Can marketing cope with the new abnormal?
August 3, 2010
No one can predict exactly where the future is heading, but those who work in financial markets are paid handsomely to do such things.
According to the top brains at PIMCO, Richard Clarida and Mohamed El-Erian, who published a piece in today’s FT, that future looks tougher to read and predict.
The piece makes an interesting read because they suggest we can’t rely on any of the old rules anymore.
“At a fundamental level, the unusual uncertainty reflects the
disruptive combination of deleveraging, reregulation, structural
unemployment, and other ongoing structural changes.
It is the shape of such dispersion that strikes us
as particularly important. It seems that, wherever we look, the
snapshot for “consensus expectations” has shifted: from traditional
bell-shaped curves – with a high likelihood mean and thin tails
(indicating most economists have similar expectations) – to a much
flatter distribution of outcomes with fatter tails (where opinion is
divided and expectations vary considerably).
We should all feel
sorry for policymakers who face such distributions. The probability of a
policy mistake is materially higher, especially as policy measures are
subject to lags. What is less appreciated is the extent to which this
changing shape of distributions affects conventional wisdom in the
investment world, together with the rules of thumb that many investors
have come to rely on.”
If it’s going to play havoc with policymakers, the ripple effect is going to be felt far and wide and will certainly impact marketers.
The challenge here is that most of the perceived wisdom when it comes to marketing and economic theory is based on “the boom/bust cycle”; we are either growing rapidly and everything is rosy, or all hell has broken loose and we need to ride out the storm for a while.
Moving into the world of the “new abnormal” is a place where there will be a series of false dawns and mini busts, creating the problem where it will be impossible to see any kind of linear progression. This will play havoc with plans and forecasts, the only way to survive will to be re-calibrate and develop new models based on the “new abnormal”.
To do this, marketing is going to have to radically change its thinking and be much more nimble; being able to react to opportunities as soon as they arise and pull back, as soon as there are signs of weakness. Budgets will also need to be more flexible to allow for this.
In order for this strategy to be effective, there’s going to have to be a renewed interest in the constant and broad measurement of the consumer’s “pulse” (emotional mindset, mood, intentions, etc), without this, it will be like trying to navigate a stormy sea with out a compass or GPS.
Finally, the old ROI argument isn’t going to go away, with shorter time periods, it’s going to be more important than ever to measure impact and measure it close to real-time.
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