Like a slow-motion train wreck, the stock market collapse the past two weeks has been surreal and unnerving.
On Friday at noon, the Dow Jones Industrial Average was down more than 350 points. On Thursday, it fell 7.3% during the final half hour of trading—a nearly 700 point drop that took the exchange to its lowest point since May 27, 2003.
While the scope of the complex, global economic meltdown far exceeds my academic training (bachelor's degrees in English and philosophy), I do have a few observations, a number of which are echoed throughout this issue of BtoB.
???Ad spending is declining globally and in the U.S. Media agency ZenithOptimedia now projects ad growth of just 0.7% in 2009, down from an earlier projection of 2.6%. (See “Ad spending will fall; how much is unclear,” page 1.)
??Financial services companies, for now uncomfortably front and center in this crisis, will eventually move beyond the current crop of “Remain calm. All is well!” full-page ads in general business publications. The ones that remain standing will enter an extremely difficult and interesting period.
How the merged survivors brand themselves and market their goods and services will be an ongoing focus of BtoB's coverage for the rest of this year and next. (See “Financial ad campaigns pick up in midst of crisis,” page 1.)
??Strongly capitalized marketers (and media companies, for that matter) will survive this crisis, although the currently frozen credit markets are already affecting M&A activity. What will free up credit again? Perhaps the Treasury Department will exercise its authority, under the $700 billion bailout passed by Congress, and take equity stakes in some of the nation's banks.
??While expanding less rapidly, online ad spending, such as search and e-mail marketing, is still enjoying double-digit growth. In fact, digital initiatives may see accelerated investment as marketers gravitate to this most-trackable medium. (See “Online advertising during the downturn,” page 16.)
???Experimental mediums—helped or hurt? For instance, some observers believe social media marketing will be helped by the economic distress, as marketers scramble for new and low-cost-of-entry channels. Others say the opposite and argue that risk-averse companies will pull back from experimental approaches to concentrate on tactics with agreed-upon metrics and proven results.
??A flight to quality. Brand leading marketers and media companies—provided they aren't overextended financially—may see an uptick in business as competitors topple; they will certainly come out ahead when the dust settles.
??One last point. It's certain that marketing will see reductions in budgets and staffing commensurate with cutbacks in other corporate departments. But it will not, this time around, be that first-to-cut expense. This is a testament to the profession, which has spent the last decade reinventing itself around metrics and the financial disciplines of ROI. This time, marketers and their C-suite colleagues will make informed decisions about what to scale back or cut because they will have the data to make these important business decisions.
Ellis Booker is editor of BtoB and BtoB's Media Business. He can be reached at firstname.lastname@example.org.