Saturday, May 9, 2009

Brand Activities And The Economic Crisis

The global market is feeling the economic crisis and the Middle East is no exception. But we need to differentiate between the “crisis” and the “state of panic” around it; they both have very similar and inseparable effects in the short term.

Considering the “panic” effects, we can say that is already factored in and most marketing and communication budgets in the region are already affected in a way or another. However, once the market will start dealing with the real facts of the crisis, certain sectors will be more affected than others therefore, certain marketing budgets will be reduced while others could even increase in 2009.

Traditional advertising budgets are expected to take a hit in 2009 not because advertising is bad during recession, on the contrary, brands should not stop talking to their customers during crisis time; but because it is traditionally the first way to reduce spending by companies.
Other means of brand communication will be even more needed during the coming year. The reason is very obvious. During the times of crisis businesses, brands and companies need to communicate with their customers, shareholders and with the general public on what is happening inside these companies and how they are going to deal with the crisis and to save and protect what could be saved in terms of market value and shareholders interests. This is where practices like PR will be most needed especially if PR specialists will know how to adapt their services and prove real value during these tough times.

As far as branding in the GCC market is concerned, some projects in the real estate business and other affected categories will be cancelled or delayed which will mean some less work for branding companies as far as these clients are concerned. However, we expect branding services to be in demand during the coming period for other obvious reasons:

1. During crisis, the instinctive reaction is to “Protect the Main Assets” – brands are these main assets for businesses and companies.

2. The current economic crisis will definitely lead to a wave of consolidations in different sectors, mergers and acquisitions will happen and companies with large portfolios of brands will need to rationalize and streamline those portfolios.

3. Life will not stop, and new brands will continue to reach the market. Some categories will experience a slowdown and reduced activity for some time; in parallel other brands from other categories will be created and will need branding services and support.

As a conclusion, 2009 will be a tight year for brand activities in general, but certain specialized services will be even more in demand because of the crisis itself. Branding is one of these services.

Jean-Claude Saade

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