A couple of weeks ago there seemed to be a Red Letter day. It felt like one of those historic moments, like when Kennedy, Lady Di or Elvis died, for the global economic market.
Like most of us, with the notable exceptions of the prescient Warren Buffett (who foresaw financial carnage years ago and sold high) and Damien Hirst (whose recent art auction attracted record prices from investors searching for somewhere safer to put their millions), I was in shock despite certain predictions made over the past few months.
I had suggested that Northern Rock was merely a harbinger for the banking industry in general. I also noted that many of the financial brands continued to spend their marketing budgets attacking beleaguered competitors, thus bringing them all into disrepute. Nationwide, Natwest and many more misguided organisations seemed blind to the plight of the looming mistrust among their customers. Well, many of the “secure” brands, Bradford & Bingley, for example, may no longer exist under their own names as they are broken up, nationalised and sold off. That is still the case, but such huge deals are now swinging between being on or off with increasing frequency, as values for most things, except gold, plummet.
In our industry, I have talked about how the agency networks continue to bail out their brands by acquiring and cosmetically grafting on sexier new start-ups. Trevor Beattie (BMB) was reported to be in talks with his previous employer TBWA, perhaps to be cast as a rescuing Prince Charming. Then it was on, now it is off. Perhaps this is a symptom of the network’s declining stock values. In any case, in advertising such repackaging does not work any more.
The services we provide are in crisis, at least according to the Ofcom report, which predicts an 83% drop in television revenues by 2020. Just as with every other creatively centered industry, we are battling with the democratisation of access to audiences and competing for the right to be the source of ideas; things looked bleak for advertising and media owners even before this credit crisis began. Elastoplasts are not going to heal this wound.
As many commentators have said, the new digital/community/content marketing model is difficult to monetise, as it is less ad friendly than the mature media from which it must cannibalise existing audiences. Just as banks spending more on advertising only make themselves appear untrustworthy, so media owners continue to invest in areas unlikely to increase their revenues. I have also suggested that more and more products and services will return to their heartland to regain their core territories.
Banks should be pooling their resources to support consumer confidence with a single voice and stick to the business of banking. Just banking, full stop.
The American economy is collapsing before our eyes as it struggles to underpin the foundations of its financial house of cards. I was slumped at home watching the moment when the $700bn rescue legislation had just failed in Congress. (Since then it has been passed, but is by no means the end of the matter.)
I, for one, am shaken enough to seriously reconsider what I want and need to do next. Through outside forces, my plans are going to have to be inconveniently flexible and, no doubt, many of us must reassess where to anchor our future hopes and dreams. Yet I also welcome the jump-start as a personal challenge.
Gordon Brown summed it up with a timely comment: “This is no time for a novice.” Since then, his boldness in appointing Peter Mandelson has bolstered his chances of victory considerably.
As I predicted three months ago, at times of uncertainty, people seek reassurance in familiarity, this will now translate from politics into the brand arena.
I admire the resilience of brands such as Hovis (witness the huge PR ripple behind the commercial), BBC, John Lewis, Beechams and some of the high street banks; all of which have the required mettle to survive.
More parochially, I am convinced the wealth of talent in our business will successfully offset the inertia displayed by many of our global advertising groups, who in my opinion, have been in a state of atrophy for far too long.
Quite frankly though, the effects of the banking crisis make our own situation simply pale into insignificance. This is World War Three for Capitalism.