The economic extremes that have characterised the past few decades are not always comfortable for marketers, but they are, at least, directive. They guide decisions. When the economy is tanking, you rein in risk, send signals of solidarity to hard-pressed consumers, and resist the siren calls of agencies to 'spend your way out of recession' - advice that is as self-serving as it is baseless.
When the good times return, you invest in cutting-edge innovation, push through line extensions, and make the case for meaty communications budgets. The biggest fear in the boom is that of getting left behind.
Right now, marketers are waiting for a definitive sign to tip them one way or the other. With governments and consumers weighed down by debt, bears argue that fears of a double-dip recession are only too justified. Yet corporate balance sheets are strong and some analysts remain bullish: HSBC, for example, expects to see the FTSE 100 back over 6000 by year-end.
Which way will it go? Up or down? Bust or boom? Bull or bear?
What if it is neither? What if all the turbulence on the surface masks stasis underneath? What if the good and bad omens cancel each other out, the way the most recent US employment data showed the 17,000 new private-sector jobs liquidated with exquisite cruelty by the 17,000 that were lost in the public sector?
Imagine that the economic ride we are on is not V-shaped, or W-shaped, or bath-shaped, but pancake-shaped (see 30 seconds, below). Suppose it stays that way, with just anaemic growth or sideways movement, for years to come. What is your broad strategy now?
In the flatline economy, decisions get less obvious. You can't afford to let paralysis set in while you wait for things to turn, yet it is not easy to make the case for ambitious investment.
As ever, your options will vary according to the category you are in, but here are three thought-starters to get you mulling:
- Inspire a culture of rapid incremental innovation Make small, meaningful improvements in service or product, judged from gut instinct, rather than costly research. Make them frequently, and help consumers see them as a cohesive whole, which Tesco has achieved with 'Every little helps'.
- Experiment with those hard-to-measure initiatives you've been thinking about, such as a fresh distribution channel, or a social media push. This is the right time: in a flatline economy, one of the biggest variables has calmed down, making it easier to relate sales gains or losses to the initiative, rather than wondering whether it was the boom or bust momentum that made the difference.
- Focus on new global markets This is already the strategy at big players like Unilever and Diageo, but it is interesting to see mid-sized businesses such as AllSaints and Wagamama expanding into developing world markets long before reaching saturation in the UK.
Global ambition is the one that's going to make the biggest difference, if you can live with the risk. The upside is obvious enough: growth that has 'slowed' in the BRICs economies to the dizzying heights of 8%-10%. The US and Europe may have plateaued, but that does not mean the world is flat.
Helen Edwards, PPA Columnist of the Year (Business Media), has a PhD in marketing and an MBA from London Business School and is a partner at Passionbrand, where she works with some of the world's biggest advertisers
30 SECONDS ON ... Recession recovery shapes
- Bathtub Famously coined by Sir Martin Sorrell in 2001 during the tech bubble, it is described as having 'a steep drop at the tap-end and then a long and steady incline upwards, amounting to a creeping recovery'.
- L-shape Sometimes called 'the hockey stick', it's a steep plunge leading to a long, flat period before fresh growth kicks in. Japan in the 90s and the Great Depression of the 30s are examples.
- V-shape A short recession with a very strong rebound. Considered the best-case scenario, this pattern was seen in the UK in the early 90s.
- U-shape Between a V and an L, signifying a feeble, slippery recovery.
- W-shape Also known as a 'double-dip', and 'roller-coaster' recession. The economy returns to growth for a short period before a downturn and eventual recovery. The twin recessions of the 80s provide an example.
- Saxophone This situation involves GDP going up, falling sharply and rising again, before finally levelling off.
- Inverted square root Coined by investor George Soros. 'You hit bottom and you automatically rebound some, then you settle down - or step down,' he said.
- L-U-V A way to describe a complex global picture: L-shaped in Western Europe, U-shaped in the US and V-shaped in emerging markets.