Is our ‘ting recession-proof?
By Jeff Hilimire on Friday, September 21st, 2007I’m currently in the process of watching The Sopranos from beginning to end. We don’t have HBO so I missed out on what I now know is a great show. I’m just starting season 4 and there are some classic quotes I’ve heard so far. Although from a quote perspective I have to say it’s no “Fletch” (”it’s all ball bearings these days”, “I’ll have a Bloody Mary and a steak sandwich and… a steak sandwich”, and “The lob is a very important part of the game”, to name a few).
But there was something that Silvio said in the last episode that I watched that got me thinking about the interactive industry. In the scene, Tony is laying into his captains about their inability to produce revenue during the current recession. He then asks Silvio to “break it down for ‘em”. It goes like this:
Anthony ‘Tony’ Soprano Sr.: Sil, break it down for ‘em. What two business have traditionally been recession-proof since time immemorial?
Silvio Dante: Certain aspects of show business… and our ‘ting.
Classic, right? And it got me thinking. There’s a lot of talk right now about a perceived bubble that we’re in and that at any moment things might start to crumble as they did in the early 2000’s. And that might be true. But I’m starting to think that online marketing might become recession-proof. Or at least that it should be.
As we know, online marketing is still only around 6 - 8% of typical Fortune 1000 advertising budgets (at least that’s the latest figures I’ve heard). Online marketing also easily outproduces traditional advertising in terms of ROI. “Reach” is still something that online can’t compete with against traditional advertising (long live the 30 second spot), but from a pure measure-ability standpoint, nothing beats interactive.
I’d argue that if/when the bubble might burst, advertisers should increase the percentage of their budget that is attributed to online marketing. The ability to say we spent $X and received $Y in return becomes even more valuable when budgets are tight. Maybe then we’ll start seeing some of the TV advertising getting whacked.
In an attempt to paraphrase my team mate Tim, he pointed out the if we do start to slide into a recession this will be the first recession where everyone is so connected and those connections may actually help stabilize the economy a bit.
To your point I have always thought of sales as recession proof. A good sales person is needed even more when things start to go south and a good sales team needs adequate support, such as marketing. Considering Tim’s point that we are more connected than ever, that would mean Internet marketing.
Interesting point from Sherry and Tim. I don’t think our ‘ting is totally recession proof, becuase the industries that will back out of the traditional media markters first (everything housing, banking and automotive - long considered purchases) will leave massive inventory available at a large discount on the major nets and in major pubs. Large marketers will shift their funding here, seeing really high value and broad reach (and safety). But Tim’s right - this is the first recession where marketer’s first reaction won’t be to cut marketing, but cut operations (becuase of the high cost of capital needed for infrustructure).