Brands responding to the economic climate with Susan Baier and Drew McLellan | On Top of PR podcast

- Hello, and welcome to the new episode of On Top of PR. I'm your host, Jason Mudd. Our show is presented by ReviewMaxer. We wanna thank them for their presenting sponsorship. Today we've got a very interesting episode where we're taking some research from brands about their attitudes toward the recession, and there's three things I think you're gonna learn and really benefit from, by watching or listening to this episode. The first one is there seems to be three ways that brands are responding to the economic climate. The second one is that we have research to show that brands who are actively building attention and staying the course and being even aggressive in their marketing efforts will win out over their competition when the recession is over. And so there's links to that in the show notes that you should definitely check out, but we're gonna talk about that as well. The final thing we're gonna talk about are ways to work with your agency if you use an outside agency during this time of uncertainty. There's some really good tips here. I think you're really gonna enjoy this episode. I'm glad you're here and I know you'll be glad you're here too. So here we go.

 

- [Narrator] Welcome to On Top of PR with Jason Mudd presented by ReviewMaxer.

 

- Hello and welcome to On Top of PR, I'm your host, Jason Mudd. Our show is brought to you by ReviewMaxer. I'm very pleased today to be joined by not one but two guests in our virtual studio. And so let's say, hello, Drew and Susan, are you there?

 

- Hello, good morning.

 

- How are you? Hi Jason.

 

- Welcome, glad you're here. Thanks for being here. So today we are here to talk about your annual research survey that you did, and there's quite a story behind it which one of you would like to kind of give the backstory of how you had to pivot during COVID with your survey.

 

- I'll give you a little bit of background on the research. So Susan and I started the Agency Edge Research Series in 2014. And every year we decide on a topic that we think is going to be super relevant to agency owners and we go out into the field and Susan's company Audience Audit does the research. And then we come back together, we review the data and then we go out and tell the world about it. So this year the decision we had made, we always decided sort of at the tail end of the previous year. So late in 2019 we decided that we were gonna ask marketing directors, CMOs, business owners how they were feeling about the economy. Did they think a recession was coming? And if so, how was that going to color their relationship with their agencies? Well, it got to be late February, we were pushing to get out into the field early, earlier than we normally do. And then of course, we got sort of this spidey sense that there was trouble coming around the bend. And so we didn't go out into the field and of course the pandemic hit the US in mid-March. And so obviously we didn't have to ask if they thought there was going to be a recession because we were in the middle of one. So we pivoted and we asked questions about now that you have are in the throws of COVID and the recession, how are you feeling about your business? How is this impacting your relationship with agencies? How is it changing? What you're spending your money on? If you're spending as much money. And we actually fielded this study in late June, early July, which was really at the height of we had just come out of the worst quarter in US history other than the great depression. So it was sort of at the height of the pain point for most businesses, and that's how we ended up pivoting this study to be Uber relevant to folks today.

 

- Nice. And Susan, you guys have been doing this, I believe Drew said since 2014, and I'm sure you haven't seen anything like this disrupt your flow of doing a survey, whether it's this one or the other ones you do for your clients.

 

- No, I mean, COVID has thrown everybody into panic. It seems like from a research standpoint there's a lot of, I'm sure you've seen it. Tons of research coming out about the impact of COVID and the impact of the recession and stuff like that. But, you know, our perspective is always about agencies. And the big question that every agency was asking is what's gonna happen? What are clients doing? And we thought it was appropriate to sort of bring our attitudinal perspective to that question.

 

- And just for our audience, let's differentiate what attitudinal means as opposed to other surveys that might be out there.

 

- So a lot of research does a couple things that are different than ours. First of all, it looks at everybody together. So it shows you percentages of a large group that think this or think that. And the second is a lot of it focuses on grouping respondents based on sort of what their role is or what vertical they're in or how big their organization is. Our approach has always been to look at our respondents attitudinally. We ask a lot of questions to understand sort of the headspace they're in, the things that are concerning them, the background that they have, the assumptions that they're making about a situation as they go into major decision-making. And we look at groups of people who are, who maybe all look the same from the standpoint of how big they are or how small or what their role is, but are very different in terms of the attitudes they have that are fueling the decisions they're making, and we found that in this study too, very different groups when it comes to thinking about the recession and what they're going to do as a result of what's happening.

 

- Right. So while your primary audience for this research, this data is agencies, advertising agencies, digital agencies, PR firms, what we've agreed to do today is kind of turn that information around and share with the marketing community and the brands in the client side what they told you in your outreach to them. And so kind of help us Susan, since you're the research expert here, give us some guidance of the sample that you pulled from, who is the audience that you went to, what do they look like, and so that people can begin to kind of that our audience here relate to those brands.

 

- Sure. So this year we went out to respondents who are active agency clients in the United States. They're working with at least one agency. We have B2B, B2C organizations across the scope of industries, whether we're talking service, retail manufacturing, government, nonprofit. All of these folks have revenue up to $500 million and marketing budgets up to $20 million. So we have a big range of folks from little guys to big guys and really the survey content was focused on, you know, how are you thinking about what's happening economically and its impact on your organization? What kinds of things have you done already at the end of June, mid July, as Drew said. And what do you think you're going to be doing? What are your plans look a little like, both with respect to marketing spending but also with respect to agency relationships and things like that. So it's a very broad-based and very large sample of agency clients in the US.

 

- Perfect. So as I recall, you guys kind of came back with a handful of key takeaways that you learned from those... From that talking to these companies. So let's go through some of those takeaways and share them. And ultimately what I think is it's not only helpful to know the data but then what insight does that give to our audience that they can take either steps now or steps in the future, or begin having conversations with their internal team, their agency. And probably more importantly I would imagine, you know, their leadership team saying, "Here's what I'm hearing other clients and brands are thinking, and maybe based on that, we have this new insight that we may wanna exercise or implement."

 

- Yeah. It's interesting that the respondents fell into three categories. And so Susan and her teams work with attitudinal research is to look at people and say, "These people believe a certain subset of things together. It sort of lumps them into categories based on a bunch of their beliefs." We never go into the study assuming we know what those categories are gonna be, but they fell into three categories. And I think for your audience it's interesting to listen to the categories and sort of self-categorize yourself and see where you fall and then hear how those folks are responding and sort of measure your response against them. So they fell into three categories, 30% of our respondents approximately are what we called a distress. So they are folks who in many ways a lot of their attitudes and their beliefs about what's happening currently in the US, and by the way this study, sometimes we've included international folks but this study was all US-based. But these are people who had a tough time in the great recession. And so they're carrying a lot of that baggage over. And a lot of their assumptions are based not only on what's happening now, but what happened to them last time. So they almost have PTSD about recessions. So they are, they're freaking out a little bit. They're in panic mode. They think their business is gonna be dramatically affected. They think that they've got to cut all spending and really just button down the hatches if they have any hope of surviving the storm. The second group, which was the largest group was the folks that we called pragmatics. So they are... They actually see this. They're like, you know what? Recessions are part of the normal economic cycle. Our business is well positioned to handle a recession. And actually because many of our competitors are gonna dial it back, there's opportunity and we should be stepping in, we should be going big and bold spending more money because we wanna claim market share, while there's less noise in the marketplace. And then the last group was the steadfast group. Again, about 30% of our respondents, they too were very sort of matter of fact about this. Look, recessions happen, but they were less driven to seize the opportunity there. Their strategy is we're just gonna put our heads down and barrel through this. We're not gonna change a lot of things, were sort of the steady eddies of the group, but we will come out on the other side just fine. So that was sort of the core attitudinal differences. And I think one of the things that surprised me anyway and I suspect it surprised Susan as well, you know, that means 70% of the respondents. And there were over 1000 of them. 70% of the respondents were like, "You know what? This is business as usual." And this, a recession, you know, normally they don't come with a pandemic, but a recession is part of business and it's part of the business cycle. And we are in a good position to navigate through this. So I think for agencies it was good news and for brands, if they're freaking out, they need to understand that their competitors probably aren't, and they better get their attention focus back on the game because otherwise they're gonna be the ones who lose the market share.

 

- Yeah, I think the other interesting thing about this was that all of these segments exist in all sizes of organizations, from a revenue standpoint, a budget standpoint. It doesn't matter whether you have an in-house marketing team, how big your team is. We see very large organizations in that distressed segment and we see very small organizations in the steadfast and pragmatic segments. So you can't just assume that because your organization is large that the buying decisions for marketing and the decision makers are going to be feeling like everything's okay, this isn't gonna bother us because we saw folks sort of across all sizes that felt all three of these ways.

 

- Well, that's very helpful. I think anyone listening can clearly kinda self-identify as you mentioned, and if they can't, maybe they need to just ask their coworkers, right? I mean, I think that it's pretty easy to kind of figure that out. So, you know, I like the steady eddy you know, kind of persona. And then I heard, you know, maybe we could call somebody like pragmatic P or something like that, and then distress Deborah may be, you know, no gender stereotypes implied but you know, just kind of those are kind of three ways I would think of it and kind of start to identify, you know, not only you the listener or viewer here, which one you fall into, but maybe where is your leadership team, you know, and who you report to and where are your colleagues and maybe even your direct reports, you know, kind of where are they, and so I would have different messages in ways to kind of communicate with those folks internally. And then maybe... Just one more thing Susan, I would just say, and then think about who your audience is, right? If you have more direct relationships with the buyers of your service, if you're a professional service firm and you know maybe you have a handful of clients or your mass marketing, these attitudes are probably very reflective of the consumer in the marketplace too and how they're thinking. And I love how Drew mentioned it. It's pretty correct if I'm wrong, but it's pretty much divided, you know, about one third feels this way and 30% feel this way.

 

- I think the other opportunity is this is a leadership opportunity. If you are in the, let's seize the day group or the let's just barrel through this group, and you've got a bunch of people who are chicken loitering through the office, right? I think it invites a leadership both internally, and even maybe with your customers to say you know what, "This is the way the economy works." And, you know, you can sort of point back whether it's an external cause like 911 or it's an internal cause just and economic reality, like it was in the great recession, we have these, and we can't stop running our business and making good decisions just because the economy is not as robust as it was. The other thing I think you should be looking at is I would be looking at how my competitors are reacting, because there is opportunity there.

 

- Yeah. We saw lots of opportunity I think in the study. And certainly if you are in an organization and you are feeling like you're in that distressed category, my hope is that seeing this 70% of these respondents are not only not feeling that level of panic that you may be feeling, but have identified opportunities for themselves. You know, that pragmatic group is going out and finding new big things to do. They're actually increasing spending overall and doing some really sort of energetic things to take market share. And even the steadfast group is looking for opportunities to shift their spending around to get more advantage in a tough marketplace than maybe they had before. But I'm hoping that there are distressed listeners out there who may be see in this study the opportunity to see other things that that they could be manifesting in their own organizations.

 

- Well, I think 70% is a key takeaway from this conversation. I wanna make sure our audience doesn't miss that because it is easy to, you know, be a little bit of a nervous Nellie or something like that, and to Drew's point, you know, I had PTSD before this even happened from the great recession, right? I mean, you know, I literally feel like I have, you know, marks on my back from just, you know, getting beat over it. And so, yeah, I mean, there was a lot of sleepless nights for me. And so, you know, Drew, I'm gonna pick on you a little bit and say, I remember you saying once, "In our career, they'll never be another recession like the great recession." And obviously I can't hold you to that, but you know, here we are. So, you know, it's unbelievable is my point, right? That we would be in this situation. But to me, I'm encouraged by hearing there are other leaders in the marketing world who are pragmatic like you talked about. I mean, yes, recessions are coming. We all knew there was a recession coming.

 

- Absolutely.

 

- That's a conversation I had with one of my clients when they started outlying all this cash outlay they had. And I'm like in your industry, you're vulnerable to a recession and we've heard for years a recession is coming, and it sounds like you didn't do anything to prepare for that. Like, let's fix that right now, right? And that's a hard conversation to have but we all saw the recession coming. We just didn't know it was coming when and how deep it was. What other takeaways do you think are relevant to the brands that are sitting in the client seat?

 

- Well, I think there are a lot of them. I think for me, the biggest one from a brand's perspective is there is always opportunity, always, no matter what's happening in the outside world, there's opportunity if you are wired to look for and take advantage of that opportunity. And just like we saw again after 911, just like we saw after the great recession, a lot of businesses went dark. And there's stacks and stacks and stacks of data that said, "When a brand goes dark during an economic downturn, they lose market share, they never get back." And a brand who accelerates, who amplifies their voice during a downturn gains market share that they never lose. And so now is the time. This is a huge opportunity to step in and step up and boldly claim your place in the leaderboard against your competitors.

 

- That is definitely another key takeaway and something that we will add to the show notes, because you've provided me previously with that research. And we'd be happy to put that in the show notes. But real quick we're gonna take a quick break and come right back on the other side and dive more into this topic.

 

- [Narrator] You're listening to On Top of PR with your host, Jason Mudd. Jason is a trusted advisor to some of America's most admired and fastest growing brands. He is the managing partner at Axia Public Relations, a PR agency that guides news, social, and web strategies for national companies. And now, back to the show.

 

- Welcome back to On Top of PR presented by ReviewMaxer. I'm joined today by Susan and Drew, and we were talking about some interesting research they've done in the marketplace. And just before we went to break, Drew was mentioning how based on data, there's some insight that can be gained where brands who stayed the course and even maybe accelerated their marketing efforts, their PR efforts during the great recession actually came out on top in the end. Whereas other companies that kind of, you know did what is a flamingo, where you stick your head in the sand and you show your rear, they've lost opportunity and market share by not being ambitious and by being conservative. Drew I don't mean to put words in your mouth but maybe you could kind of speak to that a little bit more in detail, and then we'll jump right back into your most recent agency edge research data.

 

- Sure. So the data and there are multiple studies, and Jason I know you're gonna share them in the show notes, but there've been multiple studies that have looked at recession cycles from a marketing perspective and a financial perspective for brands. And without exception, the data shows that during a recession or a depression, any sort of economic downturn, the brands that quieted their voice, that stopped spending, that stopped advertising, that stopped reaching out to their constituents, they lost market share that they were never able to gain back. And the brands that stepped into that space that silence and really started telling their story because there was not a lot of chatter around them. They really had everybody's undivided attention. And so they were able to really maximize the impact of that marketing spend. They gained market share which in many cases in the research allowed them to still be the market leader today. And there was one about the cereals. I was like Kellogg and poster, and I don't remember the details. But I mean, the dominance has lasted over 75 years. So, you know, the message is pretty clear to me that those of us who are present and present all of the time, not just when there's a recession or depression, but present when everyone else is quiet we have the stage all to ourselves and that serves to our advantage. And so I think brands need to recognize that this is a really unique opportunity for them to talk to people who maybe haven't paid much attention to them in the past, and that they can really bring some folks over to their side of the fence.

 

- Yeah, very good. We will definitely put some information about that in the show notes. So thank you for sharing that. So we've talked about a few takeaways from your research and how you know, marketers can think about their brand and apply what other marketers are sharing with you in their own business and kind of share that with their leadership team and with their marketing team and perhaps even with their agency. What else did you guys end up finding out as you're talking to these marketers in the marketplace?

 

- So one of the things that I found very interesting just sort of to build on your last point was this relationship with agencies. You know, I was struck by... And, you know we didn't interview 1000 of Drew's clients. This is a sort of a broad-based group across the US and the reliance and dependence on agencies to help them work through these kinds of decisions was prevalent across the board. These folks really want a lot of deep conversations with their agencies. They want their agencies helping them strategically and they're really looking to them for advice. So if your listeners have an agency relationship where maybe they're not taking advantage of that, to the extent that they would I can tell you agencies are ready to have those conversations. Agencies are aware of what we've found from a research standpoint, and are prepared to help clients make decisions regardless of which segment you are in with respect to what you need to be doing now. And I thought that was fascinating because we saw it across the board, again, big companies, small companies, and all of these segments.

 

- You're reminding me of the research you did last year where there are clients who have certain personalities who are leaning on agencies for strategy and trusted counsel, trusted advisors. And then there are other personality types or client types who are just looking for production and getting things done for us. And so I would challenge any of our audience if you're a client and you say you value your your agencies for their trusted advice and their counsel, this would be the time I think to turn to them and say, you know, as I've had conversations with people in our team and said, "What's working specifically for this client that they should do more of, and what's maybe not working or maybe is uncertain right now. And let's consider that, don't kill it, but let's talk about it and make sure whatever we're doing is headed in the right direction." That seems like a natural conversation, you would wanna proactively pick up the phone and talk to your agency about. And maybe I would guess that some agencies might be a little bit timid about being that proactive, right? Bringing to the attention that we know that you're probably making cuts, we know you're questioning your investment, let's have conversations about it.

 

- The other thing agencies do is, so not only does an agency get an agency help a client sort of manage and decide how to handle their budget, but remember agencies have a bird's eye view on what's working not just for you, but for their other clients. And most agencies, at least in my world are talking to other agencies. So they also understand what's happening in other markets or wherever that may be. So I think one of the things smart brands will do is they will bring their agencies closer to them during this economic downturn, and saying "Look, even if you've been kind of a production shop and all that you've done is sort of place an order and the agency has done your bidding, now would be the time to tap into the strategic prowess of your agency, and to say, "You know what? I need more thinkers around the table. And if we're gonna navigate through this economic downturn, we need some outside perspective knowing what's happening in the marketplace with other brands, whether they're in our category or not, and how can we learn from how other people are having success and how can we apply that to our business? This is the time to really tap into the full suite of services of your agency, starting with their smarts.

 

- Susan, I was going to say that you mentioned additional services, right? That the clients are looking for possibly additional services from their agency. Is that right?

 

- Yeah, I mean I think.

 

- Let me ask you that first, but is that right? Is that what I should ask you?

 

- I think they are looking for a broader range of opportunities that they might be able to participate in.

 

- Okay. All right. So let me readdress that, here we go. Susan I heard you mentioned before we started recording this episode that clients or brands are now looking to their agencies, probably to think more expansively both with, you know, what is it that you can do for us that might not cost us more money or that we might be able to scale and get more value out of our relationship. And that may or may not mean thinking expansively about the services that the agency is currently offering today or some new ideas and energy, or maybe even, like I said, additional services coming to the table. Talk about that a little bit, and what you heard from the research and how you interpret that?

 

- Well, I think we saw a couple of things. I mean, it's so surprised that there are a lot of brands who have relied in the past very heavily on, for example in inverse engagement with events and things like that. And that's been completely upended. So I don't think it's terribly surprising that brands are looking to their agencies to say, "All right, we have money we used to spend on that. What should we be spending it on?" You know, that's not terribly surprising. But we also saw a lot of interest, as drew said in clients who were saying, "Tell me, what's going on outside of our bubble? What's happening with other organizations. We have groups in the study who are voraciously keeping up with economic news. And I think as drew said, not only your agency is sort of holding their ear to the ground with what's happening in the marketing world, but they have contacts. They have media companies, they have other kinds of providers who have a tremendous amount of insight across their own client base of what's happening and where their opportunities are. And I think what we see is brands looking at sort of taking a breath and the opportunity, whether they wanna spend more money or whether they wanna move money around to say what haven't we been doing at all, or haven't done very much of that should be a bigger part of our portfolio, and what does that look like? And in some cases, that's gonna be services that an agency offered that they just haven't engaged in before. And in other cases, it may just be sort of understanding the lay of the land from a broader perspective and shifting things around to take more advantage of some of the newer technologies that are helping marketers get through in a world in which we're pretty much online all the time but not necessarily in the office or traveling for conferences.

 

- That's triggering two thoughts in my mind. And one is the idea that I remember in the great recession. It seemed like clients were more willing to try something they weren't willing to try before but they also gave it a very short leash. So they needed to see a quick ROI or some initial results and outcomes to decide if they were gonna keep going down that path. And the second thing Susan was you mentioned media partners and the relationships that an agency has. And I would say, you know, that's a key factor when you think about, you know, at least for what we do at Axia PR work, right? So we're talking to, you know, reporters at the Wall Street Journal, reporters at Industry Trade Media. So they are, you know, very much consuming information and talking to multiple sources. So, you know, a good PR agency is gonna put the R in relationships and public relations to work and have this high level view of connecting and talking to a lot of people, a lot of players and share those insights of what they're seeing both as an agency and what they're hearing from other clients and from other industry leaders and influencers such as the news media. So I think that's a great point. And, you know, some of our best client relationships are when we have a client who comes to us and says, "What are you hearing? Right? What else is going on out in the marketplace?" And so when they lean on us for that, it's a good reminder that we need to be asking those questions and reporting back the information that we pick up on. As we're starting to wrap up here, are there other takeaways you wanna make sure that we shared with our audience?

 

- You know, I think the biggest takeaway for brands is two-fold. One, if you're not out there telling your story, your competitor is gonna be out there telling theirs. So it's time to level up. And two, now is a time for you to look at your agency partners. And, you know most clients have more than one agency. So it's perfectly appropriate to bring all of them together. You don't have to sort of silo your relationships, because there's a lot of outside perspective and thinking and experience, and you're sort of foolish. If you don't tap into that right now to learn how the agencies are serving their other clients, what they're hearing in their marketplace, you know, they have access to information sources like the media partners, where they buy all their media from that can give them a lot of data. So smart brands are taking full advantage of everything their agency knows, so that they're making the best decisions. And you know, the other thing I wanna say is most marketing tactics don't work in a day. So the other thing that I think is unfair and dangerous is if you're gonna try something, if you put too short a leash on it, and you don't allow if the agency says it's gonna take six months to yield results and you pull the plug into, well, you might as well throw that money in a wastebasket and lit it on fire.

 

- Totally.

 

- So we either do it and commit to doing it for as long as it takes to catch hold or don't do it at all. Don't waste your money.

 

- Yeah. That's a really good piece of advice. And I mentioned earlier the short leash, and yes, I recall, you know, clients saying, "We're gonna try this for six months." And then, like you said, two months and they're like, "We're not seeing immediate gratification so we're gonna pull it." And I think that's a big mistake. Susan, what were you gonna say?

 

- I was just gonna agree with Drew. I think it's important to remember that agencies and clients are a symbiotic relationship. They work well together, they survive together. Drew and I talk to agencies all day long and they are very anxious to help their clients. They are working hard to identify efficiencies and new opportunities and help their clients achieve their goals during a difficult time. So, as Drew said, if you're not relying on your agency as much as you could be, change that because they want you to be successful, that's how they are successful.

 

- I would imagine like any relationship as you go through tough times together, the relationship ends up being stronger most of the time or some of the times when it's handled well. And so I think this is an opportunity for clients and agencies to come out together stronger with like a band of brothers or, you know, in some kind of relationship that can over... If you can overcome this, you know, you've got a bright future ahead of you in that relationship so.

 

- Yeah, I mean, we saw, I'm sorry. We saw a lot of folks on our survey who really believe that there is care not only about organizations tasks but care about them. And we saw the majority of these clients wanting to know how the agency is doing beyond things that affected their own account, but how the agency is doing. So there is a lot of sort of shared concern between these two entities.

 

- Yeah, that's a great point, absolutely.

 

- Yeah. A couple of quick things as we wrap up. One, this is a great time. This is a pressure test for you and your agency, right? So if your agency is not more responsive, if your agency isn't bringing you new ideas, if your agency isn't willing to roll up their sleeves and sit down with you and really help you figure this out, that's pretty telling about the relationship with the agency and maybe it's time for you to look for a partner who's more invested in your success. However, as Susan said, in this symbiotic sense of this, you know, we also saw a lot of... In the survey, we also saw a lot of brands saying that basically they felt like they had a choke hold on their agency, that their agency had lost a couple of clients and that they could really squeeze their agency for better pricing and all of that. And my warning would be, if you hold onto their neck too tight for too long, you're gonna kill them. And so you also want your agency to be successful. So I'm not saying over pay for their services, but I'm also saying don't be a jerk and try and squeeze everything you can out of them which is gonna really make them care less about you. If you don't care about them, you know, all relationships are reciprocal. So I think it's an opportunity for you to care about each other and care about each other's business. And as you say, kind of in a band of brothers, get through this together, come out on the other side stronger. And then, you know, you've got a relationship that is forged in something very real.

 

- Yeah, I love that. I love that. Any other closing thoughts?

 

- Get out there in the marketplace, make noise, grab some new customers, now is the time.

 

- Yeah, absolutely. Well, this has been fabulous. Thank you both for sharing your smarts and taking time to come on board here with On Top of PR and share with our audience what you've been out there actively sharing, you know, in the agency world and helping us kinda position this information of how, you know, this is important to clients also. So it's been a pleasure having you on the show. Both of you been on previously, so it's your, our first-

 

- Our two first.

 

- Yeah, our first anchor guests.

 

- It's always a pleasure Jason.

 

- Thanks for having us so much.

 

- Yeah, thank you and be well.

 

- You too.

 

- You too.

 

- [Narrator] This has been On Top of PR with Jason Mudd, presented by ReviewMaxer.