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What marketers can learn from previous economic downturns

Adage India 2020-05-22 21:30:21

“What happened to marketers, media and agencies during these downturns?" Johnson writes in the white paper.  "There were layoffs, closings, cutbacks; no surprise there. But I was more surprised and intrigued by another point: the innovation that has occurred during the toughest times.”

Adversity is the mother of innovation

"More than one advertising executive has publicly acknowledged his debt to the depression," Ad Age wrote in 1932, "admitting that it was not until the pressure of necessity exerted itself that he really found out how to get one hundred cents’ worth of value from the expenditure of every advertising dollar. The new attitude toward advertising is not less hopeful and enthusiastic than the old—it is only more practical and more determined."

Radio and refrigerators, which were beyond the means of average families in the 1920s, rocketed to majority household penetration in the Great Depression. Capitalizing on the technology, President Franklin D. Roosevelt exploited the new medium for his “fireside chats,” and General Foods introduced a range of frozen foods.

Time Inc. launched most of its biggest magazines during recessions. At the nadir of the Great Depression in 1933, discussion of television at the National Association of Broadcasters convention made front-page news in Ad Age.

Bill Gates and Paul Allen founded Microsoft in 1975, near the bottom of a deep recession. The IBM Personal Computer came amid the 1981 downturn.

Car rebates … frequent-flier programs … IRAs … discount brokers all took hold during recessions.

Value plays (Miracle Whip, a cheaper alternative to mayonnaise introduced in 1933; generic products in the early 1980s) often emerge in tough times. But so can premium products: Fancy Feast cat food, Absolut vodka and Calvin Klein underwear all grabbed a foothold when the nation was mired in recession, putting the brands in a strong position for the upturn.

What to do now

People are hurting. Businesses are hurting. The ad industry is hurting. The world has changed, but things will get better. Now is the time to plan for a better future.

"The proper marketing attitude for today embraces the concept that the time to do something is when others do nothing," Ad Age wrote in 1973. "Don’t look to a frightened competitor for guidance. Follow your own instincts; drive home your marketing advantages. Remain visible in hard times and your position will be much stronger in good times."

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