Ok, for most of the advertising and corporate world 2008 was not a great year, and yes even Fallout understands first hand that almost all businesses are being forced to cut back in some way. We know many of our friends and colleagues have been affected by layoffs and downsizing. Financial institutions as well as online startups are closing or being gobbled up at a frightening pace. So we sympathize when we hear how corporate budgets have been stretched to an Ebenezer level of thinness. No doubt, 2008 will eventually be remembered for the tough economy. However, it is just these sort of times where we should learn to appreciate what really matters most. No matter how bad our little world of advertising and business may seem, we in the USA are are still far more fortunate than the rest of the world. Hopefully this time of realignment can help us learn now to keep what we do in perspective – in good and bad times. For our year end review here are eight things that we have learned in 2008:
Just like the dotcom bust of 2000-01 this economic downturn was signaled a year in advance. In the second half of 2007 we saw several business industries dry up hiring and tighten their budgets. Like all discretionary spending, private schools have been reporting a 5%-10% decrease in enrollment for the past year with predictions for even greater decreases in 2009. Not to beat a dead horse but we have been advising clients all year that green initiates and nonessential spending must be properly utilized. We saw similar attitudes toward "project spending" back in 2000 and this year the only sound advice we could offer was to be leery of overcommitting or signing onto claims that will be difficult to sustain. The best thing we know is that the economy will rebound, if not in the first quarter of 2009 then soon thereafter. Whether it starts now or six months from now, when the economy rebounds, the people who rode out the storm will be anxious to get back into heavy promotions and advertising... just like it was in 2003.
As we go forward and as all generations are adopting what was once "bleeding-edge" items, it is clear that much more of out future is going to be controlled by very high tech materials. HDTV will come of age in February 2009 as well as numerous advances in consumer technology which will now develop into normalized use for everyone. We have seen movies and the world of sports begin to embrace 3D broadcasts which will lead to more mainstream uses. Advertising as well as numerous trickledown effects from industry will make embracing new technology more of a common practice. We can argue the environmental and moral plusses and minuses of such replacement behaviors but just remember this is not an endorsement just an observation. The economic constraints will cause purchases to be less frequent for now but wise advertisers will see that as an advantage for this down time and focus on the quality of their product now. When the economy rebounds more of a focus can be placed on replacement/upgrade.
It was not good to see the closing of many agency doors this past year. Expect to see numerous combining efforts between shops as they try to reposition themselves and unload the cash bleeding that their overinflated charges have protected until now. The reverse will also be true, many smaller shops will benefit from their experiences of the past few years and gain influence as clients become more comfortable with a shift away from the "one ring to rule them all" agency model. I feel clients will be partnering with many diverse experts in the years to come to get the best bang for their buck buy gathering from a team of diverse creative shops. There may not even be a new 'agency model' because much of the agency mindset is so self serving. My hope is that more of a partnering mindset is adopted. More firms should remember that our work has to actually work for our client, not win us awards and buy Lamborghinis. Client focused projects don't start with our bottom line but that of the client. How is your agency thinking?
Experience is becoming more important than event and having the 'right' product is more important than convenience. Destinations are not as important as time spent. I'm not sure where this will effect the economy the most but it will directly play a part in advertising and message crafting of all sorts. Communications will now be forced to stop selling and be more 'legit'. This will change all areas of how customers are attracted and retained. Yes the coming generations are more quickly adopting new technology but also expect them to search for more simple alternatives to everything. If they don't 'need it' it will quickly be seen as junk. Part of this lack of loyalty comes from what we are seeing with the disposable mindset for much of the consumer lifestyle here in the west. A second part of the logic behind this comes from the less is more mindset that seems to be returning to music, fashion and art. Most likely a direct result from a decade of being told how fat they are. Expect consumer messages to require not a sales pitch but rather a list of uses. Video games and frivolous activities can still be cool but excess is starting to be seen by youth as a vice.
That time "wasted" in the good time on things like insurance, and paperwork really are worth it. Learning that you have good legal council or a great CPA can only come in "one of those years". Someone told me that updating your resume the day you start at your dream job can be the best thing you ever do. It may seem like a waste of time then but only when you need it will you understand the value. So too with registering your logo trademark or spending just a bit more to purchase that extra domain name. Sure, it's all minor stuff when you are just trying to "get-r-done" but when times get tight the smart detail minded decisions will bring payoffs or more importantly security. Future minded business leaders will see opportunities to bypass their competition in this down time but not if they are just trying to tread water.
Proper fit.
While most people may think it strange to even consider turning away business in a down period, please look back at 2001 and that period of time and ask yourself if more sales or better sales were the better path for success in that recession. Unless you are Walmart you are likely to do better servicing the same number of people in better ways during a down turn than you will be in overreaching and watering down your product or services. Fallout chose to end our relationship with a few companies in 2008. It was nothing personal nor was it a statement about any of those businesses. In each case the working relationship was not a good fit for our long term goals and the client will be better served elsewhere. In 2001 we experimented with the discount services method, and it was disastrous. In 2008 as it became clear that the economic crunch was indeed very real we made the hard decision to let a few clients go. It was not easy but immediately we had more resources for the projects that were in our area of focus and the quality of the work increased. In service minded businesses, refocusing seems to generate better results while defining more markets seems to stabilize products. Having just been thru this a few short years ago most people should remember this but if not you risk a tough 2009.
We all understand how bad a PR move this is but in a down turn this can be a move that causes your customers to have a tainted vision of your company for a lifetime. Shortsighted thinking in a tough times is easy to do if you are panicked. I could elaborate on the failings of the oil and gas companies for days regarding this issue but it seems they hear the public outcry and are changing their behaviors to match. Yet still there are many that did not see how quickly rate increases in hard times anger the public. Just look at a particular university athletic ticket price increase. This is not a slam on that university but it is great example of what not to do. They got to the top of the basketball world 8 months ago (Go Tigers!), yet now that everyone's operating budgets are tight they are going to drastically increase the seat price and cut out perks for their donors. Ouch! If fans had any doubt before about ordering tickets the university pushed them into making a negative decision. Don't make up a customer's mind that easily. Give more options to them in tough times, offer additional services, profits are tight everywhere. DO NOT take your product or service off a prospective buyer's list just because you need more profit. Find new revenue streams. Find ways to streamline your services, only in "shut the doors or rase prices" scenario should you raise prices in the next 6 months. And 2008 has taught us that when raising your rates is the last option, you are already done.
Fallout will have more fun in 2009.
2008 was wild, sometimes even insane but in the end Fallout Design is better today in all aspects of business operation than it was in 2007. As we look at 2009 and try to map out a plan we can hope that continuing to do things in a casual yet professional manner will be appreciated and valued by our customers. In 2008, many behind the scenes operations made the quality of work improve dramatically. Clients responded favorably too as they excelled with the additional services we provided. We enjoy the relationships that we have maintained will our clients and at the end of the day I know we can produce the same or better results than many larger firms. The process of working with Fallout is what we will continue to build upon as we always strive for a better experiences for everyone. We are fortunate to have relationships with some very good vendors, incredible associates, and some really top notch clients that we can never thank enough. In 2009 we look to enhance those experiences and enjoy more good times as we try not to take what we do too seriously.
Merry Christmas, and Happy New Year from Fallout Design Inc.