For the first time since the first dot-com boom, I've been glued to Yahoo Finance. Only this time, instead of watching TFSM, DCLK and CMGI rise and fall with each new press release, I'm watching the Dow and a wide variety of companies that until recently were considered safe long-term investments.
Among friends and colleagues, the betting is running about 50/50 with respect to whether the counter-rally early in the week was the beginning of a recovery or the dreaded "dead cat bounce." Based on what I've seen this morning, my money's on the dead cat.
Whenever things like this happen, the advertising and marketing industry shifts into a lower gear and introspectively asks how it can weather the storm. And with good reason -- marketing and advertising programs are frequently featured on the chopping block whenever economic uncertainty rears its ugly head.
It's an interesting time for the digital marketing business. It's interesting because we're in a no-man's land halfway between where we were after the last recession and where we want to be. It's a tough spot to be in because if we're preparing for a serious economic decline, the fate of any digital marketing program we've conceptualized and executed is questionable.
If there's anything we can agree on now, it's that marketers will be yanking some levers in response to the economic decline. Which levers get yanked and how far is largely up to the marketer, but open to input from trusted marketing partners. Anticipating that decisions will soon be made, we need to prepare ourselves for the tough questions.
Digital is often at a disadvantage when it comes to across-the-board marketing cuts. Why? Because most marketing people understand the strategic roles for most other communications vehicles, as well as the consequences of cutting their budgets. A brand manager will have a reasonably complete picture of what will happen, for instance, if they were to cut an FSI from 4th Quarter, or if they need to scale back TV GRPs by X percent in the last few weeks of the year. Brand managers don't always understand the consequences of cutting digital programs, so it puts digital at a disadvantage when marketers are looking for places to turn back budget dollars.
This is where quantitative analysis would come in handy. I know I'm likely to get some pushback on this. After all, isn't it the quants who got us into this whole mess in the financial sector? Isn't it through narrow-mindedly focusing on the quantitative aspects of digital that we lose sight of the larger picture?
Friends, that's a battle that's best fought in more certain economic times. Right now, if there's a decision to be made about what stays and what goes, you had best believe that some Excel spreadsheets are going to be involved.
Yesterday, many of you saw an InFocus piece I wrote about digital display ads and what we really need to do as an industry in order to open the floodgates for display. Some of the advice in that article is particularly relevant to this discussion, particularly the bits about measurement.
Put simply, brand managers and VPs of marketing need to understand the consequences of cutting digital programs. For a digital display campaign, that might mean talking about the media weight that the advertiser would miss out on. It might also mean expressing that missed opportunity in terms of unique reach -- the people that other vehicles won't reach because they consume non-digital media lightly.
For a couponing campaign, you might want to build a dollar in, dollar out model showing how the stimulation of trial is critical to picking up market share against competitors. A CRM campaign analysis might show how not deploying those next three emails would decrease consumption among your loyalist segments.
In short, the key is to get a brand manager to understand what they don't get if they cut digital. They pretty much know what they don't get if they cut TV, magazines or FSIs. Don't get stuck being the one medium about which the advertiser is uncertain.
Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.
