Advertising often captures the economic zeitgeist and reflects some of the anxieties consumers are feeling. For this upcoming holiday season, things are no different. Brands are focusing on savings as potential customers deal with inflation and fears of a recession on the horizon.
“With this heightened economic anxiety, what we’re really starting to see is retailers going more of the promotional route this holiday season. They are highlighting deals and discounts,” said Jeanine Poggi, editor at the publication Ad Age. “This year, it seems like brands are really going to go out there and push how consumers should be looking at their stores and sort of the opportunities there to save money and to buy gifts for people on their list.”
As part of our ongoing Economic Pulse series, “Marketplace Morning Report” host David Brancaccio checked in with Poggi about how economic conditions are changing the ways advertisers connect with consumers. The following is an edited transcript of their conversation.
David Brancaccio: Well, here it is, holiday shopping season and you got to see some of the holiday ads. What do they tell you?
Jeanine Poggi: Yeah, you know, we are in the throes of the holiday season, and we are starting to see ads from some of the major department stores like Kohl’s and Macy’s. And with this heightened economic anxiety, what we’re really starting to see is retailers going more of the promotional route this holiday season. They are highlighting deals and discounts. Typically, the commercials that we see are more emotional [and] tell stories of families coming together and things like that. This year, though, it seems like brands are really going to go out there and push how consumers should be looking at their stores and sort of the opportunities there to save money and to buy gifts for people on their list.
Brancaccio: I see, and one of the biggest consumer brands, P&G — Procter & Gamble — they’re wrestling with this issue of, with all this inflation, people are possibly going to turn to alternate brands, store brands, and not their fancy brand.
Poggi: Yeah, you know, P&G in recent months has underperformed rivals in some categories like razors and laundry detergent and paper towels. And it seems like P&G is really looking to increase their marketing in an effort to convince consumers not to switch over to cheaper brands. They’re rolling out some pretty star-studded ad campaigns. They’re looking at new product features and things like that, really hoping to keep consumers who are certainly considerably cash-strapped at this time for switching to some cheaper brands.
Brancaccio: I’m not, and I’m sure you’re not, much of a fan of inflation in the sense of paying more. But you know what it does have, one attribute which is it’s like talking about the weather for these brands that have to advertise. It connects a lot of potential consumers. You can talk about inflation, and a lot of the audience will go, “Yeah, I feel it.”
Poggi: Yeah, you know, last week, the ad industry actually convened at the Masters of Marketing Conference. And so much of the focus there was this conversation on, like, “How do you protect ad budgets?” And, you know, it would seem that if you have to cut budgets during this time, the area to cut would be advertising. But historically, that’s the opposite of what brands really want to do during an economic downswing. You want to keep the brand top of mind for consumers, so when the upswing happens, they did not forget about you. So I think that’s what we’ll see a lot of brands kind of do during this period of time.