There is only one constant. Change.
The world at large, its people, nature, the environment and “even” the business of advertising is not insulated from it.
Change happens….sometimes for the greater good and sometimes for a humbling experience. Recent events in the financial world are forcing many of us to navigate what is amounting to a sea change…. a transformation that will affect our global economy and ultimately the fortunes of marketers, their agencies and the media channels we work with.
We are just beginning to hear. Automotive marketers will slash budgets and some will disappear entirely. GM is trading at $2.75 a share with a market cap of $1.6 billion! Banks are swallowed whole by other banks. American Express, for fear of its ability to continue in its present state has transformed itself into a holding bank.
Consumers are retreating, opting out of purchases that carry long-term liabilities. And our government will wind up spending trillions of dollars to support the very institutions that created the mess we are in today. And when those institutions cannot repay the government, guess who gets to hold the empty bag?
The Obama administration’s platform is all about change. Here are just a few of the changes that will likely affect the business of advertising during his term.
• Corporate tax deductions for advertising will be scrutinized and supported by a bill to exclude it as an expense. The Association of National Advertisers is already monitoring moves in this direction.
• As one of two countries on the planet that allow Rx advertising for new products, look towards a policy that will disallow the practice for up to 12 months, stripping billions of dollars out of the advertising pie.
• Placing the issue of privacy, personal data collection and utilization under a microscope, the effect on the ability of media channels to target ads based upon behavior will likely diminish.
• The FTC and the FCC will secure a broader power base to enforce mandates on ad guidelines and the ability for media channels to converge through consolidation.
The good news is that as the winds of change shift as well. We are part of business that is resilient and always bounces back. When tobacco advertising was legislated off the airwaves in the 80’s, panic set in for many agencies …. but they all bounced back. When the Internet bubble burst in 2000, it came back stronger. And as tough as it may sound, the best advice is to try and stay in the game.