I think it's fair to say that 2009 will be a touch year. While the credit crises will shake itself out by the end of the year, the bigger issue is inflation driven primarily by oil and commodity price increases. As the US Fed reigns in inflation, interest rates will rise modestly. So 2009 will be a soft market for marketers particularly in the mature markets of the US and Western Europe.
Ad Age reported that some advertisers are readying themselves for the age of austerity
P&G, GM, Coke, Nissan and A-B Look to Tighten Their Belts
BATAVIA, Ohio (AdAge.com) -- Amid roiling financial markets, a who's who of blue-chip marketers are making moves to slash marketing spending, or at least apply tougher financial discipline to what they do spend. Among them are five major companies that together contribute more than $10 billion to the U.S. ad economy: General Motors Corp., Procter & Gamble Co., Anheuser-Busch, Coca-Cola Co. and Nissan.
It’s obviously going to be a hard couple of years in terms of budgets. On the other hand I think this economy is a perfect time for smarter marketers and for companies like StrawberryFrog, who specialize in building challenger brands.
The key for a client is not to confuse less money with the need for conservatism. What studying challengers, brands with modest budgets tell us, is that in fact this is a time for creativity and innovation. We developed and honed StrawberryFrog's competitive edge - Cultural Movements - working with the world's most iconic challenger brands such as Heineken, Pepsico or the smart car.
Adam Morgan says: "What is important to realize is that in a downturn EVERYONE and EVERY BRAND is going to be a challenger. So how do you outperform and out smart when all have their budgets cut and are readying themselves for the age of austerity?"
Good question to ask.
In the Ad Age piece they talk about companies like GM and Nissa. However these companies are in different mode than say P&G or brands that are clearly benefiting from innovations in NPD and in marketing. GM and Nissan have an altogether different problem - there is overcapacity in their businesses. For smarter markets, the right answer is stay the course and not slash spending. The street will understand. Companies deciding to stay the course will be rewarded.
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