Leo and other politicians are avoiding the `R’ word, and it’s totally understandable why. The nation hasn’t had a chance to catch its collective breath from the constant pivots, anxiety and loss of the past two years, so it would hardly seem fair to bandy about such an emotionally triggering hot potato as the word “recession”.
Besides, economics’ answer to the Punxsutawney groundhog — GDP — predicts slow growth but no signs of a ‘long winter’, even with the recent adjustments by the European Commission.
But as whispers rise from central banks across the globe, marketing’s very sad answer to Carrie Bradshaw can’t help but wonder, “Are we really doing ourselves any favours by ignoring people’s daily reality, in favour of waiting around for economists to officially call ‘recession’?” It certainly seems that way, looking at marketing activities.
Inside Marketing is a series brought to you by dentsu and Irish Times Media Solutions, exploring the issues and opportunities facing the world of media and marketing. For more information, visit irishtimes.com/inside marketing
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From the outside at least, it seems that many marketing departments are behaving like it’s business as usual, post lockdown, dusting off 2019 products, propositions and plans with a collectively grateful sigh that the whole nasty business is behind us and (after a consoling catchup pint or two) we can all move on.
In fact, some seem to be eagerly awaiting vast influxes of cash over the summer, thanks to all the lovely savings half of Irish adults made in the depths of Covid — when there was not much else to throw discretionary spend at except takeaways, Netflix and stock-piling loo roll. Unfortunately this “great reset”, when the masses return from their forced love affair with Amazon, low-key socialising and binge streaming to throw their money at hungry businesses, is yet to materialise.
So when do we start calling a “blip” just plain old “reality”?
This ostrich effect in marketing makes perfect sense after facing all the pivots and obstacles of the last two years. It also makes sense because, as marketers, we are armed with no guide for this late-capitalist “new normal” we find ourselves in, no road map for the foggy future ahead and, of course, a particularly bitter aftertaste from the last recession. Unfortunately, though, we really have to think about what’s next. It’s our job.
We may not want to say “recession”, and we may never see a textbook definition of a recession, but the uncomfortable truth of it is that people’s pockets are being hit, hard. As Douglas Adams put it: “If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family Anatidae on our hands,” and should respond accordingly. This adage is often — understandably — disputed, but in our line of work, at least, it is 100 per cent correct.
Why? Because in the world of marketing, perception is reality.
It doesn’t matter whether you’re a startup, a local SME or a multinational — it’s a core truth that’s as old as the job itself, long before fake news, influencers or metaverses made that obvious to everyone else who’s not in the game. If you don’t believe in this fundamental about the power of perception, then all you’re left with, as a marketer, is an existential career crisis.
So if we agree that perception is reality, then it really doesn’t matter if a zoologist comes along and confirms there’s a recessionary duck or a whole pond of ecstatically quacking ducks! It should only matter to us that people think, experience and feel that way. And, based on current research, there is a whole raft of ducks waddling around.
PTSB’s latest research in partnership with Kantar shows that concerns about the cost of living have exploded in the past three months (81 per cent) and that 85 per cent of us expect things to get worse before they get better. KBC’s research reflects a similar story, with consumer confidence in May dropping again for the fourth month, to 55.2 per cent. The last three times this has happened, their chief economist has noted, was that chaotic Brexit summer, the “crystallisation” of the recession in 2010, the collapse of the banks in 2008 and, finally, the dotcom bubble. Not a good sign, and not without good reason either.
As the job market slows, costs of doing business continue to rise and the war in Ukraine rages on, research shows that people are not only extremely apprehensive about what’s ahead but are also struggling in the here and now.
Returning to PTSB’s research, we see that a significant majority (61 per cent) say they are barely keeping their heads above water financially and 53 per cent feel as if finances are controlling their whole lives. These findings are supported by multiple other sources, such as our own pulse survey at Dentsu, which recently found that one in two are finding it difficult to afford monthly outgoings and more than nine in 10 have noticed the cost increases.
Denstu’s research also found that 84 per cent are closely examining their bills, versus 52 per cent in 2020, and 59 per cent are planning to make switches in their providers. This marries with what PTSB and Kantar found, with a whopping majority planning to switching to grocery discounters (69 per cent) and own brand (66 per cent) in the future.
If that doesn’t give any marketer recession flashbacks, I don’t know what will.
So, from what we know so far, people are certainly experiencing “recession-like symptoms”. But we still know very little about how they are feeling when you bundle all that in with how much people’s opinions, behaviours and feelings must have changed thanks to the seismic shifts in our personal and collective realities. This is more than a “money” problem — it’s a human one. I believe that a lot of brands, agencies and businesses are experiencing a major disconnect between marketing, media, politics and the human experience.
Of course, marketers are people too — we’ve all experienced big changes ourselves, but marketing as an industry runs a risk of being tone deaf to the reality of the majority, due to our own lack of diversity in background, culture and class. Obviously, we need to continue to address this, but in the short term we also need to roll up the sleeves and invest in some proper qualitative research. There’s no trusted road map for what’s ahead — too much has happened and is happening in a short space of time — so we have to start testing new ones.
To do this we need to first get our bearings, by getting reacquainted with our audiences.
Because if we aren’t the ones nodding when they point out the ducks, someone else will.
Rachel Ray is Dentsu’s group strategy director
