Are you ready for the long haul?

You'd be forgiven for thinking the world was coming to its final days, the apocalypse, considering all the doom and gloom that exists today. Everyday we are constantly bombarded by the news of another round of sackings, another currency crash, another fall of stocks or plummet in consumer confidence, sales and ad budgets.

But despite all the bad economic news, the world goes on and people and companies continue to survive. The world has survived recessions before, in fact since the end of World War II the US alone has endured 10 recessions. Since 1960 there have been 112 recessions in the 21 Organization for Economic Co-operation and Development (OECD) countries.

Many great brands have actually being born during the darkest economic times.

GE was founded in the 1870s, Disney in 1923-24 and Microsoft emerged in New Mexico in 1975. Even Apple's revolutionary iPod was founded during the American recession of 2001.

The lesson here is that despite the toughest of times, and we are certainly in one now, some companies can not only ride out the downturn, they can grow and flourish.

And the advice from powerbrokers across Asia's marketing and advertising industries, is for brands not to make knee-jerk decisions but to have a plan, be smart, sensible and make calculated decisions with your marketing dollars.

Stephen Mangham, group chairman of Ogilvy & Mather Singapore, believes the most important priority for marketers is to "protect their brand".

"It's an asset. You need to continue to invest in it," he says.

Mangham says research his company has conducted shows that gains and losses in recessions tend to endure, and if marketers need to cut their ad budgets, cuts should be targeted changes not wild ones.

"A recession is a chance to motor ahead or lag behind," he says. "It's an opportunity to get share. The companies which increase their advertising spend during recessions suffer, as well as they who cut their budgets. But they come of with it with stronger share."

It's a view that many powerful individuals on both the advertising and marketing sides share. Most also believe that it is crucial during the global downturn that brands do not get involved in price wars.

Cheuk Chiang, CEO of PHD in Asia Pacific, says the key thing is to focus "on benefits not price", as companies must remain relevant and differentiated from their rivals.

"The key thing is to focus on the consumer, who is looking for value above all else," he says. "Being consumer-centric, not company or product-centric in their marketing. [Brands must] hone in on their beliefs, they can't continue to focus on price."

Jean-Paul Burge, CEO of BBDO Singapore, agrees and says slashing prices is "probably the worst thing they can be doing at this time".

"It encourages the consumer to down-trade, or wait until the next sale; and it portrays the brand as being distressed," he says. "If everyone slashes price it just pushes the whole category down. Following this brand owners need to define they stance and stick to it. Then they must start to truly leverage the power of their brand. When purchasing decisions become harder, consumers cling even more to trusted brands with proven quality and performance. If their brand equity is strong, they need exploit it to grow market share via new products, dominant share of voice, aggressive merchandising; if their brand is relatively weak, they need to find a way to outflank others through a relevant strategy tailored specifically for the downturn. The middle, undifferentiated ground suffers most during a downturn."

A well of positivity exists across Asia that this region is better equipped to handle the recession than any other area, particularly the US and Europe. Whether it's because of the strong growth that Asia has experienced in recent years, or the fact they it has recovered from localized crises in the past decade like SARS and the 1997 financial crisis. Optimism exists that Asia will both not be the hardest hit by the downturn and will recover quickest.

Ricky Ow, senior vice president and general manager of SPE Networks Asia, is a veteran of both those periods and launched the company's AXN channel amidst the drama of 1997.

"It was both the best and worst time," he says. "We were able to do things we couldn't do in good times. People are more receptive to innovation [in a recession]."

SPE Networks Asia saw growth during the SARS period, according to Ow, which he attributes to the broadcaster's size, flexibility and constant effort to connect to its viewers. Ow believes Asia's experience in recent financial dramas will help it ride out the credit crunch.

"Asia has a benefit in having gone through this already in the last 10 years," he says. "The mood is a lot better here than in the rest of the world."

Ogilvy & Mather's Mangham is another who suspects Asia will recover quicker from the recession than the West.

"The fundamentals in Asia are strong, longer-term," he says.

Elizabeth Armstrong, global head of marketing of Standard Chartered's wholesale banking division, has been based in Singapore and Hong Kong for the past 10 years. Standard Chartered Bank recently announced it would be increasing its marketing budget in 2009, a continual rise that it has made each year for the past few years. This comes at a time when some of its competitors, such as DBS and Citibank, are in crisis mode and culling staff.

Armstrong concurs that in Asia things turn very quickly, and essentially people are resilient and human nature doesn't change.

"We're always wanting to improve, and want something for nothing," she says. "We want houses, to be loaned money, to eat [etc]. The mistake Standard Chartered made in 1997 [Asian crisis] was we stopped hiring, stopped looking for talented people. We're not doing that now. More so now is the time to hire. You have to look at ways of improving your marketing methods and upskilling your workforce."

Armstrong's opinion is that not only is the recession an opportunity for marketers in general, but it's a chance for them to analyse how their budget is being spent.

"You can only see these conditions as opportunities," she says. This is when you'll add value to your organization. Marketers can help define their company's positioning. It's also a time to look at how marketing money is spent. A lot of [marketing] money is wasted. It's a case of money better spent, not how much is spent. That's been our philosophy here."

Despite the optimism from many quarters that Marketing spoke to for this story, none of those interviewed tried to sugarcoat the current financial tornado. All admitted the marketing and advertising industries, like all other business sectors, were in for a rough ride but amidst all the pain that is yet to come, there is some light at the end of tunnel.

"It's right for people to be cautious," Ogilvy & Mather's Mangham says. "It's a time of honest reflection, to look at the strengths and weaknesses of your businesses. Recessions are great differentiators. They tend to pick out the strong from the weak."

PHD's Chiang believes while there has been too much "doom and gloom", a lot of it is justified. However, he feels brands have to realize they have a number of options available to them during the recession, whether it's consolidating their product portfolios, being non-traditional in their marketing strategy or even using their spending power to own one media vehicle.

Chiang also sees a direct result for agencies in this trend: "What I noticed the most [working in previous Asian recessions] was a greater push towards accountability and shifts in budgets from traditional advertising to more measurable disciplines like direct response. Agencies have never been the same since and this paved the way for metrics, measurement and more sophisticated offerings like econometrics and analytics. What didn't kill us, made us stronger."

Stuart Clark, general manager of MPG Singapore, says where one brand is suffering thanks to the downturn, huge opportunities exist for its competitors which they should take advantage of.

"What I am sure you'll find is that all these banks like UBS for example or Morgan Stanley, even people like Citibank. All of those, in 2009 will likely be slashing their advertising budgets. And so there will suddenly be opportunity for other banks, to take hold of premium positions and to take greater share of voice in the market, and to really steal market share from them. We're actually seeing a little bit of it already, if you look at some of the boutique private banks in Singapore, you're seeing them being a lot more active in terms of advertising because they haven't suffered in the credit crunch in the same way the big global banks have," he says.

Tim Broadbent, Ogilvy & Mather's regional planning director for Asia Pacific, has conducted a lot of research on past recessions and how companies perform both during and after the downturn. Several reoccurring examples emerge - brands that have a plan, that invest in product development and research, and that are bold, do well.

"Companies that are bold and daring, that seize the day, do well," he says. "Investing in creativity of all sorts is a good plan."

But the Beijing-based Broadbent believes knowing how long this economic crisis will last, and planning accordingly, is the key. On average recessions usually last around nine and a half months, and the International Monetary Fund (IMF) predicts the world's real GDP growth will decline from 3.8% this year to 2.2% in 2009. The IMF forecasts an increase to 4.2% during 2010 and most pointedly, in 2009 Asian GDP is predicted to grow at more than double the global rate, led by China, while the US, European and Japanese economies are expected to contract.

So the devil might be in the detail. The next 12 months are no doubt going to be tough for all marketers and advertising agencies. But having a plan, thinking outside the box and focusing on accountability, return on investment and actually engaging with consumers is vital.

And remember, Asia is a beautiful place to be in.

 

 

Public Relations: Spin is in

Journalism's best friend, spin doctoring or the dark art of media management. Whatever you want to call public relations, the simple fact is that PR is one marketing strategy in the current climate that could be a shining light for under-fire marketers. Cost-effective and generally offering both a legitimacy and accountability which generally advertising can't give, PR is a tool brands may turn to as they take a knife to their advertising budgets.

Vivian Lines, CEO of Hill & Knowlton in Asia Pacific, says the PR sector is already experiencing an uptake in interest from marketers, both in Asia and globally.

"Traditionally we have seen the PR sector benefit at the expense of advertising in times of crisis as companies want to make sure they get the best value from their marketing investments," he says. "PR has proven an essential and reliable tool to help companies navigate turmoil, respond to crises or even benefit from the turbulence."

H&K has set up a global corporate response group which offers multi-specialist teams providing analysis, counsel, content and implementation wherever and whenever it is needed, specifically for CEOs and their management teams.

Bob Grove, MD of Edelman SE Asia, believes with trust in business having been severely damaged in the past few months, focusing on corporate reputation for marketers is "paramount".

"Today's sceptical environment means there is less acceptance of advertising slogans and one dimensional corporate messaging," he says. "What we're seeing is increased demand for transparency. Public relations is the ideal platform for transparent communications to build trust."

Groves says his firm has experienced increased interest in digital and social engagement to build relationships that mitigate risk and protect the brand.

"Despite the downturn our research shows 80% of consumers feel that during a recession, it is still important for brands and companies to set aside money for social purpose," he says. "On top of this, 68% of consumers globally also say that in a recession, they would remain loyal to a brand if they support a good cause. So despite the current financial climate marketers must not lose sight of the need to build strong relationships with their stakeholders and maintain a close eye on social engagement."

But it's not all a bed of roses. Many PR agencies are being put on shorter-term contracts, and there has been a rise in the amount of freelance PR practitioners.

"Given the crisis' depth, we do not expect to fully escape the impact of the slowdown - although certainly we do expect to reap some rewards from clients looking for a bigger bang for their buck," Linda Fulford, MD of Fulford PR, says. "However PR is not the be-all and end-all for marketers - as with most other tools they work best in concert with each other as part of an integrated approach that creates synergy and maximizes outreach efforts. Though when there are significant budget cuts a lot can be achieved with PR as a standalone practice subject to the news content."

 

 

Measurement: You put in to take out

Return On Investment - it's a term thrown around marketing conversations with so much abundance it gives other buzz words like Web 2.0 a run for its money. Nevertheless, delivering ROI remains the best way to decipher a marketer's true worth and the industry should never tire of hearing it said over and over again.

Today's economic reality brings with it a whole set of new challenges for brands but many a smart marketer will also see the opportunities which are now presenting itself. As budgets continue to soften in 2009, ROI will increasingly be looked at by chief executives as a figure directly related to some form of monetary reward or value for marketing efforts. Brand marketers who aren't normally concerned with rolling out campaigns which deliver financial return on investment KPIs may quickly find themselves behind the 8 ball when 2009 comes and the credit crunch heats up.

"I think some people have had a wake up call," Don Cooper-Williams, executive director for SAS Asia Pacific, says. "Marketing is always a matter of consistency and so any knee-jerk reaction I don't think is going to do much for people."

Knee-jerk reactions may see some marketers shift emphasis and budget to digital platforms in an attempt to navigate the somewhat unchartered waters of increased accountability and ROI demands. Back in ‘97, war stories from that Asian financial crisis tell a tale where radio, because of its affordability, quick turnaround time and as a natural ATL platform to announce BTL promotions (which advertisers tend to favor in a recession), emerged as a winner. So while radio is still all of those things, the recent credible emergence of digital platforms which are cheap, have a quick turnaround time, don't require much manpower, are more popular and most importantly, measurable, could mean digital coming up trumps for marketers this recession round.

"We all know that those who continue to advertise in a downturn are the ones who come up on top. But the truth is, the print and TV publications will slash their fees to encourage people to advertise, and Channel 5 has already started doing this aggressively, but digital is much less expensive," Enfatico's newly hired global creative director, Josh Sklar says.

"You can take one campaign which costs a 20th of what a print campaign would, and you can make it reach a hundred thousand times more people, and you can target it, and you can track it to see if it's effective, and you can change it on the fly," he adds.

 

 

Online/Search Engine Marketing: Opportuinities in Disguise

Every challenge is an opportunity in disguise, or so the saying goes. As clients demand a higher level of transparency from their marketing spend, digital more than any other media is an area that offers a higher level of accountability to a continually expanding audience.

Digital and online media are not only some of the fastest growing areas of media consumption, but consumers are today connecting all parts of their life from business, social and leisure to the internet. So why not meet them there? The rapidly developing search marketing fields, also allow marketers to connect to their target audience like never before.

Nigel Morris, global CEO of Isobar, outlines four key marketing tips for marketers during an economic downturn. He says the transformation of digital technology; the creation of demanding active consumers who will have tools available to make and break brands; sustainability where brands have a role to play in being more responsible to society and the environment; and the emergence of a new model of globalisation, also known as world sourcing, which is causing a significant rebalancing of economic power and the growth of Asia.

"With digital, the world is more interconnected, interdependent and transparent," he says. Morris adds that online is where the majority of business will be done, which leads to more efficient and effective business models. This includes the customer relationship from contact, service, transaction to fulfilment that will all be web enabled. "Companies that get it right will have a significant advantage in the market," he says.

Like many in the digital media space Chris Ryan, managing director of wwwins Consulting in Hong Kong, argues strongly that targeting consumers via digital and online channels will be more and more important as media costs rise and advertising budgets shrink.

"Accountable marketing will be really important," Ryan says. "Digital is the most measurable and responsive media available to us as marketers, but it is seriously underutilised. Marketers are still uncertain about putting money into digital."

Simarly, Will Swayne, managing director of Carat, argues that in times of economic strain, picking a long term strategy and sticking to the key performance indicators is vital. He says the current climate is the perfect opportunity to assess what you're doing and how you're spending your marketing budgets.

"It's about picking the right amount of money for your company in a recession. Stick to a strategy that has been planned over months and years and not weeks. Have KPI's set against these strategies and stick to them," Swayne says. One particular advantage with online media is the ability to measure the effectiveness and response of specific campaigns via a series of tracking tools.

The pay-per-click model for example allows marketers to track specific words used in a campaign that can be tracked and measured in real time. The one significant benefit of the pay-per-click model is that the effective key words used in an online campaign can then be integrated to off-line campaigns.

Morris argues that digital is going to be a key platform to manage business and says there will be a shift from marketing effectiveness to business effectiveness, but he says it will not be an easy road. "The recession will be difficult for many brands but an amazing opportunity for companies that genuinely innovate, they will be the ones that will win."

 

 

Market Research: Do your homework

In case you didn't get the memo, the ‘launch five things and hope one works' days are over. So how are you going make sure the one product you want to launch or the one campaign you want to burn up TV screens and the dailies, is a hit and not a miss? And remember each one of those misses is going to be tough to take in the coming climate, not just for you, but also for your boss.

As the financial downturn threatens to tighten its grip on Asia, we put the following question to two leading research voices: "Can research ease a marketers pain for the coming year?"

But of course, says Pulse CEO, Bob Chua, who tells Marketing the pressure to prove ROI will be intense in 2009 as every cent spent on marketing will be required to not only do as well at it did this year but to do even better as there will be little room for error for marketers.

"Marketing budgets will be slashed, already they are in places like Australia and the UK, meaning research buyers (marketers and agencies) need to do things in a more cost effective manner," Chua says. There will, he says, still need to be product launches and therefore campaign launches but because there will be little, if not zero, tolerance for mistakes they will need to be done on a "one-shoot-one-kill type mentality and research is going to hopefully give you that".

"Clients still need to produce and deliver products to consumers but they need to make sure of which ones are going to work," Chua says.

Researchers Marketing spoke to indicated in a tougher economy there would be, and should be, more emphasis on the science of marketing and a little less on the art - the art being that little piece of magic where a campaign creative connects with the audience, or doesn't, the science being the part where the campaign is properly tested so there is less guess work... it is unlikely to please agencies.

Ben Llewellyn, Synovate Malaysia's research director, agrees product testing will become an even more important tool for marketers as the allowable margin for costly errors shrinks.

"In times of well being and affluence it is easy for companies to continually test products and even take a bit of a gamble on a product launch, but now that is not so easy - we would expect people to do more product testing to make sure they get things right the first time around," he says.

Llewellyn believes the most resilient brands in the downturn market will be those that can prove to consumers they understand the pain they are feeling.

"We try to tell our clients that they have to empathise with the position that their customers find themselves in. We are trying to get them to do more to learn about how it is impacting the consumers' lifestyles, not just whether they buy more chocolate or less milk, but how it impacts their lifestyle and how we can cater to make sure a consumer can live the same lifestyle they are living now, but maybe it is in a more prudent manner," he says.

Llewellyn predicts some areas of market research will fall to the razor, particularly the longer term brand health work and he says this could be a mistake.

"If you look at tracking work if you have been brand tracking for five years, you can almost lose the benefit of five years worth of work (if you reduce the tracking frequency or cut it all together). Let's say two years time, in 2010, everything starts to turn for the better you are going to have a big gap over the last 18 months - this is really just for tracking, but you will lose a lot of history," he says.

Pulse's Chua says he expects the growing demand for online research will accelerate as the full impact of any downturn starts to be realised and it isn't just the relatively lower costs associated with online surveying that will drive this. The research has gotten more sophisticated from pure qualitative research to the sorts of online research which can even link in to social networks Twitter, Facebook and MySpace to analyse trends and keywords. It might not seem dirt cheap on the initial costs front, but in the targeting it can allow this can mean savings.

Chua suggests a recession next year could create a more lasting impact on what marketers are willing to do online once the dust settles and the market picks up again.

"It is going to be a catalyst, it is going to be great for online advertising, great for online research, it will be a wake up call. In some markets like Australia where newspaper readership has gone below online readership, it has happened much faster than people predicted," he says, adding when it does happen, "it will happen very fast".

Llewellyn warns that online research isn't a panacea for everything marketers will need to know when it comes to spending their budgets efficiently in the next year.

"You have to make a pragmatic decision in the end in partnership with the client if they can't do a piece of work because it costs too much, and if the only alternative is to go online then are they better off having the data then not having anything at all? Probably, not always, as there is nothing worse than a bad piece of research, because it can absolutely mess everything up".