Credit crunch

It’s a scary world out there at the moment.

The impact on the rest of the UK economy of HBOS turning into the minority partner in the Lloyds Halifax megabank is yet to be felt, but there’s no shortage of doom-mongers around… and this is not the time or place to argue with them too vociferously. I do, however, remain guardedly optimistic that we’re not seeing the meltdown that the papers seem to be helping us talk ourselves into. But the alternative remains a fairly daunting one: a ‘bath-shaped’ recession (or at least downturn) that could last a while… the big question seems to be ‘how deep?’.

What impact does that have on the marketing industry?

Rainy days

In the last comparable recession, back in the early 1990s there was talk of ‘the end of western civilisation’. It was pretty torrid, but we survived. What was interesting, from a marketing perspective, was the surge in the use of direct marketing techniques/expenditure. The downturn then raised the perception of the Direct Marketing discipline – and with it budgets – to the level where, from being a small part of marketing expenditure, it has reached equal footing with the flashier, arguably sexier world of above the line marketing… i.e. advertising. I found an amusing recollection of that period over at adliterate, where the author recalls the hubristic dreams of DM agencies back in 1990 that DM would ‘kill off’ glossy advertising.

So here we are in 2008, and all the data points to this period being critical in the development of Digital Marketing. 81% of marketers are planning to increase their digital budgets… and 82% of them at the expense of other advertising media.

So is this digital’s ‘moment’?

Digital will win out in a recession (compared to other media) because:

1. it’s fast – the results come in very quickly
2. it’s effective
3. you can measure it
4. you can optimise to what works on the fly
5. it remains comparatively inexpensive (no really!)
6. … oh, and unlike the 2001/2 marketing recession, digital is now a firmly established part of mainstream marketing… not the experimental silo it was then.

But the real winner will be engagement marketing. Yes, talking to people you already know. Building on relationships – and keeping your promise with sharpened attention to value and service. Getting people who already buy from you to recommend you to their friends… all that wonderful stuff.

OK – so I have an interest in this – my company, Silverpop, is deep in this territory, providing solutions for engagement marketing, particularly email marketing. We also published a white paper this year on marketing in a recession, which you’re welcome to download.

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