Feb
27th

Recession, Spaghetti, and Innovation

Posted by Heather on February 27, 2009 at 2:17 pm

The other day I was making spaghetti in my new apartment and I realized I had no strainer. In college I would just drain the water out of my Easy Mac (I hate lots of water in my macaroni) with a plate over the bowl to keep the noodles from falling to their death. This won’t work for an entire pot of boiling pasta. On this day, however, I happened to notice I had a salad spinner that I bought from Goodwill a few days earlier. Turns out the salad spinner works great for straining spaghetti noodles. Who knew? My last-ditch innovation reminded me of how creative thinking in times of recession really pay off.

The current economic turndown has affected us all in some way or another. Businesses and consumers are tightening wallets and slimming down budgets. Business is slowing because of the current situation and the fear of anticipated hard times. We’re all finding that it’s imperative to be frugal, cautious, patient and, especially, creative during recessions. So what’s the bright spot? We have the opportunity during a recession to refocus brands, clean up shop, create from scratch, see things differently and effectively communicate ideas. Consider the downturn in the global economy a chance to sharpen your creative thinking skills. Creative thinking is, and should be, a large part of strategic business planning — not just something tacked on for aesthetics. In other words, graphic design is a necessity during any recession.

The great depression had a soaring unemployment rate of 25%. Compared to our current 7.6% it seems staggering, but a lot of good things came out of the depression. Companies that continued their advertising and marketing efforts during that time, such as Chevy and Camel, found they were rewarded when the economy recovered. A lot of companies cut their marketing efforts in hopes of cutting back their budget — but they also cut back on profits. By maintaining and even increasing your marketing efforts during an economic downturn, you increase brand loyalty and consistency. And consumers like to see a company sticking it out.

During a recession, folks seem to stay in more. I know I don’t go out to the movies or out to gourmet dinners as often as I did before. Because people stay in more often, they see your ads. After all, what do people do when they have no money? They watch TV and surf the web. While TV was rare and the web didn’t exist, the depression was a time when several companies benefited from aggressive marketing while their rivals cut back and stopped thinking innovatively. Check out this paper by Andrew Razeghi, a professor at the Kellog School of Management at Northwestern University. Razeghi states the following:

Economic downturns make innovation not only more important, but one could argue…that the process of innovation is actually easier to manage and much more cost effective during economic downturns. More importantly, the products of innovation are more valuable during tough times.

In other words, one way to become recession proof is to distinguish yourself through innovation.

Not only are graphic design and creative thinking important in business and your daily life but also in politics. Politically creative thinking could help to solve many of the problems we have and even improve the quality of life. Graphic design is imperative in times of recession — it can be used to improve public safety, promote public health, communicate social problems, and even fix those stupid governmental forms. Further, clear, friendly and informative design can modify consumer behavior. In 1972 (a period not entirely free from strife) Nixon created a program called the Federal Design Improvement Program. The hopes of the program was to better the internal and external communications collateral and environments. Nixon said:

I believe that we all can find that the arts have a great deal more to contribute to what we in government are seeking to accomplish and that this will be good for the arts and good for the country.

Okay, maybe he was a crook, but he hit the nail on the head with this one. During times of recession we need to think innovatively to improve technology, push new product development and increase collaboration. Recessions, and desperation, inspire innovation. Just like my salad spinner.

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Dec
31st

Recession? Choose Not to Participate in 2009!

Posted by Steven on December 31, 2008 at 2:53 pm

Wake up! There is a 32 car pile-up on America’s economic super highway. What to do: think positive and find solutions.

clock top by laffy4k
Image: Clock Top by laffy4k

The first and foremost thing that you can do about the weakening economy is to develop a mindset of success that will see you through these tough times. Smart organizations recognize a downturn as a chance to gain market share. Companies that continue to implement targeted online communication plans, while their competitors cut back, build very strong brand identity and web presence that they can then capitalize on.

Plan, plan, and then plan some more. Preparation will be the key to your success in 2009. Now more than ever, budgeting your marketing dollars is a critical aspect of the planning process. With online marketing playing an increasingly important role in the allocation of those marketing dollars, your online marketing plan should, at its core, include paid search, search engine optimization, online media buying and e-mail marketing.

Research shows that companies that maintain or increase their marketing budgets during an economic downturn come out of it better than those that don’t.

Although your 2009 marketing budget is probably completed by this time, here are some aspects that need attention:

Identify threats.
Identifying any threats to your strategy should be highlighted but not magnified. It is important to understand what may impede your success in 2009, and prepare contingency plans for when problems arise.

Learn from past failures.
Review your 2008 campaigns and prepare data on the campaigns or tests that underperformed. You can learn more from failure than you ever could from success. So answer questions about why certain tactics failed and what you learned from the experience.

Integrate your plan for critical mass.
Complementary tactics improve results. For example, search marketing and online media combined yields higher returns when integrated successfully.

Landing pages will support your conversion funnel.
A landing page is the first page a visitor to your site sees. What do you want the visitor to do? Landing pages should be optimized with the purpose of directing the user to a definable action. If there are other dependencies to driving sales, ensure that those parts of the funnel are held accountable to their target conversion rates.

Carve out a percentage of your search budget for testing.
This point cannot be stressed enough. The key to surviving tough times is improving your marketing efficiency, and this is accomplished by thoroughly and exhaustively testing all aspects of your online campaigns.

While it is not a magic ROI machine, the web is a proven marketing medium that can generate phenomenal returns. Successful online marketing campaigns take time, effort, and creativity; however, these efforts can certainly provide a substantial ROI when compared to pricey traditional campaigns.

Although the economic analysts are downgrading their forecasts, online advertising is still trending upwards. Some publishers are seeing less revenue than they hoped, and because of this they are lowering their CPMs, which gives you leverage in negotiating online media buys. Some of your competition may be pulling back their marketing budget, which provides you an opportunity to gain market share.

Rising above the current economic climate will take strategic thinking and analysis. With careful planning and execution, 2009 will be your year to flourish – and to put the economic alarmists back to bed!

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Dec
23rd

YouTube Is Bad For U.S. Economy

Posted by Vern on December 23, 2008 at 10:21 am

News Flash – The U.S. economy is in recession. OK, so it’s not breaking news, but I believe a major underlying cause of the economic downturn has finally been identified.

No, it’s not the subprime mortgage mess or credit default swaps or the price of oil in July. Sure, all of these factors contributed to the recession we find ourselves struggling with.

But the real culprit is YouTube.

Follow along, dear reader, as I connect the dots.

We’ve been in recession for about a year. Recently, productivity gains of past months have slowed dramatically. YouTube gained critical mass in 2007. Most of the jobs in the U.S. economy are service-oriented with many of us looking at computer screens from 8 to 5 every day. See where this is heading?

Just last week, Nielsen Online released its Topline VideoCensus Data for October 2008. The report details online video viewing habits during various time frames.

Nielsen’s research concludes that 65% of online video viewers stream content during business hours. 65% are watching online videos at some point between 8:00am to 5:00pm, Monday through Friday! The top 3 sources of online video were identified as YouTube, FOX Interactive and Hulu. YouTube traffic dwarfed the other networks in the study.

No big deal you say. YouTube videos aren’t that long, you say. Let’s run the numbers.

According to Nielsen, the average viewer spent 172 minutes watching online videos during business hours in October. The number of streams/viewer was 74 for the same timeframe. From a productivity perspective this is huge. But wait, there’s more!

There were 23 work days in October. Take 74 video streams and divide by 23. That equals 3.2 streams per day. Per day! Now add to this the 2 minutes per stream of water cooler discussion/online sharing that’s sure to follow.

That’s over 5 hours of lost productivity per viewer for the month of October thanks to YouTube.

What about eBay? Twitter? MySpace, FaceBook, the freakin’ Internet for goodness sake. Oops! Wait a second. I make my living on the Internet – never mind.

Hey, have you seen the Santa surfing video on YouTube?

Aloha and Happy Holidays!

Editor’s Note: Before you say anything, we’re not blaming the recession on YouTube. It’s a little jest to lighten the holiday spirit. But then again, Vern may be on to something…

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