Recession Over, Or Are We Just Sick of Hearing About It?

Unemployment flirting with 10 percent, but Dow eclipses 10K, Google ads and Goldman bonuses flying high and ABC show about horny ‘cougars’ rejects big ad buy about same topic.

As we alluded to in our last rant here, most people’s outlook on the state of the U.S. economy depends on whether or not you’re working. With interest rates historically low, deals galore on the retail and housing fronts and the financial markets up over 20 percent this year, you’ve got pretty good buying power if you’re lucky enough to have a job. If you’re out of work -- like more able-bodied Americans are than at any time in a quarter century, then things aren’t looking too rosy.

Employers are mired in a long-term hiring and capital investment freeze. More homeowners than ever are underwater on the mortgages and/or not keeping current with their payments. New companies, or new divisions of existing aren’t being formed to create new jobs. Older workers are afraid to leave the workforce due to insecurity over their retirement accounts and that’s clogging up the normal payroll succession plan as millions of energetic new college graduates can’t get a foot in the door.

The challenge for today’s marketers is to resonate with all sectors of your customer base, regardless of what life circumstances they’re encountering, and that means a one-size fits all global branding campaign may not do the trick.
So, how are global marketers responding? They’re tapping into that “less worse than last year” psychology and slowly reinvesting in their brands.
Stephanie Clifford of the NY Times had a nice take on this phenomenon the other day,

“It may be a sign that the recession is ending, or it may be a sign that consumers are sick of hearing about it,” quipped NY Times columnist, Stephanie Clifford last week. “While economists and investors study housing starts and gross domestic product predictions to measure economic vibrancy, General Electric (“The American renewal is happening right now”), Bank of America (“America. Growing stronger every day”), Levi’s (“Pioneers! O Pioneers!”) and other companies are using commercials to proclaim that America’s future is bright. And that may be something of a self-fulfilling prophecy.” Let’s hope she’s right. As Brand Union/WPP’s Robert Scalea told Clifford: “Marketing is always a reflection of societal values, and many times, for smarter marketers, it’s a driver of them.”

Google vs. Dow as bellwether of the ad economy

On Thursday, Google reported better than expected Q3 financial results – 27 percent increase in net income -- on the strength of its ad sales program. CEO, Eric Schmidt declared the worst of the recession over and that Google was embarking on a new phase of investment, hiring and acquisitions. Many analysts contend that Google’s results are closely correlated with online spending – one of the few bright spots in the advertising sector --- and are likely to be trumpeted across many sectors of the industry.

“We’re seeing double-digit increases in budgets for 2010 from our clients,” Bryan Wiener, head of digital agency 360i {www.360i.com} told The New York Times last week.

How will you read magazines in 10 years?

From Conde Nast to McGraw Hill to the Economist Group, it’s clear that the cash cow of print-based, high-ticket, hard-to-measure, brand advertising has been slaughtered. Conde shuttered four titles, including the much-admired Gourmet. Bloomberg LLP snagged Business Week for next to nothing and Economist Group’s editorially poignant, but ad-challenged CFO still can’t get a date to the buyout prom.

Is that finally it for the magazine medium? We think not. Magazines will continue to be relevant, but how we engage in them may be changed forever. Over the next decade, three in five “readers” of magazines won’t be interacting with their favorite titles in dead-tree form, according to a recent survey of nearly 400 Wall Street Journal readers. Nearly 30 percent said they’d be reading online; another 20 percent said they’d be reading via E-reader or mobile device and nearly one in 10 said they wouldn’t be reading at all.
If print media is a key component of your marketing mix, then you better take notice.
How will you read magazines in 10 years?

PRINT*********42%
ONLINE********29%
E-READER******17%
PHONE**********3%
I WON’T********9%
Source: Wall Street Journal

Said one respondent to the WSJ survey: “Unfortunately the selection for how we will read magazines in the future is too simplistic. If wise, publishers will realize that that are creating content and can deliver it in different forms, print, online, phone e-reader and not as magazines but as articles, so that if I am interested in food, I can read a gourmet article from ‘gourmet magazine’ which as a magazine of today's format need not exist.” Brother, you got that right.

Are these TV people for real?

David Letterman, the curmudgeonly late night talk show host for CBS and product Worldwide (Can’t Keep it in My) Pants, gets exposed for running a broadcast equivalent of the Wall Street Boom-Boom run in his offices and gets an instant ratings boost. Jay Leno, who was supposed to be dead in the water in prime time is far exceeding rating expectations. For a fraction of what it costs to put on a prime time drama, Leno is helping NBC rake in the profits by re-reading local newspaper headlines, quizzing airhead LA pedestrians about current events and challenging B-list celebs to simulate slow-speed car chases on a Burbank studio parking lost. And it works. So to all the cable shows about house-flipping, home makeovers and savvy real-estate investing at a time when record numbers of Americans are in foreclosure or underwater on their mortgages. Then there’s Cougar Town, ABC’s popular new Courtney Cox sitcom about spurned 40-something women prowling for 20-something studly men. More than seven million viewers are tuning in each week and apparently the has enough ad dough in the pipeline to turn down a huge proposed media buy from a Web site for real-life cougars on the grounds of decency concerns.

We’re not passing ethical judgment here. We’re just pointing out that the mood has lightened up enough in this country so that support for these shows, and the vicarious thrills they provide, may point to hopes of better times ahead.

Conclusion

As a Miami University professor noted in the aforementioned Stephanie Clifford piece: “The truth is, we want to believe they’re right. Deep down inside, even skeptics want to be hopeful” in these times.