New ad tactics can weather economic woes: BBDO

NEW YORK (Reuters) - Companies worried about a U.S. economic slowdown should think twice before cutting their marketing budgets, particularly when it comes to money earmarked for more unconventional types of advertising.

A family watches television in an undated photo. Companies worried about a U.S. economic slowdown should think twice before cutting their marketing budgets, particularly when it comes to money earmarked for more unconventional types of advertising. REUTERS/File

So advises John Osborn, the chief executive of advertising agency BBDO New York, whose clients include such heavyweight corporations as Bank of America, General Electric Co., Target Corp. and FedEx.

“Sometimes those experimental budgets do go,” Osborn told Reuters in an interview, when asked about possible reaction to tighter economic times. “However, I would urge our clients to do almost the opposite.”

While some clients may view advertising on cell phones or hosting film contests as a riskier bet than traditional television commercials, the potential impact and returns of such outlets may increase when budgets are limited, Osborn said.

“In tight economic conditions, some of these new mediums are exactly what we should be looking into,” he said. “I think they are incredibly targeted.”

Some industry-watchers have cautioned that tough economic times could spell trouble for spending on experimental media since it doesn’t have the track record of TV commercials, for instance. That in turn could pinch ad agencies that have spent time and money developing new media offerings.

Omnicom Group’s BBDO, long known as one of the top creative agencies for 30-second TV commercials, is among the agencies that have expanded into hot new areas, and in the process has won more than $1 billion in new ad accounts each of the past two years.

These days, the agency often crafts integrated campaigns that combine TV with digital, billboards, print and, in some cases, very unorthodox advertising.

Last fall, for instance, BBDO was behind a stunt that suspended magician David Blaine above New York City’s Times Square in a promotion for retailer Target.

It is also the agency behind GE’s One Second Theater, a campaign designed to capture the attention of audiences zipping through TV commercials with their digital video recorders.


“In a world where everyone is attention-deprived, those are the types of things that can really cut through the clutter,” Osborn said.

Those lessons may become even more important amid signs that U.S. consumers are retreating from their free-spending ways. There has been some speculation that the economy may be in the early stages of a consumer-led recession.

Advertising spending trends tend to lag an economy’s downturn as well as its recovery. Facing greater competition for consumer spending, some advertisers may increase their marketing in the beginning of a recession, then pare back later if a slowdown worsens and hits their bottom line.

But even before worries over the U.S. economy gained momentum, Osborn said marketers have been demanding that their spending on campaigns be justified with a clear way of tracking their impact on sales.

“Marketers increasingly want evidence of success of their efforts,” he said.

BBDO Worldwide CEO Andrew Robertson, who oversees the agency’s 287 offices in nearly 80 countries, said that agencies face greater pressure to create more compelling messages because consumers now have so many media choices.

“All new technologies make it easier and faster for consumers to do what they wanted to do all along. The bad news about that is you can’t expect to hold anyone’s attention longer than you can earn it,” Robertson said in the interview.

“You’ve got to create stuff that is sufficiently compelling for them to choose to spend time with it. There is increasing pressure to create that kind of work,” he said.