Mister Three Sixty

 Times are tough. There is pressure to cut communications spend. What should people working in Marketing and Communications do to ensure their brands survive the Downturn? McKinsey&Co argue that the two biggest managerial mistakes in Recessions are first; being surprised by the severity of the downturn, and second; being caught unawares by the recovery. So it seems wise to look back for any clues on what we should do in the present day. Problem is, very few were working in the same types of job in the recessions of 1974, 1980 or 1991 – there’s just not that much relevant experience to draw on.

Mister Three Sixty would like to transport you for a moment to the American Midwest during the Great Depression. Picture long lines of unemployed men queuing at soup kitchens; others are wandering from town to town searching desperately for work. With panic on Wall Street and declining sales it would take a brave manager to resist pressure from shareholders to cut marketing budgets and scale back on advertising and public relations.  What would you do? Would you do what Richard Dupree, President of P&G, did? He spotted a new opportunity and seized it with bravery. In fact, P&G have been doing the same thing in every Recession ever since.

Dupree’s genius was to focus on radio, the exciting new technology of the 1930’s. His new strategy was the ‘Soap Opera’. He knew consumers still needed to wash their clothes, whatever the economic climate, so the first foray into branded content was born. ‘Ma Perkins’ sponsored by Oxydol, launched in 1933. By 1939, P&G was sponsoring 21 radio programs, virtually doubling its radio spending every two years during the depression.

Nimble and astute

Recessions accelerate changes that are already taking place. We need to be nimble and astute enough to spot the patterns amongst the chaos and take advantage of them. 2009 is 150 years since the publication of The Origin of the Species. Darwin showed that species survive when they are robust enough to survive challenging environments but also adaptable enough to evolve. This is the simple answer to recession survival: Be tough but be prepared to change.

In Recessions, businesses are forced to cut expenditure. Mister Three Sixty isn’t arguing that this is always the wrong course of action. The real question is over what you cut and by how much. Detailed and longstanding research from the Profit Impact of Market Strategy (PIMS) study has analysed the impact on long-term performance of cutting budgets. PIMS shows that over the length of a recession and most significantly during a recovery, those who maintain or increase their spend see higher returns. There is a very strong link between share of voice and share of market. The trick when cutting budgets is to cut less than your competitors, thereby stealing market share from them.

Value and values

During tough times something called ‘value’ becomes even more important. Sometimes that’s the same as price but very often it isn’t. ALDI and Wal-Mart are having a good recession and low prices do help increase their footfall. Other brands survive in different ways, by emphasising their emotional values. People turn to companies and organisations they trust. Longstanding, predictable brands that assure quality can be a recession-weary customer’s best friend. During the 1990’s recession, De Beers observed that consumers were falling back on the things they felt were most important; family, friendships and love. Their famous ‘Shadows’ campaign linked De Beers with love, family and romance. Sales rose by an annual average of 8% over three years.

In a recession people change the way they buy. They take more time to research their purchase decisions. Everyone knows that people are less and less trusting of official sources of information and increasingly reliant on informed friends or even strangers online. Brands that focus their campaigns on fame and generating talkability enjoy the biggest positive profit impact in difficult times.

Social Advocacy

Msiter Three Sixty sometimes refers to these fame-building strategies as Social Advocacy. They are designed to increase the number and volume of people talking about your brand. The techniques are simple; first you need a good story, well-told. Second, make use of digital technology to allow easy sharing of that story. Finally, identify the important communities with which you need to make contact and reach out to them.

In conclusion Mister Three Sixty says that whilst the economic environment can look pretty nasty, not every category suffers. People will still need to feed their cats after all. Things will change; the latest IMF forecasts predict a return to GDP growth in most markets by 2010. In the meantime, just remember the Dodo.