• by April 15, 2008

Once again, media are in one of those strange positions where they must report on the possibility of an economic downturn - perhaps even abetting its occurrence as a result - while knowing that such news can only hurt them.

Consumers and marketers take their cue from the media, so reports of a possible recession quicken the pace of economizing, which always seems to have a disproportionate impact on media companies.

Maybe the full story isn't being told. Maybe there is another side to the impending slowdown that could pave the way to profit during a weakening economy, thus giving them valid, smart reasons for sustaining or increasing their media spending in the months ahead.

Of course, nothing seems to bode well for the economy these days. Headlines about consumers under siege have dominated the news since mid-2006, when gasoline prices at the pump first topped $3 per gallon and alarms about an impending housing meltdown began to be sounded. Every bit of good news since then has been quickly overwhelmed by yet another round of unsettling developments. The consensus is that even if the economy does not slide into a recession it will weaken significantly.

Many marketers aren't waiting for definitive proof that a recession is underway. They are taking it for granted that consumers are getting skittish, so new ad campaigns and retail promotions already feature economizing and cost savings. The push is on to make marketing about nothing but price. Whether or not the economy is truly weakening - and to what degree it is weakening if it really is doing so - marketers believe that consumers think that it is and thus have begun to shop that way.

This combination of media attention and marketing appeals is impossible for consumers to ignore. Consumers are being bombarded with news and offerings that presume they are or soon will be feeling the pinch. This ominous atmosphere of apprehension and anxiety affects consumers, who are often reacting only to fear - but not necessarily in the ways one might expect.

Consumers don't respond to bad news about the economy by immediately slashing all their spending. Consumers economize in stages. Everything does not go out the window at once. The Yankelovich study, "Dollars & Consumer Sense," found that consumers first try to wait things out by putting off buying or waiting for sales. Only when this strategy of delay falls short do consumers begin to cut back. Convenience, novelty and indulgence are cut right away. But quality and service are more precious. These are the last things consumers are willing to trade off.

The key question is not how to adjust to declines but how to find the value that remains in a weak economy. While consumers won't and can't pay for every sort of value when times get hard, they will and can pay for some sorts of value. This is the chance marketers have to thrive and grow that most miss during downturns because they are trying to answer the wrong question.

In a strong economy, consumers are willing to pay for all sorts of value. In a weak economy, though, consumers cannot afford much of the value they find it easy to pay for during better times. But they never walk away from all value and are always looking to enrich their lives with products that deliver quality and service.

Because media companies are a step removed, they are in a better position than advertisers to see these opportunities. This is not necessarily about editorial decisions, but it is a strategic perspective that media companies ought to bring to their advertisers. It benefits all parties concerned - marketers, consumers and media. At the very least, positive, confident moves by marketers take the edge off the fears that often paralyze consumers for no good reason. Marketers can benefit themselves by not overreacting.

An economic slowdown demands careful planning, but not just for retrenchment and loss. Not all brands suffer during hard times; some brands grow. Savvy marketers know this and will make over their brands to focus on the kinds of value that consumers will still buy - even in a weaker economy. Not every business loses during a recession; some seize the opportunities that remain and emerge stronger. There is no secret to this. It just means seeing what value will continue to sell, and then offering it. Media companies can point the way.

J. Walker Smith is president of Yankelovich, Inc., and the co-author of three critically acclaimed best sellers. His new book, with Ann Clurman, is Generation Ageless. (jwsmith@yankelovich.com)