In times of economic crisis, repetitive negative media reporting can dampen consumer demand and seriously erode business confidence. As with other discretionary costs many businesses begin to question the value of their advertising. The Lord Leverhulme cliché re-emerges:

"I know half of my advertising spend is wasted but which half’. In recession should advertising expenditure be curtailed or aggressively used to boost demand?"

Current declining media revenues indicate companies are cutting back as recession bites, arguably putting sales and industry jobs at risk. Advertising spends can be an indicator of how confidently marketers believe in their brands. Weighing up product, targeting and competitive ramifications, they must decide whether to pull back spending or push harder.

At risk are market share, visibility, customer loyalty, even shareholder confidence in the organisation. Short term battening down hatches, hoping it all will blow over, can be costly. However, studies of previous recessions suggest that continued advertising spending increased sales, market share and brand reputation in the long term.

Advertising plays an important catalytic role in building brands, sales, jobs and funding media. Its power lies in accentuating the positive, now a scarce commodity. Nonetheless the ad industry is often charged with creating false needs and overconsumption, perhaps questioning the value of advertising in terms of its potential to be both a wasteful activity and efficient economic force.

The demise of household name retail stores, banks and traditional media may reflect the evolutionary reality of the market and changing consumer expectations. Advertising insights and creativity remain as essential as ever to reflect the zeitgeist. Innovative new digital technologies, social networks and so forth make advertising effectiveness increasingly measurable, arguably less wasteful.

The sad fact is recent irresponsible and unethical business practice seems to be institutionalised. The culture of steroidal market growth, overproduction, overconsumption, overpayment, over looking; has inevitable consequences and externalities: (credit crunch, fuel crises, global warming, pollution, stress, obesity, etc).

Eventually everybody hurts in the interconnected age.

Eventually everybody hurts in the interconnected age. Social responsibility and sustainability are not fashion items, practitioners must reflect on whose interests are being served. Moral muteness and myopia are no longer excusable; clients and agents need to walk the talk. Advertising has an instrumental role to play but must make nobler moves not try to get ‘more bangs for their buck’ using cheap, deceptive, misleading or offensive tactics.

The current global belt tightening echoes the World War era in the UK when advertising focused on public morale, resource management and regulation of behaviour. Brands survived by adopting utilitarian, anti-waste, less frivolous appeals.

It may be that a return the organic wartime marketing diet could yield sustainable green shoots where ‘less is more’. It may be naive to expect a paradigm shift to a lean yet agile responsibility culture where business uses advertising to promote and share ethical values over sharevalues.

Perhaps the big challenge of the recession is not the value of advertising but the values of advertising. Responsible marketers and advertisers are conscious of consequences, doing things right and doing the right things.

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According to the French anthropologist Claude Levi-Strauss, we cook to show we are civilised. So the rise of the Superchef must say something about how much we value the idea of civilisation. Whether on television, web, books or gadgets, they inspire us to see the preparation and presentation of food not just as a necessary chore, but a potential pleasure and focus for friendship, family life and fun.

Collins English Dictionary’s listing of ‘doing a Delia’ (meaning to cook ‘properly’) demonstrates just how engrained the Superchef has become in contemporary British culture. However much we love take-aways and convenience foods, our fascination with these gastronomic gurus reveals a profound desire to connect with each other via the kitchen.

The link between cooking and our desire to be civilised is not just about throwing chic dinner parties, of course. Food is a deeply political issue, raising all sorts of moral and ethical questions. It’s interesting to note how several celebrity chefs have stepped out of the kitchen and on to the campaign trail to back causes from animal welfare to healthy eating.

Consider Jamie Oliver, whose 2005 efforts on behalf of the nation’s school-dinner eaters (however reluctant some of them might have been!) prompted pledges by the UK Government to invest in the quality of school food. More recently he has campaigned to spread basic cooking skills amongst the population. The better we are at cooking, the more choices we have about what we eat – which must be a good thing if we want to move towards healthier or more sustainable diets.

Food is a deeply political issue, raising all sorts of moral and ethical questions

Campaigning and social marketing (i.e. using marketing techniques to further socially desirable objectives) are important areas of teaching and research at the Open University Business School and our partner organisation the Institute for Social Marketing. I thought it would be instructive in this blog to analyse Jamie Oliver’s work in the light of some of the theory we profess.

For example, the Campaign Diamond (Baguley, 2007) is a simple model which can be used by organisations and individuals to gauge how likely a campaign is to succeed before they commit valuable time and resources to going public with it. The model depicts the ‘space’ available for an effective campaign as dependent on four ‘facets’ of a diamond. A balanced profile across each facet is a good indication that your campaign will fly.

The first facet is the problem underlying the campaign. This has to be something significant you can articulate clearly and unambiguously, or you risk demotivating distortion as the campaign develops. For example, some critics accused Jamie Oliver of selectively stereotyping ‘unhealthy eaters’ in his recent campaign.He’s hit back that he was presenting a balanced snapshot of a the issue of poor diet which affects people from all sorts of backgrounds, and that perhaps his detractors just don’t want to admit it. This kind of single-minded focus on a problem can appear simplistic, but has the long-term benefit of maintaining clarity of message.

Jamie Oliver tasting a cocktail.
[image © copyright BBC]

The second facet is social authorisation. This is to do with judging the zeitgeist relative to a particular issue. Mounting concerns about the future health of the nation because of diets high in fat, salt and sugar (mainstays of the processed food of which the UK is disproportionately fond) have led to public anxiety about nutrition. Social authorisation is essential to a campaign’s credibility with news media and decision makers. The political impact of the school dinners crusade is testimony to Jamie Oliver’s good judgement in this respect.

The third facet is operational capacity. This means the ability to convert the enthusiasm generated by the campaign into action. It’s hardly worth firing people up about an issue if you then can’t give them the opportunity to do something about it. Here Jamie Oliver scores a blinder – harnessing the power of social networking so that those reached by his recent campaign share their cooking skills with others. The internet is a powerful tool in this respect, and has the further advantage of popularity with groups that more staid calls to action might not reach.

The final facet of the diamond is the opportunity for social value. This boils down to how big a difference you think the campaign will make. It helps to be as sure as you can about what a campaign will achieve before you launch it, and to have an evaluation method in place in advance so you can see if and when it’s worked. This is where many worthy initiatives come unstuck.

On the other hand, the precise effect of ventures such as Jamie Oliver’s cooking campaign must be hard to calculate in advance simply because of the potential numbers involved. It may be that the most lasting impact lies beyond the relatively straightforward metrics of participation or media coverage in long-term political effects (witness the Essex Superchef’s influential audience with the Commons Health Select Committee in November 2008).

There’s a lot to be learned from these examples, even for those of us without access to the impressive resources which Jamie Oliver has exploited so imaginatively. Articulating a compelling case, making sure it resonates with people, having systems in place which can convert sympathy into action, and being clear about what you are trying to achieve, are as important to someone campaigning for a new zebra crossing as they are to a Superchef bent on changing the nation’s eating habits.

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Terry O'Sullivan is lecturer in marketing at the Open University Business School. He researches and teaches in the fields of fundraising, marketing communications and non-profit marketing.

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There are several things a business can do in a recession to protect the bottom line, although some may have negative consequences for the long term. The first issue is, are you are aiming to down-size or are you looking for temporary measures that will help while you wait for sales to pick up again?

If you are down-sizing, then think – like GE - about what parts of the business you could most easily sell or close down, and what parts of the business you want to keep for the long haul. If the business is large enough, you may have loss-making divisions: these should be moth-balled at once.

If you are trying to maintain capacity, you need to look at discretionary costs that are not essential to stay in business. These are things like advertising, research and development, staff training, long term maintenance which are important in the long term but can be suspended temporarily.

Cutting advertising is potentially dangerous but, if customers are sitting on their hands because of the recession, this should be looked at. Cutting research and development will have long term consequences for the evolution of the business, but much of the expenditure, including the launch or trial of new products goes straight through to the bottom line. You should ask yourself if it could be deferred.

A cash conserving tactic is to defer routine capital expenditure. Supposing your policy is to renew your computers every three years, you could keep them longer. This keeps cash in the company and may also benefit the bottom line if they are already fully depreciated.

Finally, a delicate question is what you do with your staff. Loyalty and quality of service from staff is not helped by making them redundant! One possibility is to suggest they go on to a three- or four-day week, or take three months off, as have the Financial Times and KPMG in recent weeks. It is difficult and expensive to rehire staff when – and if - the boom times return.

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Professor Peter Walton is a member of the Accounting & Finance Unit at the Open University Business School. His research interests are in comparative international accounting and financial reporting in an international context.

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