Guest Blogger: John Fraser
John Fraser is a marketing machine with a mind finely-honed for the key detail and meaningful insight–to wit, he is our first guest blogger to use footnotes. Following the classic media department training in Burnett, he worked on brands like Kellogg’s, Kraft, GM, and eventually Philip Morris. What few realize is during these early days, he also moonlighted weekends exploiting his silky baritone voice by announcing beauty pageants. Moving to Bayer, Bess, Vanderwarker to pursue sports marketing, he began working on the Gatorade business. He moved with Gatorade first to FCB and eventually Element 79 back in 2001, where he was a founding partner and served as Executive Vice President of Business Development. John has probably forgotten more about sports marketing than most people know; his proprietary exposure analysis for Gatorade sponsorships helped the brand win its first Gold Effie. He left the agency world to become Chief Sales and Marketing Officer for Rosa’s Horchata to scratch a persistent entrepreneurial itch. An inveterate raconteur, a frighteningly powerful golfer and a quick to laugh father and coach, John builds brands and relationships with equal skill. We fully expect to be two bottle a day rice milk consumers when he introduces Rosa’s to the Chicago market…
Advertising as a profession and practice has been taking it on the chin lately. As pressure mounts, clients expect more and more while returning less and less for an agency’s efforts, including civility (See: Marc Brownstein, 5/21/09, Advertising Age). While it can be a struggle to maintain a positive outlook, it is important to keep the big picture in mind. As we approach another Independence Day in America, advertising professionals have something to celebrate: our role in preserving the American “way of life”.
Advertising to the Rescue
It is well documented that advertising helped drive the cycle of increased consumption, production and affluence even in the darkest of times in our nation’s history. Ernest Dichter, consumer research guru from the mid 20th century, suggests that because “our economy would literally collapse overnight [without a continuing high level of consumption] defenders of a positive outlook on life, the real salesmen of prosperity, and therefore of democracy, are the individuals who defend the right to buy.”[1]
Several specific events during the 20th century prove this point. During The Great Depression, which many people, including economist John Maynard Keynes, believed was caused by underconsumption, advertising was used to spur purchasing. Private sector activity, along with New Deal programs, played important roles in preserving democracy and delivering on President Roosevelt’s promise of “Freedom from Want”. Next, as American democracy was threatened by the totalitarian regimes in Europe during World War II, advertising was called on to urge Americans to stop consuming essential resources needed for the war effort. “To persuade Americans to save rather than invest, the government embarked on an unprecedented marketing campaign, selling common sacrifice so that, as Lawrence R. Samuel has noted, it became a ‘secular religion’ which promised to minimize class consciousness, promote pluralism, revive democratic capitalism, and foster postwar affluence.”[2]
The next challenge for advertising was to get Americans spending again following World War II in an effort to prove democracy’s superiority during the early days of the Cold War. “From the late 1940s through the mid-1960s, businesspeople, politicians, the mass media, and many leading intellectuals trumpeted the benefits of the American way of life. They celebrated democratic capitalism, which, in contrast to Soviet totalitarianism, had produced ever-growing prosperity and in turn provided the foundation for an egalitarian and harmonious society.”[3]
Early in the 21st century, advertising was once again called on to catalyze consumption following the terrorist attacks on 9/11/01. As Daniel Horowitz summarizes, “An external threat of unimaginable dimensions, the possibility of a recession, massive corporate scandals and bankruptcies, and a declining stock market prompted Americans to perceive consumption as a critical factor in the nation’s health, and even its survival. We have to spend our way out of this danger, millions of Americans believed, so that the enemies who had attacked us would not have won. The consumer was it the saddle. Unlike in the situation the nation faced during World War II or the energy crisis, this time there seemed no turning back from a full embrace of affluence and a commercialized consumer culture.”[4]
Where Do Things Stand Today?
It is clear from the two recent Newsweek covers that, once again, consumption fueled by advertising will be critical to preserving our economic and political system in America. [5]
Unfortunately, though, the economic downturn is making this more difficult by reducing the advertising resources available to drive consumption and help dig America out of this current deep recession. Ad spending declined 12% during the first quarter of 2009 and VSS, a leading media tracking firm, now expects advertising expenditures to decline 7.4% overall in 2009. Following a corresponding dip in 2008, it was the first back-to-back years of advertising recession in 75 years.[6] This pullback in spending comes amid yet another study showing the effectiveness of marketing during down times. According to a new Ad-ology Research study, Advertising’s Impact in a Soft Economy, more than 48% of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling. Conversely, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business.[7]
Compounding the problem for advertisers are indications from the new administration and Democratically controlled congress that government may be intervening more in the industry. Increased regulation is first on the list, with tobacco and advertising to children in the crosshairs. As Dan Jaffe, EVP, governmental relations at the Association of National Advertisers, points out, “Advertising is the engine of our economy. But the whole movement is toward greater and greater regulation in all areas and all at once.” He quoted FTC Commissioner Jon Leibowitz, who has reportedly said: “Industry needs to do a better job of meaningful, rigorous self-regulation or it will certainly invite legislation by Congress and a more regulatory approach by our commission.” Commissioner Leibowitz also suggested that advertising could be taxed in the near future. He pointed out that with the projected deficit this year of $1.2 trillion, lawmakers on both the federal and state levels would look at taxes on advertising as a way to garner revenue. “There are ways taxes could be imposed: from across-the-board ad taxes [which would] garner as much as $160 billion in the next five years, to specific taxes on unpopular categories, such as tobacco, direct-to-consumer pharma, and certain food categories.”[8]
If the federal government is serious about consumers spending their way out of the current recession, then they need revisit history about the important role of advertising in making it happen. If they do, then they will find that restricting advertising through regulation and taxation will be counterproductive to their efforts. Instead, I would argue that incentives should be given to companies who advertise in a down economy. Further, I believe that the federal government should increase its budget to include a pro-consumption advertising campaign of its own (what’s another $100 million on top of $1.2 trillion?). It worked during the depression and it worked following World War II. Why not now?
I was recently comforted to find that advertising seemingly remains at the corporate grown-ups table and at the forefront of preserving our capitalist economy and our democracy. Over the past month, CNBC has been airing a primetime, limited interruption panel discussion “Meeting of the Minds: The Future of Capitalism.” As CNBC promotes, “The worst economic downturn since the Great Depression has made the American taxpayer an owner in some of the most storied companies in the United States, and in the process, have given the government unprecedented influence in the free market system.”[9] The program “assembled some of the country’s most influential leaders to explore and make sense of this new reality”. Seated among such captains of industry as Jack Welch (former CEO of GE), Vikram Pandit (Current CEO of Citi) and Marc Morial (CEO of the National Urban League) was Shelly Lazarus, Chairman of Ogilvy & Mather Worldwide. Not only does her presence on the show suggest advertising still has an impact on capitalism in this country, but it suggests it may help retool our economic system for the future.
The weight of evidence suggests that over the past century and a half, advertising has emerged to become one of the foremost economic engines of American prosperity. Further, in times of economic, political or military crisis, advertising has been called upon to promote, maintain or even reduce consumption in support of the nation’s critical interests. So, I say, the next time you pass a weary ad man or woman in an airport…thank them for their service to America.
by John Fraser, Chief Sales and Marketing Officer, Rosie’s Horchata
[1] Horowitz, Daniel, The Anxieties of Affluence: Critiques of American Consumer Culture, 1939-1979, University of Massachusetts Press, Amherst & Boston, 2004, p. 60.
[2] Horowitz, Daniel, p. 37.
[3] Horowitz, Daniel, Introduction, p. 7.
[4] Horowitz, Daniel, epilogue, p. 256.
[5] Newsweek
[6] Mandese, Joe, “’09 To See Lowest Growth Rate For Media In 30 Years”, Media Post News, Marketing Daily, Tuesday, February 24, 2009
[7] Loechner, Jack, “Advertise or Die”, Media Post Blogs, Research Brief, Monday, May 25, 2009
[8] Freidman, Wayne, “Congress Pushes Tobacco Marketing Restrictions”, Media Post Blogs, Research Brief, Wednesday, March 4, 2009.
[9] CNBC, CNBC.com, Maria Bartiroma, May/June 2009.