Is the nation entering a recession? Or will we dodge a downturn next year? Who knows? But for marketers, agencies and media plotting plans for 2008, the recession question isn't entirely relevant.
We won't even know the answer till after the fact. In the four downturns since 1980, the National Bureau of Economic Research didn't officially rule we were in recession until an average of seven months after the downturn had begun. In three of the four recessions, the economists didn't announce a start date until, as they would determine down the road, the downturn was nearly over.
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There's no denying the ad market's fragile condition. U.S. measured ad spending has been flat or down since May. Advertising and media employment has fallen every month since hitting a post-recession peak in June. Those facts bring back memories of late 2000, when ad spending and jobs peaked on the eve of the '01 recession.
And so ad forecasters belatedly have ratcheted down 2007 predictions. Universal McCann's Bob Coen estimates U.S. spending grew just 0.7% in '07; advertising's share of GDP -- 2.05% -- slumped to its lowest level since the recession year of 1982.
Forecasters expect modest media growth next year -- but mostly because of the every-four-years gift of an election and the Olympics. The outlook for newspapers remains lousy. The outlook for digital media remains good, though it's questionable whether there will be enough ad dollars to meet the grandiose growth projections of internet and traditional media companies chasing online money.
An '08 recession would be unusual in one respect: Since 1950, just two of nine recessions have occurred in presidential-election years. Six of the nine began the year after an election; watch out for '09.
What to do now? Stop worrying about recession and focus on opportunities. Media companies need to think outside the box. Marketers need to spend money where it counts, investing in whatever media and non-media initiatives move the needle.
If you've got something good to sell, go for it. Consider the great brands born in recession years: FedEx (1973); People (1974), the largest magazine in revenue; Vanguard Group (1975), the No. 2 mutual-fund company; CNN (1980); USA Today (1982); iPod (2001).
In good times and bad, innovators win.