Can Marketing Adapt to a Depressing Economy?

Income inequality is increasing in the U.S. Lower and middle class incomes have declined for the last 30 years, falling as much as 15% since 2007. At least that’s what I’m seeing more and more in the news these days. In the mean time, wealthy people continue to get wealthier. If people are even talking about this issue, it’s mostly in political discussions. However, this skewing could have major implications for the advertising industry.

The latter half of the 20^th century was the golden age of advertising. We’re seeing proof of that in the wild success of the AMC show “Mad Men.” It was a time of growing economic equality and the burgeoning of an American middle class whose wages rose alongside its social ambitions. When you connect that with the growth of sophisticated communications, such as broadcast TV, marketers had a field day promoting all sorts of things. 

It was a time where you could create a commercial and, if it were successful, you’d create the real product to sell.

That world is disappearing faster than we imagine. For those of us in the marketing industry, we’re looking at a world where a very small group of people can afford almost anything, while a burgeoning group of people can barely afford the necessities. It raises a number of practical and even moral questions (don’t run away ad people, you can deal with it!).

The people in the poorer middle and bottom are going to be more and more price and deal driven. They’re not going to have the disposable incomes for luxury or high-end goods, and they’re going to have to buy fewer things, not more things. Recent reports show people fleeing from cable and satellite TV subscriptions, with providers losing almost 600,000 customers in the second quarter of 2011.

People at the top of the income heap do have money to spend but, from a marketing standpoint, they are fewer and fewer. Marketing to them will have to be more pinpointed and exclusionary.

Which raises a question for brands: If part of branding is to create desire and inspire people to aspire (think cars, fashion), is it right to market this way to people who have less and less money to spend? Or maybe we don’t really care (brands really don’t, they just want to sell).

For those non-luxury brands how do you justify marketing in the face of decreasing demand and return? People with less money will want deals, not brand.

This is where social marketing might bridge the gap. As long as people are online that is. Although if they can afford their Internet connection, smart consumers might band together to share Internet subscriptions with their neighbors through WiFi groups. 

People will look for free content and entertainment. They’ll look for targeted offers and deals. They’ll look for recommendations from other penny-pinchers. They’ll want group buying power to lower prices even further. They’ll want advice on how to feel and live well even as their incomes decrease. They’ll want ways to stay healthy, even if they can’t afford organic food and expensive gym memberships.

Social channels offer ways for brands to do this. It’s not as sexy as advertising. It assumes much longer buying cycle. But it might be the only way to build brand loyalty in an era of decreasing disposable income.

It will mean that we marketers will have to lower our sights as well, to less expensive, less flashy and more meaningful storytelling and communications. It will mean that we’ll have to get our hands dirty and help our clients understand the struggling middle and lower classes, instead of the jet setters we’d rather hang out with.

Or maybe nothing will change. Except that more of our clients will go out of business, which means fewer marketers and advertisers.

But the times are changing, for the worse. The question is whether we’re able to tap into those insights and use them in a positive way for people, businesses and marketing.

Do you really want a strategy?

Most of the articles you read about strategy really talk about tactics. People who promote themselves as strategists end up talking mostly about tactics and platforms rather than strategy. It’s not surprising then that many business have a hard time working with or even desiring strategy.

• A strategy describes what you’re going to focus on and how you’re going to act. 
• A strategy plans a route for you to attain certain goals. It doesn’t always plan the meals and hotels along the way.
• A strategy means choice. It means choosing to do certain things and choosing not to do others.
• Because strategy is a direction, there’s lots of room for learning and iterating along the way.

Many of those descriptions make people nervous. Describing how to act involves change. Making choices means commitment and standing for something. Learning along the way might mean you uncover amazing opportunities and it might mean you accept that not everything you do, all the time, is correct.

When your social media strategy comes down to agreeing to create your social media channels and an editorial calendar, you haven’t created a strategy. You’ve created an executional plan, which is good. You have something concrete to show your boss, which could be good for your career. Who knows, it might even help your business, but don’t count on it.

For those contemplating hiring someone to help them with a strategy, consider these questions:

• Are there areas in your market that you believe are untapped reservoirs of business? Either with new prospects or existing customers.
• If you found out something new about peoples’ needs or how they used your product, could you actually use that information in new ways for your marketing or business?
• Is there anyone focused on insights within your company?
• Is it possible to change your standard operating procedures?
• Are you willing to allow consumer behavior to drive your initiatives?

It’s easy to answer a quick yes to all of these but it’s harder to really mean it. I’ve seen companies in desperate need for strategy, including those faced with sinking revenues and even lawsuits. Even when they had actionable strategies, what they ended up focusing on was a new Web site design. It was much easier to understand.

Strategy, though, is a great tool to transform your business and to use as a lens with which to measure actions and success.

I think strategy is work. If you want to change or adapt who you are, you need to look deep and commit to an ongoing process. That’s when you can use a strategy.

If you’re more comfortable buying a new dress, rather than working on your personality traits, then forget the strategy and hire designers or an ad agency. It will make your life easier, but probably not more successful.

(BTW, I love Tom Fishburne's cartoons)

Why Google+ isn’t Twitter

I’ve spent the last few weeks toying with Google+. I admit, I’m not going into it full steam, but wading in and seeing if it provides enough value to stay. One of the big things I’ve noticed is that I seem to spending an inordinate amount of time trying to group people I already know from Twitter into different circles. And maybe that’s why I’m not really feeling the love, yet.

I find myself longing instead for those early days of Twitter. It was a time to connect with new big thinkers in my industry or people who I had blog-followed for years. People who seemed remote were suddenly available for contact. I found a lot of smart people I didn’t know existed. Following and conversing with them made me better and smarter.

It was a heady time. I found as much pleasure in connecting with people around the world as I did in watching them find each other. It resulted in lots of in-person connections that developed some pretty strong interpersonal ties. I saw it happening at conferences and especially at SXSW.

There’s a chance that Google+’s threaded conversations will make it easy to discover people who I should be connected to, who will have interesting ideas and comments, but who I don’t know of yet. Hopefully that will happen. It hasn’t yet.

Right now the questions for me of this new social network boils down to: is it a place where I’m supposed to more easily connect with my existing network? If so, it’s not really that easy to move my Twitter lists and friends to Google+. Or is it a place to connect with new people? It if is, it’s not really working so well.

Ultimately, I’m looking to use social networks to keep me connected to and informed by lots of really smart people who don’t necessarily live in my immediate area. It’s not to follow big swinging +s whose comments produce an endless thread of responses.

For me, the jury on Google+ is still out.