Wall Street Meltdown and the 2009 Digital Marketing Outlook (Part 2)
As promised in Wall Street Meltdown: 11 Ways It Affects Digital Marketers, I’m wrapping up with a continuation of the 60,000 foot view of our industry in light of current economic turmoil. No doubt I’ll get back to the close-up view next time, but for now, to get all the bad news talk behind us, […]
As promised in Wall Street Meltdown: 11 Ways It Affects Digital Marketers, I’m wrapping up with a continuation of the 60,000 foot view of our industry in light of current economic turmoil.
No doubt I’ll get back to the close-up view next time, but for now, to get all the bad news talk behind us, let’s do this thing. There are actually some silver linings in here. And unless Google cancels it, even a dance scheduled for Q3.
Carrying on our list of likely outcomes of recession:
6. In-house focus shifts to value, process. Post-downsizing, companies will be left with a core of “less flashy” performers as well as A-Listers, and the folks who put up fake, or falsifiable, short term results will find their careers stalling out. What does this mean? Combined with a slowdown in demand, it means companies have more time to plan, to figure out what they do well, and to execute better. Now is absolutely the wrong time to focus purely on endgame results, because in a financial sense, many companies and their clients will be doing less top line business. It’s a great time to focus on execution and process – the stuff that creates the results when the economy comes roaring back to life.
To put it another way, it’s plain now that many of those being rewarded for “performance” in good times were over-rewarded. And today, solid performers bumping up against decreases in demand shouldn’t be treated overly harshly.
If a company or a personal journey can hit what Seth Godin calls The Dip, well why not extrapolate that to the whole economy? Relatively speaking, many companies aren’t going to be rolling in dough. What they can do is retrench, retool, rethink, and redouble their commitment to increased productivity.
You can do all of this in jeans and a t-shirt. (OK, even during the bubble, most people in the tech sector did everything in jeans and a t-shirt. Now, you can feel like you’re in tune with the frugal times, rather than like you’re diverting attention from your immense wealth by wearing sneakers.)
7. Deals! Deals! Deals! Are you like me? Do you like getting four-star hotel rooms for $139 a night? Look for three or four years of dampened demand for business travel, conventions, etc. (though hopefully not too dampened in our sector). Bargain hard and live it up for less. Seriously: while everyone else hunkers down and avoids “excessive travel,” there are plenty of reasons to attend industry conferences, especially in our field. Real consumer demand for search results and online content hasn’t dampened one bit, though advertising revenues may level off. Similarly, the pace of product development and the array of complex changes in search marketing technology and strategy continue to charge ahead in dizzying fashion. So it’s important to keep pace. Staying home and sticking to your knitting is not the best choice, though taking time out to read up is a decent (insufficient on its own) alternative to conference travel. On the reading thing, see point 11 below.
8. Life re-evaluation The post-9/11 malaise led to some people in early and mid career to completely re-evaluate their lives, get off the fast track, and do something completely different. A lot of times, it was for great reasons; other times, it was based on emotion and general disillusionment. What seemed like a reasonable quest for some pot of gold at the end of the rainbow vanished as a larger perspective shook people’s values up a bit. (This is all chronicled in Po Bronson’s popular book What Should I Do With My Life?. Bronson’s previous bestseller, The Nudist on the Late Shift, chronicled the absurdities of the dot com boom era. Now would be a great time for him to write a new version of that one, but we may have to wait for Nick Denton to have a go at Nudist 2.0 this time around.)
Anyway: my thought for you on this one is, if rapid changes in markets and prospects cause you to re-evaluate your values and priorities for good reasons, hey, that sounds real and healthy. But from what I can tell, about half of the “give it all up to find myself in a completely new career” people were probably chasing something just as illusory. Remember that little kid who thought his life would change if he got an archery set, or if his parents let him switch from soccer to lacrosse? And the archery set gathered dust in the corner, and the lacrosse league left him with welts all over his face and body, so he switched again to a nice, sane, sensible, padded contact sport like hockey?
Life-changers sometimes find themselves missing the old rat race. When the economy improves and the social network in their industry regains its former confidence, they find themselves wishing they’d just stuck with it. So unless you’re sure, you might want to stay the course before buying that shrimp boat or taking a job as an overeducated, 39-year-old Manhattan nanny.
9. Social dislocation and real-world problems. Let’s face it: comfortable people in comfortable careers can be insular. They can look at markets and demand patterns and experience an unhealthy degree of anxiety about their own material future. Meanwhile though, several million Americans have actually lost their homes. You don’t have to change careers completely to think about how to do more to help people in need. A hurricane is a one-time event that triggers outpourings of charity more readily. A long economic downturn is harder to put your finger on. But as with New Yorkers post 9/11, you can only hope it’s a time when people come together, and try to figure out a way to do a little more for others, even if they’re feeling the pinch themselves. Pinches are relative.
10. Negative outlook for traditional ad agencies Everyone is talking about the impending “flight to accountability” in advertising. Will it really happen? Fellow search and digital marketers, owners of nicely categorized content and classified websites, and analytics gurus, we can only hope so! And who has typically shunned accountability in marketing? Those who help companies spend the biggest budgets: traditional ad agencies. (Don’t take my word for it: trust an adman like Joseph Jaffe if you prefer.) Combine belt-tightening with the secular trend towards diversification out of big traditional ad spends, and it stands to reason that the traditional ad agency will take yet another body blow.
As digital marketing matures, to be sure, people in our field now want to take the same 360-degree view of brand power that has been a perennial motivator for heavy investments in identity work, creative development, and diversified media buys. But what has radically changed — and will be magnified by economic hard times — is the customers’ susceptibility to a pure story.
Seth Godin has covered both the yin and yang of the sell, in two separate books. All Marketers Are Liars playfully explores the stories and backdrops marketers create to generate loyalty and cult followings, to add profit margins to products and services that might otherwise face pressures towards commoditization. But in Free Prize Inside, Godin explored the underpinnings of today’s customer reality: in the information age, the story has to be true and verifiable.
And even without the storytelling or the investment in brand image, some companies can grow rapidly purely by focusing on “getting better reality”. The storytelling and aspirational lifestyle fabrication business will remain as strong as ever in the area of luxury and fashion; in areas like music, beverages, jewelry, colognes, perfumes and some beauty products, and the like. But in many fields, consumers will be able to zero in on false claims, and ferret out superior performers, fueled by all of the tools of the current age, including user-generated content and online social networking. And eight-figure ad campaign exercises in putting lipsticks on pigs (Chrysler and GM; Microsoft Vista; Tylenol and Lipitor) will become an increasingly pointless and wasteful exercise. Ad agencies that lose business in traditional forms of high-end obfuscation may be forced to shift their resources towards low-level superstition creation (Herbal Magic). Not a pretty picture.
The bottom line: media budgets are going to be cut, ad agencies will downsize, and virtually no civilians will shed a tear or attend a memorial service for the 30-second spot.
When budgets ramp up again, many of those dollars will go straight into digital marketing and content production. Will the agencies be ready for battle?
11. ‘Smart’ is sexy again! I can’t resist a comment on the beginning of the new Obama era. Even if you’re a Republican, you have to admit it was all too easy for all of us to “feel smart” in contrast with the fearless malapropist George W. Bush. And in such a climate, genuinely intelligent individuals seemed to stick out like, well, Obama’s ears. Men like Ted “Series of Tubes” Stevens and women like Sarah “Vancome Lady” Palin seemed somehow normal. The tide has turned, friends. The contrast is plain: in the words of Moxy Fruvous (umlauts omitted for space reasons), “I like to go out dancin’ / My baby likes a bunch of authors.” Might we be entering an era where “goin’ out dancin’” and “lovin’ a bunch of authors” are not mutually exclusive? Tim Ash will have thousands of groupies. Malcolm Gladwell will seem seven feet tall. Page and Brin? They’ll only be billionaires. The View will be cancelled, to be replaced by Camille Paglia’s Morning Rant.
Your highly-functioning brain and your future success: now correlated. Let’s hope. Just don’t trust pointy-headed banking geeks toting risk models.
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