I read an Ad Week article called "Ad Biz Faces 'The New Normal'" with great interest as most of us have started the Strategic Budget Planning process for 2010. The article states that things have changed for good and basically tells the industry to expect decreases. We need to be very careful that we don't create self-fulfilling prophecies, if you plan for a budget increase in revenue, identify where and how it will come, and then execute the plan, you usually get the increase. The article does point out that we need to adapt to changes that have been made by consumers...
"The current global economic crisis has shocked consumers in ways not felt since the 1930s. For proof, executives point to numerous studies that reveal dramatic shifts in consumer behavior and outlook over the past six to nine months. Before the recession-thanks to near-limitless credit fueled largely by home-equity loans-the prevailing consumer habit was spend and spend some more. Now, thrift is in vogue, as hard choices between wants and needs dominate family dinner table discussions.
According to a July Gallup poll on the subject, 32 percent of respondents said they've been spending less in recent months. More telling, however, is that these consumers expect that curtailed spending to become their "new normal pattern for years ahead."
Another telling sign: In a study issued just over a month ago, Interpublic Group's Initiative found that 75 percent of consumers have altered their purchasing behavior over the past year. In some cases, they traded down; in others, they made wholesale lifestyle changes. "Brand loyalty has been badly shaken," says Sue Moseley, Initiative's worldwide director of research and futures, who oversaw the research and the resulting report.
That the consumer budget cuts of today are poised to become the permanent spending reductions of tomorrow is not only the prediction of researchers; many in advertising feel it, too. One of them is David Kenny, managing partner of Publicis Groupe's VivaKi and one of the holding company's top media chiefs. "People are going to emerge from the current recession forever changed," Kenny says. "The global recession has changed them. Environmental realities have changed them. New global leadership has changed them."
Yes, consumers have changed behavior. Have we changed our behavior to adapt? Are we giving our clients fresh ideas and strategy to market to the "New Normal"? My advice to you is develop a Strategic Plan account by account of what you want to achieve in 2010. Know where and how you will see those increases and then execute your plan. Don't led Ad Week determine your 2010 budget figures.