunity and to finally gain the unique benefit of television advertising without getting lost in the clutter. Did it work? Yes, it did. Both Hyundai and Audi have experienced increased sales in 2009 - an achievement not to be underappreciated.
-- Originally posted May 14, 2009