Tips For Navigating Advertising With The Economic News

Some advertising tips from Steve McKee of Business Week:

Don't Panic

The problem with panic is that it leads to bad decisions. While everybody else is selling, Warren Buffett, the second-richest man in the world (and soon to be the first), is buying. The reason? He always keeps his head. He understands the economic cycle. He knows that while things have gotten way out of whack, the laws of economics have not been repealed, and there are still real companies creating real value out there. While nobody can see a clear way out of these economic straits, acting out of fear will likely make things worse. That's as true of advertising as it is of investing.

Advertising panics usually take one of three forms. The first is cutting back the budget—sometimes to zero. Smart companies are careful about how and where they cut back, so they don't sacrifice the future on the altar of the present (see "Five Don'ts for Marketing in Tough Times" (BusinessWeek.com, 7/11/08). The second is giving away the store, which is almost always a mistake (see "Low Prices Are Not Always Your Friend" (BusinessWeek.com, 4/14/08). The third? Following the politicians down the poisonous path, trying to build yourself up by taking your competition down.

We're already seeing an increase in competitive advertising. Just this weekend I witnessed Burger King (BK) go after McDonald's (MCD), Prestone take aim at its smaller competitors, and Microsoft (MSFT) fight back against Apple (AAPL). The good news is that so far, these companies have resisted the urge to get nasty.

It's Eerie With No Ads

Think about the power of advertising. In the days following September 11, the networks temporarily suspended all commercials, and advertisers only slowly made their way back into the market. Watching television during that time was, in a word, eerie. We may not realize it, but the endless drumbeat of ads that are normally in the background helps assure us that the world of commerce is buzzing along as it should.

A similar phenomenon may happen in the days and weeks to come. Advertising won't stop as it did after 9/11, of course, but its tone could become noticeably more strident. If so, it will send a subtle signal that something isn't right. And will fuel consumers' continuing unease.

If you're considering targeting your competitors or changing your tone, stop and think about it. Consider other ways of accomplishing your goals, including using humor, a terrific way to dispel fear. Be as optimistic as you can. Above all, make sure you're not reacting out of panic.

As an advertiser, you can contribute to the fear or you can help diffuse it. The more consumers perceive you going about your normal course of business, the more normal things will feel to them. And the more quickly we can all get back to normal.

Read the full article here.