Advertising doesn't work in a recession

At least, that's the (wrong I say) conclusion we might all come to if we believe all the marketing experts that are cutting or eliminating their advertising budgets in these hard times. 

Yet right now is the very time to increase your spending, not cut it back.  Share of voice - your percentage of the total advertising spent in your category will naturally go up if you continue to spend while your competitors cut back.  That means your ad dollars automatically increase in effectiveness. Consumers will see and hear about your brand more often at exactly the right moment.  For it is in troubled times that consumers are more likely to forget brand loyalty in favor of trying something different.

The trick is to make sure that your advertising promises relevant benefits and works closely with your PR and promotion messages to offer reasons for trying you now.

History shows time and again that advertisers who choose to spend their way through a recession come out faster and stronger than the competitors that cut spending. 

What are you doing in this recession?

Frix-ated on Bailouts

Is it just me, or has everyone fallen for the concept that large corporations automatically deserve bailouts?  Let's see: the argument is that we need to bailout the big three automakers because they are too big too fail. Too many jobs will be lost. So the auto execs fly to Washington on three of their private jets. No plans in-hand for how they propose to rescue their companies.  They're asked to come back this week - driving, mind you and present plans.  They show up asking for 150% of their original bailout - now $39 billion.  And their plan? Cut 30,000 jobs (not theirs of course). Eliminate 1200 dealerships (how many more employees lose their jobs with that?) and they still offer no real plan for attracting consumers to buy their cars.  Do they really deserve a bailout?

Meantime, more than 1.2 million people have lost their jobs this year. No bailout was considered for them. And what about all those people - 700,000 and counting - that have lost their homes to foreclosure? The government bailed out the lenders with $750 billion intended to fund new loans.  What did taxpayers really get? Banks used the money to buy up other banks, not provide loans. GMAC and AMEX saw an opportunity and converted themselves to banks so they could get some of that largesse.  And the people that need to borrow money?  Still waiting for credit lending to loosen up.

Congress needs to stop being Frix-ated on bailouts. Instead, let's look for ways to reward companies that are best serving the needs of consumers.  I think they should give consumers $5000 as a new car purchase incentive. Let them decide which car they want to buy. That money will float UP through the system: the consumer gets a new car, the bank makes a new loan; the dealer depletes his stagnant inventory, and the manufacturer sees $5000 and lots of jobs are saved.  One car at a time, but  I guarantee you thousands of unsold cars will be sold. And everyone wins.

Same thing with home sales. Use the bailout money to guarantee a new home buyer's loan. Give the homeowner a one time tax rebate equal to 5% of the home's value if they buy a home within the next 120 days. Think homes will sell? Think banks will make the loan? You bet.

If you agree, write your congressional representatives and tell them to read this blog.