That's right. This time we kept building it... but they didn't come.

While some financed and built excess, others did the fiscal math and remained grounded in business projections; not believing that business was magically exempt from the laws of financial reality and economic gravity. All of us, however, rode a portion of the frothy tide of an unprecedented economic expansion over the last 25 years. It was unprecedented in that it was financed by a blossoming consumerism that was financed by dwindling savings rates and burgeoning household debt – supported especially since 1995 by an unending faith in the upward movement of housing prices. Consumers were caught in a flux that saw median home prices increase by 45% in the ten years prior to 2007, while median household income increased by only 10% in the same period. To continue stoking the housing market that had become synonymous with economic progress, the relatively less affluent population (all of us, that is, because of available wages relative to available housing prices) received less rigid credit requirements and lower interest rates. While it was easier to get a mortgage, the disconnect between wages and mortgage payments made it more difficult for many to service a mortgage. Not surprising in retrospect... in 2007... pop! Future revenues for financial institutions disappeared perhaps quicker than at any time on record.

History Rhymes.

The economic downturn we are experiencing is unique in it's origin. It is not, however, unique in the current results: a sharp drop in demand for products and services that is trickling to many sectors of the economy. In other words, "History does not repeat itself," as Mark Twain is credited with saying, "but it rhymes." The impacts we feel today are remarkably similar to the last serious economic downturn – 1974-75 (reaching back further in time than the relatively temporary results of 9/11). By 1974, we had left the economic party of the mid 60s, and were reeling in an oil crisis, inflation, and unemployment – an economic trio that lead to the coining of the phrase "stagflation." In fact, in the 20th century, there were eight documented downturns (the recessions of '23, '49, '54, '58, '61, '74-'75, '89-'91 – and the Great Depression of '29-'39). And following each of these periods, at varying intervals, revenue growth returned to record-setting levels. How long the recovery takes, of course, is the question that every business person has. How robust the recovery, and when? These are the fundamental questions... and the origin of uncertainty. During each of these uncertain periods, to be sure, there was downward pressure on operating budgets – including marketing and advertising expenses. (Yes, general accounting principles categorise advertising as an "expense," rather than an asset – suggesting that advertising does not have the future of an asset).

The future value of advertising and marketing.

Strong marketers know that the only advertising worthy of expense is that which has a future value. Likewise, sound marketers and creative types know that sales increases are not attributable solely to clever advertising, but are derived from overall economic conditions, demand, company position, and product innovation. In each of the downturns of the 20th century, there were industry competitors who were diminished – or who ceased to operate. And, during those same times, there were competitors who understood that marketing and advertising activity were an investment for the future. These companies knew that advertising expense could no sooner be cut entirely than could the entire relationship with all financial institutions or other critical suppliers. If there are wholesale cuts to be made in marketing and advertising, let it be that of your competitors' budgets. "Marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake. Although it's wise to contain costs, failing to support brands or examine core customers' changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession." – (John A. Quelch and Katherine E. Jocz, Harvard Business Review, April 2009).

It is common knowledge that many popular consumer brands – the ones we still know today – experienced share gain during a recession and top-line growth within the first year after a recession by following the practices of maintaining measured amounts of marketing expense (some were bold enough to increase expenses during a recession). MarketSense studies reveal that Jif Peanut Butter, Kraft Salad Dressing, Coors Light and Bud Light (to name only a few) increased their advertising expenses during the recessionary period of '90-'91 and experienced sales growth of 57%, 70%, 15% and 16% respectively in the periods just after the recession. Most recently, Audi reported in the February issue of Advertising Age that it will increase its 2009 advertising budget by 15%, specifically to take advantage of a soft advertising spending market.

Fresh product for fresh challenges.

Just as the origins of a downturn are unique, so are the outcomes and the resulting business models. Sweeping generalizations are ill-advised when comparing one economic downturn to another. However, by observing former periods, we can be certain in the general notion that our resulting economy, markets and business models will be changed greatly by this recession. Each former recession has made some business models obsolete, while introducing opportunities for new ways to go to market. We know that a market will continue in some form. We know that the competitors with the best product, supported by the most efficient operations, and the most efficient and accountable marketing will succeed to the greatest degree. We also know that a recession chases the fat out of a market. And, in the most serious downturns, only the most shrewd and agile competitors (those who make their own luck) survive... or originate. Recall that in the midst of the despair of the 1970s, Apple and Microsoft were created – two companies that most will agree have changed the world and offered an entirely new set of economic opportunities. The ingenuity of strong entrepreneurs will shape our new realities – in each company, in each department. Each new effort need not be as classically monumental as Microsoft. Rather, every small innovation in a business approach that creates new opportunity is revolutionary in its own right. And when aligned properly by management, a number of small innovations are indeed the source of revolution. As Mark Twain suggested, history rhymes. That is, those products and marketing plans that are designed with the new economic realities in view are those that will succeed. Applying resources now with creative and measurable programs is the way to test and discover how new market models will function in the new, uncertain reality.

DBD continues to be a marketing partner in our new economic reality. Our creative efforts – as part of your marketing efforts – can enhance your revenue opportunities. We can't wait to meet the fresh advertising challenges of the new economy.

How is DBD meeting the fresh challenges of the new economy?

• Creative is still king.
• Yet, as always, creative is used as a business builder for the client – not as a portfolio builder for creatives.
• Measurable results are more important than ever.
• Measurable program designs are more available than ever.

Our enhanced services:

Internet marketing is electronic... but not all of it.

• Integrated online and offline communication programs are about more than a Website.
Not every piece of the program is electronic.
• The marketing program begins with an inspiration from a visionary client.
• The marketing program goes through analytics before it hits the art directors' and media planners' desks.
• Uses of evolving technologies are game changers for information capturing and reporting and, in some cases, production costs.
• Uses of evolving social media are game changers for spreading information in more personalized ways.

Creative is still king. (It's worth repeating)

• An analytic approach does not have to be at odds with a creative approach. The most successful programs (the only successful programs?) are those that combine creative and analytics.

Print has a function.

• Print (display or direct) rarely stands alone, but is part of the integrated process that includes Internet, other electronic media or packaging.
• Print is still the most singular media in the sense of boiling down a concept to a single message, to a specified target.
• Print can create awareness, and direct a prospect to the rest of the communication.

Packaging is frequently a print project... a challenging one.

• Because packaging is sometimes an island on the shelf, it must communicate as much of the whole story to a prospect as possible – without clutter. Packaging is the most succint challenge in communications. Though packaging may sometimes be an island, it must integrate with the brand experience offered in online or offline media campaigns.

Identity.

• Integrated communications begin with the establishment of identity. Identity begins with a brand plan. You already have a brand plan. We would be honored to learn it. Or, we can be part of the process of discovering the brand plan.

Talk to DBD today. We can't wait to hear your fresh challenges. Our efforts – as part of your marketing efforts – can help you realize the market position demanded in the new economy.