Back to basics: how a financial crisis is good for business

I love recessions. They bring out the absolute best and worst in people and in business. When the economy slows, which invariably does after we have had a delightful run of greed on both Wall Street and Main Street…old terms with new political meanings we will explore in more depth in a later blog…life becomes much simpler. The choices become much more clear, and the consequences of those choices, much stricter. Marketing and PR budgets become leaner and decisions therein must demonstrate value and accountability. Wow! Really?…amazing concepts that have traditionally received plenty of lip service but little action at the height of a burgeoning economy; but now, oh my, are the cornerstones of every recessionary decision. And just how do companies and organizations define and measure value and accountability; and do these definitions change depending on the prevailing economic wind? While of course never overtly stated, they often do. Marketing and PR dollars spent against internal research and audits, strategic positioning, message development, et al, are highest during flush times. They provide an excellent way to spend money and reinforce the importance, the very value, of the synergy between bloated internal PR departments and bloated PR agencies…the very reason for their mutually dependent existence. Alas, with tough times and the shrinking of budgets, value turns more to accountability (not synergy nor size) and metrics not abstract concepts.

It’s almost a cliché that during an economic downturn, we return to those simple, most basic, tested vehicles of commerce. Flat-rate mortgages, not ARM’s, more cash, less credit, personal relationships, not virtual reality, and in the world of PR, positive publicity, not another meeting, lunch, or audit. What a concept…real measurable results against predetermined goals. But what if you went one step further and created a compensation model based on only being paid if this positive publicity actually appeared…not just that it is “in process” or an interview had been completed, but actually had been broadcast or published? Now we’ve really returned to a simple, most basic tenet of commerce…being paid for actually accomplishing a measurable result. Wow…now we’re edging close to revolutionary. But if paying for results-only PR catches on, what’s to happen to all those bloated internal PR departments and bloated PR agencies? Not to worry. Although it would benefit us all if they went the way of the subprime mortgage, unfortunately like these real estate derivatives, bloated PR will rise again like the cycle of greed that fosters it.