Some optimists may believe we've hit bottom if they were watching the stock market and Federal Reserve
last week. Alas, that's a minority opinion. In this case, we think the majority is right. It ain't over till it's over.
The smart money is exercising caution: There's good reason for marketers to be analyzing budgets and spending carefully. And there's good reason that marketers, media and agencies have cut some jobs. This is no time to be on the "Andrea Gail," blithely sailing into a storm.
That's not to say this will be the "perfect storm." It's hard to look at the inherent strength in the economy and predict the great recession. True, we haven't met the textbook definition of a recession. But it's still a good time to get business expenses in line with lowered expectations to preserve and protect assets till the waters calm.
We looked at Ad Age headlines during the last recession in 1991. Those were tough times, and companies that battened down the hatches then still look prudent-even though we now know of the boom that followed those harder days. What a feeling of deja vu in the '91 headlines, in the order they appeared: "Upfront sales fall 19%"; "No recovery in sight"; "Recession's bleak legacy"; "Five agencies cut staff"; "Profits take a dive"; "TV spending falters"; "Bad news for dailies"; "The party's over." But finally, "Ad spending plans offer spark of hope." That was correct: U.S. ad spending resumed growth in 1992 and (except for a mid-'97 blip) increased every month till a small December dip and the big January crunch.
This year's job-and-spending cuts are real. It makes sense to take the middle ground-being prudent about the possibility of continued slower times, about the opportunities in a slower market and about the imperative to use this time to reset the organization.
Ad Age's Jan. 1 headline again was "The party's over." Actually, ad spending's back to where it was in 1999. So you can party like it's 1999. Just don't overdo it.