Does a Recession Inspire Innovation?

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The answer is clear: it has to. Plato set the precedent when he said, “Necessity is the mother of invention,” in his iconic Republic, and the logic still applies today.

We are certainly in a time where consumers, their confidence at a shocking low, are necessitating change. These leaner times mean businesses who respond to unhappy consumers’ outcry by creating new solutions or evolving their products and services to meet changing needs will not only emerge from troubled economic times in tact, but stronger.

Consider the following quotes:

“Surveys tell us that consumers are more pessimistic today than at any time in the past 25 years.”

“We are in a period of vast structural change, as industry adjusts to new technology and fierce new competition in world markets.”

“It is just such a state of healthy dissatisfaction as this that has been responsible for most of the progress of the world, and it is a good thing for business and advertising that smug satisfaction is no longer being tolerated.”

Each seems to provide a perfect synopsis of our current state of crisis. But, the quotes come from past Advertising Age articles and were actually published during the economic downturns of 1973, 1981, and 1932, respectively.

It’s easy to get caught up in all the doom and gloom of the economic times, but a look back at all of the downturns since 1929 is actually pretty exciting. Don’t get me wrong, the current situation is very real and painful, but as we get caught up in day-to-day survival modes we forget the positives that come out of a recession.

Ad Age is one of those success stories. The publication was founded less than 90 days after the stock market crash of 1929 and has reported on every downturn since the Great Depression. Bradley Johnson, Director of Data Analytics for Ad Age, details many successes in his white paper, “Downtime Opportunity: Marketing and Media Innovation in the Great Depression and Great Recessions.” He investigates company and advertising reactions during three specific periods that mark the deepest economic slumps the U.S. has experienced: 1929-33; 1973-75; 1980-82.

Johnson’s findings are fascinating. It’s no surprise that there were layoffs, closings and cutbacks. It’s the flip side that lured me to read more. He states, “I was more surprised and intrigued by the innovation that has occurred during the toughest times. Radio and refrigerators came of age in the 1930s, Time launched most of its biggest magazines during recessions, including People in 1974. The nation’s largest newspaper (USA Today) and many pioneering cable networks (including CNN and MTV) launched during the deep recessions of the early 80s.”

The list of forward-thinking ideas born during hard times is impressive. A few additional success stories Johnson mentions include:

  • Publications like Time, Fortune, Sports Illustrated and Entertainment Weekly
  • Cable television channels like USA Network, Bravo, Cinemax and Weather Channel
  • Airline industry loyalty programs, starting with American’s AAdvantage program
  • Auto industry rebates and parts-and-service maintenance programs
  • Premium brands like Fancy Feast cat food, Absolut vodka and Calvin Klein designer underwear

The extremes of the Depression produced radical advances in the technology for radio, and the development of refrigerators and the frozen foods industry. The list of improvements and firsts goes on and on. These innovations have each had amazing long-term impact on not just our economy, but the way we live and do business.

All this information was not just enlightening to me. It’s exciting. We are on the cusp of something new, and we have the opportunity to not just be a part of it, but to create it. From the very first post on this blog, I have been saying that women are responsible for an overwhelming majority of purchase decisions, making them the Holy Grail of consumer marketing.

If past history reveals that recessions are indeed a time to be innovative, now just might be the perfect time to speak directly to the female audience and capitalize on the social media that can help you do it. If you specifically place your focus in these directions, innovative ideas will begin to emerge.


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Stephanie Holland is President and Executive Creative Director for Holland + Holland Advertising, Birmingham, Alabama. Working in an industry that is dominated by men, she is one of only 3% of the female creative directors in the country. Stephanie works mostly with male advertisers, helping them successfully market to women. Subscribe to She-conomy by Email
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6 Responses

  1. I read your blog entry and was inspired to write myself. Like you,I’m just not buying in to all this “doom & gloom”. The Federal Reserve bank just authorized taking some more ink and paper — and printing more money. Strange as it is, I surely couldn’t make this up…..

    I’m and African-American woman, and I don’t think I’ll ever forget going home to Philadelphia at Christmas time after 9/11. I had two beautiful great-aunts, 93 and 96-years-old, who were sitting together and called me over. When they asked me how New York was doing, I replied, “Still worried, scared, and sad.” They looked at each other knowingly, and the younger of the two took my hand and said, “Now you know baby, we been through much worse than this.”

    The truth hit me like a brick – What could I do but laugh?

    We can only create the future, from where we perceive ourselves to be in the present.

  2. Awesome post. Thank you.

  3. If you ever want to hear a reader’s feedback 🙂 , I rate this post for four from five. Detailed info, but I have to go to that damn google to find the missed parts. Thank you, anyway!

  4. Thank you for the great article. I believe ppl can be innovative all the time. But it is in bad time that they are pushed to ACT.

  5. This is a great post but I disagree with linking out to an Ad Age Report that has a cost associated with it. This is au contrair to accepted marketing principals, especially in this challenging economy for males and females. 🙂

    • Thanks, Lee. Good point. I would agree with you more if I were making money on the purchases of the report. I did personally purchase it and tried to deliver the jest of the report along with my own opinions. But in all fairness to AdAge, it would not have been fair (or even approved legally) had I reiterated the entire report or not given them due credit. I do hear what you are saying, but the report was very good and while I feel I shared the highlights, for those who might want more in depth data, I also felt compelled to give them that choice. Thanks for your input! 🙂

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