Field Notes Inside an Integrated Communications Agency

During the Great Depression, the majority of Americans were forced to tighten their belts to a degree hard to imagine today. With millions of people deeply worried about getting “three hots and a cot,” survival was in – and luxuries were out.

Yet millions of Americans somehow found a way to scrape up the then-princely sum of 28 cents for one luxury nearly everyone refused to give up: a movie ticket. The hard-pressed, hardscrabble times created an unquenchable thirst for spectacular fantasies of high society and easy living that few people would ever experience. No matter how threadbare your existence, for about a quarter you could spend hours basking in the suave, debonair world of Cary Grant and Katherine Hepburn. Marketers latched onto this trend, and found ways to reach consumers’ wallets even in the toughest times.

For example, with the help of product placement, cigarette consumption per capita shot up two and a half times between 1930 and 1940. Many reports stated that tobacco manufacturing was one of the most stable industries during the Depression.

Fast-forward to 2008 and a financial collapse so deep and vast that comparisons to the Depression are inevitable. Plunging stock prices and rising tides of pink slips certainly provide plenty of bad news from which Americans might want to escape. Wallets are shut tight to frivolous items, and consumers begin to ignore shiny ads and marketing tactics. But marketers still need to reach their customers. Brand loyalty is challenged more than ever and consumers still want to be engaged and interact with everyone and everything around them. This time around though, movies have serious competition when in comes to helping consumers escape the daily doom and gloom. You can bet where there’s escapism there’ll be magic for advertisers.

Video games just may be the bright spot advertisers need. Like Depression-era movies, they transport people worlds away from real problems. You may briefly forget about your finances while fending off hordes of evil undead threatening to eat your brain. Sweating the future seems unnecessary if you can escape for a few hours as a heavy metal axman rocking a packed arena.

Product placement worked in movies (reports show a 59% retention rate), but when Mario and Luigi jump Pizza Hut pizzas for points will consumers open their wallets? If the product’s audience is the highly sought after 18-34 male then advertisers are practically giddy with possibilities. This enthusiasm for creating new dynamic advertisements has prompted growth for the in-game advertising industry.  According video game network leader Massive Incorporated, ad revenue will grow from $56 million in 2005 to as much as $1.8 billion in 2010. No doubt this deal will become sweeter as advertisers continue allowing game designers to push experimentation with more innovative game-play. This promising new cost offset also helps increase profits for publishers by an extra 20% per game.

These are odd economic times but I think marketers are taking the right steps for future progress. The gaming industry is going to deliver us all a sweet escape from our humdrum lives. That’s inevitable, just as movies have done in the past. This recession is just a bonus level for the gaming industry.

An economic stimulus only stimulates if injected directly back into the stream of free market capitalism. If you've not yet received your stimulus check from Uncle Sam - or if you have received but have not yet paid down your credit card balance with your stimulus check - hold the phone! Kroger wants to cut you a deal.

When news of the proposed economic stimulus package first broke some months ago, every armchair economist in the country fumbled over themselves in a rush to condemn or commend. There seemed to be very little middle ground. On paper, the idea of injecting cash back into the pockets of consumers seemed promising; central to nearly every point of criticism was the notion that things just do not behave the same in action as on paper. Debt-burdened, cash-strapped consumers, said the naysayers, would hoard this extra cash as an emergency buffer, or use it to pay down high-interest debt. In true capitalist fashion, some retailers are coming to the government's rescue, if only through their own self-service.

Kroger, my local grocery store, is now offering a gift card bonus program. Beginning May 2, significant cash incentives are being rewarded to customers who choose to turn their tax refunds or economic stimulus checks directly into Kroger gift cards. Other necessity-based retailers are tending to follow Kroger's lead, while more discretionary retailers - restaurants, apparel, etc. - are clinging to hopes that a consumer and his money are soon parted.

Why is this great?

Well, it gives the stimulus plan a shot at not being a complete failure. I can practically hear the whooshing sound of my sweet grandmother rushing to Kroger, check in hand, to convert to gift cards for my sister in order to help her feed my niece and nephew.

Is this doomed to fail?

Well, maybe not. But for discretionary retailers holding their breath for better business in the form of extra cash in consumers' pockets, they should prepare their contingencies. The fact is, the price of a gallon of gas has risen by nearly a dollar since the inception of the economic stimulus plan a few short months ago. This has created inflation-busting food and retail prices across the country. Most middle class consumers, by the time they receive their stimulus checks, will have already fed and fueled their financial holes deeper than any stimulus could ever begin to fill back in. The money is spent, and then some.

Forbes recently released its top-ten list of U.S. cities best protected against the current economic downturn; Raleigh and Charlotte both made the cut.

To create the list, Forbes pulled the 50 largest metro areas of the country and ranked them, according to a set of criteria. 

Some of the criteria:

• net job losses or gains, as gleaned from data provided by the US Bureau of Labor Statistics

• job growth in non-farm payrolls (construction, education and health services, financial activities, information, leisure and hospitality, manufacturing, natural resources and mining, professional and business services, trade, transportation and utilities)

• annual gains in median home prices, as gleaned from data provided by the National Association of Realtors

Final rankings were adjusted by:

"using data from a November 2007 report, "U.S. Metro Economies: The Mortgage Crisis," by the U.S. Conference of Mayors. It lists each city's estimated gross metropolitan product growth by projecting how rising foreclosures and falling home prices would affect overall levels of productivity in local economies." 

To recap: this is fantastic news. Kudos to our friends/clients over at NCEDA and WCED. Read the original article.