March article on how to trade media in recessions - Adnews

John F. Kennedy famously said, “In a crisis, beware the danger, but recognize the opportunities.” I suspect he wasn’t talking about a slowdown in the Australian advertising market. More to the point I am not sure the billings slump in Australia qualifies as a crisis. Our relatively flat advertising market compares favorably to Spain, Japan, Northern Europe and even New Zealand who are facing advertising reductions of up to 30% across the board.

It is inevitable however that global advertisers, particularly those headquartered in markets hit hard by the financial crisis, will cut or hold budgets in 2009. As advertising and media professionals we have a few choices. We can pretend the whole advertising slowdown is not happening and be outraged when our clients or managers cut our budgets – the classic Ostrich in the sand maneuver. Alternatively, we can call our clients every week and tell them that there is no slow down and now is the time to spend more – the Kevin Rudd maneuver.  For many clients, both tactics are useless and will damage the agency/client relationship in the long term. If auto manufacturers are having periodic stoppages, and retailers are laying off staff, they have a moral imperative to be more efficient with their advertising and media spend. The question is, what opportunities can we seize in the current market to deliver the same or more impact more efficiently. Here are a few suggestions:

1.       Stay close to media owners.

Media owners are currently under more pressure than most clients. Not only will they understand your need to be more efficient, the best media executives will offer significant incentives for an open and constructive conversation where both parties can see an upside.

 

2.       Consider pre-paying media

Deep discounts are possible where advertisers help media owners manage their cash flow and monthly targets. Partial or full pre-payment reduces the risk for media sales teams, and also gives them flexibility with revenue and budget reporting.

 

3.       Be where your customers are

If your advertising plans and execution have been the same for 3 years or more, the chances are that your customer base has shifted and your media spend is inefficient.  Now may be the time look at a deeper involvement with digital media, subscription TV or mobile. The only caveat is that entering these media should be more cost efficient (on a cost per exposure or impact basis) than your current media plans. This will vary from client to client.

 

4.       Ensure your traditional marketing activity and your search marketing activity are planned and measured together

This remains the single biggest sales conversion opportunity in Australian advertising today. Search agencies such as iProspect and Outrider have specialist tools that allow you to track the impact traditional media has on search engine behaviour. This impact can be refined to generate significant increases in product research and purchase.

 

5.       Demand better reporting and more detailed accountability

Every media spend can be more efficient, better targeted, deliver greater impact or extract better value. Media agencies would agree that clients who continually ask these questions are our most challenging clients. They are also our favourite and most loyal clients. An engaged client attracts an engaged media or advertising agency.