The Curious Case of Marketing Buttons - By: Tower

No I'm not going to name names, but essentially all marketers fall into three buckets: In Bucket One are the companies that turned and ran as the enemy approached. Their "strategy" was simple. Having less revenue flowing in dictated the need for less overhead, so that profit margins remained respectable. Thus, the inevitable hit on the stock price was minimal. That was a very good strategy for about a quarter, or six months at best. And then the gum that had been used to patch the hole in the ship lost its functionality. And the ship began to sink.

The brain trust of these companies, slowly at first, and then with more urgency, tried to mend the hole - selling their souls, so to speak, for another month afloat. Brand attributes and corporate identity were tossed overboard to lighten the load. An SOS was sent - coupons, direct mail, television ads that may as well have said, "Hey, make us an offer, we'll listen." But flailing in the sucking marketplace quicksand, the companies in Bucket One succumbed, vanished entirely or became a shell of their former selves, closing all but a few remaining profitable outlets, discontinuing all but the services still in decent demand. It's unlikely you'll hear much from these companies again. Their lack of vision and initial lack of will assured their demise.

The companies in Bucket Two are by far the most numerous. They split the difference between survival mode and the growth opportunity staring them in the face. They did the right things - maintained marketing spend, managed their outlets and retailers with a softer touch, kept inventory stockpiling to a minimum and showed at least a modicum of awareness in their consumer messaging that all things were indeed not normal, an admittance that represents the first step in maintaining a degree of customer trust. They lost some profitability, their stock price sagged in sync with the overall financial markets, but these companies held their share of market, albeit a smaller market, and probably will emerge wiser and with some new strategies because they were forced to think very hard about operational procedures and more efficient ways to run their operations.

And then there's Bucket Three, containing a small group of new marketing nuggets. They are the entities that recognized what was perhaps a once in a lifetime chance to swim with the sharks. Having drifted in the second or third tier of their category for years, squeaking out a profit because their goods or their services were generally pretty damn good, they were mostly under-capitalized from the start, unable to match the marketing spend of the bigger players, or strong enough to build a distribution system that assured growth through sheer volume.

Could they have done these things? Yes, of course, but their assets were minimal and thus their ability to borrow and to bully was minimal. But these are the companies that saw the recession as their one chance to charge ahead, knowing full well that they were probably risking everything in the process. It's as though they dove as one into the English Channel, and while some lost their way, and their business lives, several made it to the other side. Most of these ten to twenty companies have not made their presence known yet. Like chess players, they are watching and waiting, noting the larger competitors who have vanished and smelling the blood of a few others who are just hanging on. They have a sound and orderly strategy and are laying the groundwork with many of the distribution channels and suppliers who survived by serving the now-vanished competition. When the time is right, and we're getting close, they will unleash a systematic offensive that will seem spontaneous, when in fact it was in the planning stages for months.

These are the companies that will be among the top 100 advertising spenders in three years, a list that will contain a 25% - 35% change from the list of 2008. Those who sell advertising and marketing programs, as well as investors, would be well served to identify those companies in Bucket Three and to aggressively build trusting relationships with them right now, even if the marketing dollars don't flow for another year.

And, just as importantly, as cold as it sounds, those sellers can begin to back off a number of historical big spenders who may survive, but in a consolidated state. They will probably fail to be serious players at retail, or in marketing for some time - if not forever. Certain veteran salespeople have a somewhat strange but effective instinct to "smell the money." If I were running a sales organization that caters to marketers I'd unleash those folks right now.

By: Tower (Name Withheld by Request)