Bailout $$$ Will Hurt Marketing
The blogosphere and much of the mainstream media is roiling over news that Bank of America—fresh from receiving $45 billion in bailout funds—sponsored the National Football League’s pre-Super Bowl NFL Experience for $10 million, a five-day event featuring 850,000 square feet of games and interactive entertainment.
“The prominent sponsorship of the Super Bowl says to the American people we’ll take your money and then we’re going to go waste it,” said Tom Schatz, president of Citizens Against Government Waste, a watchdog group, according to ABC News.
Leading Congressional critic, Congressman Elijah Cummings, (D-MD), said, “They should know better, but obviously they don’t,” according to ABC.
Thing is, neither Schatz nor Cummings are in a position to know whether the sponsorship was a waste of money or not.
Heck, I’m in no position to know whether it was a waste of money or not and I’ve been studying marketing for most of my career.
Did BofA have tables with staffers passing out collateral at the event? Did it sign up a slew of young, brand new cardholders-for-life in the NFL’s main 18 to 34-year-old demographic? Do Schatz and Cummings even know what a demographic is?
An intelligent criticism of BofA’s sponsorship of the NFL Experience might have been that the government gave the bank an unfair advantage over other firms who had to pony up their own cash to get a Super Bowl presence. But by that argument, BofA as an unfair advantage over other firms that have to use their own cash to pay for janitorial services.
No one would argue BofA should stop keeping its facilities clean. Likewise, no one should argue that BofA should stop marketing. Companies that stop marketing tend to stop, period.
So-called consumer advocates and consumer reporters rarely take the time to truly understand marketing and advertising, and it’s a safe bet they won’t start anytime soon. So any company that accepts bailout money is certain to have its marketing efforts—the portion of the firm most visible to the public—loudly criticized as wasteful by people who are in no position to judge.
What’s going to happen when so-called consumer advocates find out the vast majority of direct-marketing prospecting efforts are done at a loss?
I can predict what will happen. The headline is just too juicy for most of the shallow twits in mainstream media to pass up: “Bailout Banks Waste Millions in Money-Losing Credit Card Offers,” is a nice approximation of what a good evil-companies-are-wasting-our-taxpayer-dollars headline would say.
Whether or not the federal government should be bailing industries out is debatable.
One thing is certain, though. Marketers working in industries that get bailed out will suffer loud, shallow criticism from those least qualified to give it.
February 5th, 2009 at 10:56 am
When, oh when will these companies learn? I’m all for marketing, but is this really wise use of funds in general, but specifically marketing? It makes me wonder what took banks this long to crash based upon on how they seem to spend so foolishly.
February 17th, 2009 at 6:07 pm
I believe you are right and wrong, Should these companies be bailed out in the first place? Maybe, maybe not… I tend to lean toward the hands off, free market approach. I do believe that marketing is part of any business. If we want to get our bailout dollars back these businesses need to market themselves attract new business and turn a profit.
That said, I think a prime sponsorship at the Super Bowl is a bit of a stretch. I think premium sponsorships, advertising spaces and the like should be reserved for those making premium profits and premium business decisions that insure their premium financial health as a business.
February 20th, 2009 at 12:08 pm
I think your last sentence is the most profound. Over the last few weeks, harsh criticism has been handed out to almost anyone who has anything negative to say about the stimulus. The stimulus plan could be looked at as a extension to the bailouts. The “Bailout” companies and organizations will always be criticized and scrutinized when the non profits, start-ups, art/education institutions, large construction, alternative energy firms and anyone else that gets “Stimulus” money will get a free pass. Bottom line… Govt doesn’t create money. But its now redistributing it and the mainstream press, current congressional and presidential administration will dictate who is to be criticized by labeling them either as a bailout or stimulus recipient.
February 24th, 2009 at 3:48 pm
In some aspects I agree with you Ken, but in others I don’t.
Company CEO’s understand that they must continue to brand, market and advertise if they are to compete with other in their industry.
It’s no secret that bailout funds have been allotted to Bank of America. Speculators are not privy to the information behind campaigns, or contracts that were previously signed several years back.
Corporate marketers and advertisers understand that they must continue to court the American public. Yes they will watch and advise their dollars a bit more closely.
Corporate advertisers will in essence do as much as they can with the cash at hand to increase profitability. Yes they will look in the window at the money they had spent and whether or not the public is concerned by this.
In retrospect, they recognize that the public cannot and will not run the companies. The public won’t get criticized for bad decisions either.
The bailout won’t hurt marketers. Corporate marketers, advertisers and CEO still recognize that accountability still rests with them.
Kirt Cable “The Ace” of Direct Response Copywriting, is one of the leading business advisors to “Top Producers”. He can be reached at iaserv@yahoo.com or www.cablecopy.com.