Editorial: Stay firm in face of recession

Christmas festivities are being dampened by a raft of headlines screaming of credit crunches, recession and yet more advertising restrictions.

According to economists, the tough conditions will stifle adspend next year, and evidence from Thomson Intermedia suggests that financial companies have already tightened their belts, pulling £15m in adspend this year (Marketing, 5 December). Despite what some forecasters are saying, the next sets of figures, when they are released, are likely to show more of the same.

While it is unclear which sectors are likely to suffer the most, we do know that in times of recession brands do one of two things: slash their marketing budgets to try to make the numbers add up, or increase them to head off a decline in sales. The latter is always the better option.

It is obvious why financial institutions have reduced spend on the loan market in the wake of the current credit crunch, but this will not be a necessary measure for other industries.

However, as such a small percentage of marketing directors are also board members, it can be a challenge to make marketing concerns heard during economic downturns. When it is the bottom line that counts, marketing budgets are an easy target, and there will be many marketers facing the tricky task of convincing others why they must retain or increase spend.

As you focus on your 2008 budgets, the fact remains that marketing is about what you promise a consumer about your brand, and if the level of brand messages decreases, then sales are likely to go the same way. History has shown that those that retain their marketing presence during recession are repaid in kind when they emerge stronger than their competitors.

Customers do not go away during a recession, and in allowing marketing activity to suffer, you could be leaving the door open to rivals to build a relationship with them instead.

Recessions may not be easy, but the small nugget of cheer is that it may just be cheaper to advertise, which means that you should be able to cut costs with a reduction in media spend.

Drinks ad ban is not clear-cut

As we are raising a glass of festive cheer, we should spare a thought for drinks firms. As part of the government's increasing effort to curb advertising of less healthy products, particularly to children, the secretary of state for children, Ed Balls, has hinted he is sympathetic to a 9pm watershed on all alcohol ads. He says he wants to protect youngsters from the 'commercialisation' of childhood and points to research by Alcohol Concern that alcohol ads before 9pm do target children by having a presence around earlier shows they are likely to be watching.

This is a thorny issue, and one around which Balls and the rest of government must tread carefully, as several drinks firms say they have already made great strides in their efforts to stop children being targeted by their brands.

If the government does introduce such a blanket ban, it could run the risk of brands and retailers turning to price promotions to shift stock - fuelling the argument that this could be the real reason behind children laying their hands on alcohol more easily than ever.

As the year draws to a close, there is no doubt that 2008 will be a particularly challenging period for the industry.

- Bad news for budgets? page 16.

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