Firing up the economy // An upfront Guardian ad // Ronseal agencies
Dominic Mills looks at the true role of advertising in helping get the economy back on track. Plus: the Guardian tells it like it is; and a new naming convention for agencies
I got some cash out of the ATM last week. It was the first time since late March.
I’m not the only one not whose spending habits have changed dramatically. Legal and General’s look at the isolation economy shows that while we may be spending more on basic and essential items, discretionary spending has collapsed and overall spending is down 31%.
Some of this is because there are things you can’t buy, and some because we don’t just feel like it or it seems pointless.
And yet, at some point, we need people to start spending again. Without that, GDP will flatline and standards of living (and tax revenues) follow accordingly.
After 9/11, George Bush told Americans that it was their patriotic duty to get out and spend. And they did in style, fuelled in some ways by an advertising industry eager to do its bit. Here’s a General Motors ad titled “Keep America Rolling” and a special zero-percent finance deal. Patriotism and family were just two themes that ads milked.
I dare say we might see some of that repeated when governments seek to fire up their economies post-lockdown. I’ve seen — and participated in — conversations about what the ad industry will look like post-lockdown. But as far as I can tell there’s not much conversation about what role, in the collective sense, the industry can play in stimulating GDP.
Sure, there will be some things it does at the margin. Fashion retailers, for example, are said to have up to £15bn worth of stock they need to unload. Some of this activity is already visible in cut-price online sales at John Lewis and the likes of Debenhams, but we can expect a veritable onslaught of ‘Sales’ ads that will dwarf Back Friday and Boxing Day norms.
That may tempt some people to spend money they wouldn’t otherwise do, but since it is at huge, possibly loss-making, discounts, it is not likely to be of much use, other than in the short term, to the retailer or the economy as a whole.
Th question, then, is can advertising fire up the economy? People in the business would like to think ‘yes’, and point to the way in which GDP and adspend are linked to each other. But, as far as I can see, adspend tracks GDP rather than leads it.
A much better brain than me has looked at this subject too, and I can’t point you to a better a guide than Bridget Angear’s, AMV BBDO’s joint chief strategist, whose Advertising Association essay ‘Does Advertising Grow Markets?’ you can find here.
And her conclusion is that, except in a few cases, it doesn’t. And while she looks at individual markets, I think her conclusion works for the economy as a whole. This may be an unwelcome idea to many, but the truth is that most advertising is about gaining marketshare — buying Brand X fridge rather than Y — or bringing forward a purchase that might/would have happened anyway.
Market growth (and GDP), on the other hand, is driven by a combination of rising incomes, technology, product innovation and quality improvement, price and social change. Advertising’s role is to communicate these things but it does not in itself have any bearing on them.
But that is to take a pessimistic or narrow view of the role of advertising in what are never-seen-before circumstances. There are some roles that it can play whenever the government takes the brakes off the economy. At the very basic level it can cheer us up — a signal, if you like, of near normality.
It may in the most general sense therefore encourage us to open our wallets. Money we might have spent on a holiday will go towards a new TV or laptop. There are clearly also latent areas of delayed consumer demand, and even if at the other end of the spectrum all it does is bring forward purchases we might otherwise have delayed, that is not to be sneezed at.
Guardian tells it like it is
While not everyone is comfortable with the sometimes-combative role taken by the media in scrutinising the government, most people would agree that they are fulfilling a useful function.
But for how much longer? Newsstand and advertising revenues are falling fast and, as Enders Analysis describes it here, journalism is on a dangerous precipice.
I was struck by this ad in the Guardian’s Saturday magazine which shows figuratively that this has indeed happened. I don’t think I’ve ever seen a media owner spell this out in such a stark fashion to a consumer audience. Please fund us through donations or subscriptions, it says, or we’re toast.
It’s certainly one way to get a reaction, although it’s not something that would work for other media owners, or indeed any brands. You can’t imagine BA saying ‘please book some flights and don’t ask too hard for refunds otherwise we’ll fold’, or C4 pleading with viewers to watch its shows so it can persuade advertisers to spend some more money.
Enders advances the argument that a combination of government funding, plus some support from Big Tech, is needed. Hmmm…well, I can see why you might offer the begging bowl to these people, but that is to sup with the devil and will surely bring a whole other set of problems.
A more sustainable route, surely, must be for publishers to get on board as fast as they can with the ISBA/AOP recommendations from earlier this month.
New agency, new naming convention
If you studied new agency naming styles over time, you’d see a pattern. The classic names on the door — back when individual names meant something and adland was obsessed by the cult of personality — which were usually a combination of suit, creative and planner (sometimes with a media specialist thrown in); the esoteric — Mother, Adam & Eve, Lucky Generals, Naked or Krow (which was ‘work’ spelt backwards) — requiring explanation or open to interpretation; or those that sought to catch the data/tech wave — Hearts & Science, Brainlabs, for example.
But Ronseal-type names are few and far between. It will be interesting to see then if the thinking behind the naming of James Murphy and David Golding’s new venture catches on.
I must confess that my heart jumped when I saw the story last week about the launch of New Commercial Arts. It perfectly describes what it sets out to do.
There was a time, maybe around the turn of the century, when some creative agencies thought they were in the arts business, as in creating ads that could be seen as art in their own right and if it had a commercial application that was a bonus (for which the client ought to be grateful).
My view was they were in the business of applied art, driven by a commercial purpose and if there was an ‘artistic’ bent to it, that was the bonus. Think back to the original Shell posters or further back to the Pears Soap posters, the most famous of which was an adaptation of a painting by the artist John Everett Millais. Commercial first, art second.
In that sense, then, New Commercial Arts is a back to the future name. But it also perfectly reflects the current climate.