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April 2009
ADM logoHoliday Season
Whether you are coloring Easter eggs or consuming scary amounts of eggs at a Passover Seder, this is a great time of year. With Spring finally arriving, we can put away our heavy coats and break out the lighter-weight ones.
The optimism that Spring generally brings is offset, this year, by an economy that appears to be in freefall--although I am happy to report that the stock market seems to be on the upswing. While it is tempting to use this newsletter as a diversion, I believe that business people, marketers, and managers are all affected--whether directly or indirectly, personally or professionally--by our economic environment. Therefore, I will not stick my head in the sand--rather I will report my survey findings and those of others and explore what they mean for us.
But first, we wish everyone a very happy holiday!

Public Relations

More Important Than EverMan & woman handshake 

Over the past few months we've witnessed public gaffs by corporate executives and government leaders that make us want to hit our foreheads and shrug our shoulders. We want to shout at them, "What are you thinking??!!" So much the more so for my friends in the Public Relations profession.

One of these friends stated it quite simply and elegantly in his blog. Doug Novarro, of Novarro PR, stated, "the real issue is the continued lack of corporate common sense when it comes to everything from organizational bonuses to perks and incentives."

Novarro goes on to explain the ways in which a PR professional can help corporations frame their activities and heighten their awareness of how important context can be. "This doesn't mean that companies should do away with perks and other small benefits entirely - especially for employees who are not at upper executive levels. According to a recent Wall Street Journal article, to maintain already lean staffs, many companies actually are adding relatively inexpensive morale-boasting perks for the little guys. These perks include child-care centers, scholarships for employees' kids, concierge services, expanded health care and massages.
"Yet, even with perks such as these, timing is everything. You obviously wouldn't want to roll out a new slate of perks a week after announcing a new round of layoffs, especially if you are a high-profile public company. Even if spending on these perks is minimal, the potential negative public relations from these actions could outweigh the positive internal message.

"So, today's organizations simply have to be flexible and use common sense when it comes to planning for, and announcing, policies for dispensing perks, bonuses and incentives. To avoid being forced into a defensive mode or having to deal with a public relations nightmare should questionable policies become the subject of public scrutiny, companies need to establish a better offensive game plan now. And the framework for that plan needs to be built on common sense practices."
Common sense. AMEN!
Optimists and Pessimists
Family shoppingNew Study Identifies Who They Are
It comes as no surprise that more than half of Americans are pessimistic about our current economic environment. Yet a new study by National Research Network, one of ADM's data collection partners, sheds some light on who they are, and who the optimists are.
According to this new study 61% of the population are pessimistic--that is, they see the economy as worsening over the next 6 months or remaining "poor." On the other hand, 30% are optimistic; they believe the economy will improve over the next 6 months or remain good (or better). The study goes on to describe each group:
  • Pessimists.  They are a little more likely to be women (52% vs. 48% male), they are a little older (49 years old, on average), and they are not quite as affluent ($60,468 household income, on average). Interestingly, they are LESS likely to live in the Eastern part of the US.
  • Optimists. Men are more optimistic than women (54% vs. 47%). The average optimist is 5 years younger than a pessimist, and his or her household income averages $10,000 more per year. Optimists cluster in the Eastern part of the US (27% vs. 17% of pessimists). 

There are several things we can read into these results. First, older people--including retired people and those preparing to retire--feel more at risk than younger people, who can more easily ride out this period.

The burden of supporting families may be felt more deeply by women than by men. Women tend to be more pragmatic than men, and view the loss of a job or reduction of income in terms of its practical implications: food, shelter, education, and clothing. Moreover, single-parent families are overwhelmingly headed by women and job losses hit them even harder.

As for regionality, this may be driven by the housing market, which has hit California (West), Michigan (Midwest), and Florida (South) much harder than places in New York or Pennsylvania.

These measures will be worth tracking; if the government attempts to stimulate the economy are effective, we may see some changes by the summer--fourth quarter at the very least.  If they aren't effective.....let's not go there.

Survey On The Economy--Wave II
How Are We Doing? 
First I'd like to thank you for participating in this survey. I try to keep them short for your convenience.
The severity of this recession/depression is well established, as the proportion of people who say the situation is "very serious" increased from 91% to 98%, between last November and last month. While this may not pass the "statistical significance" test, it is meaningful, directionally. Likewise, there are more people, now, who believe that we have "yet to hit bottom"--80% vs. 73%. Reactions were nicely summed by one respondent who said, "Just plain scared and it is difficult to make personal life decisions." It is this hesitancy which has had so many ripple effects throughout our economy.
There is diversity of opinion as to how long this will last, but half believe the recession will be over by the end of next year and a substantial 25% are still not sure. One thing that comes through many of the comments is the impact the Federal government will have on our economic future. Nearly one in three respondents is confident that the government's response so far will be successful. Less than 10% are pessimistic about this, while the balance is just not sure. Many believe that politics is too wrapped up in finding solutions to this situation. As one person put it: "Nothing that the Republicans say has any credence, and I'm not entirely sure the Democrats understand everything they need to."  Some say that the way out of this morass is consumer spending, while others say, "We have to learn to live with less and live on less."

Since last November, more companies have been tightening the reins on spending.

  • Delays in enacting marketing plans or expansions went from 12% to 33%.
  • Reduction in T&E spending nearly doubled from 16% to 31%.
  • Increased problems with collections or bad debt more than tripled from 9% to 29%.
  • Delays in granting raises or bonuses nearly tripled from 10% to 29%.
  • Declining sales rose from 16% to 29%.

People have noticed stunning changes in their communities.

  • Small and large business closures were observed by more than 80% last month, compared with 14% last November.
  • Less crowded retail stores were noticed by 75%, vs. 19% last Fall.
  • Less crowded restaurants were mentioned by two-thirds of respondents in March, compared with 21% last time.
  • 'Increased home sales" have tripled: 22% mentioned this in November, and 67% said so in March. In addition, observed foreclosures rose from 10% to 23%.
  • Stalled or abandoned construction sites were noticed by 12% last Fall, but by 47% last month.

On the personal side, we see some of the reasons for the observed changes in communities.

  • Nearly two out of three respondents have cut back on "various personal purchases."
  • Fewer people are eating out--this reduction more than doubled from 24% to 53%.
  • 41% have reduced entertainment expenses, aside from eating out.
  • Twice as many people have pulled money out of the stock market or mutual funds (13% rose to 27%), and a few more did not add to retirement funds (7% went to 18%).
  • A few more people have postponed or cancelled major purchases such as automobiles and major appliances (15% to 25%), and 20% have postponed or cancelled home improvement plans.
  • Luckily for my readers and friends, few are concerned about losing their jobs. Of course, a number are retired or in their own businesses.

Concerns about the overall economic situation are varied, but cluster around retirement savings (21%), the financial industry (20%), the stock market and government spending (12% each). However, several people noted that they are concerned about all of these things, and that, indeed, they are all interconnected--and possibly interdependent.

It seems like a blinding flash of the obvious that time will tell the real answers to these questions. For us poor mortals, it's the waiting and the living through these times that is so trying. Let us continue to be supportive of our friends and colleagues and, to the extent possible, contribute to our economy by buying things (there are bargains all over the place!) and enjoying life.
Upcoming Events--A Trifecta!
April 22, 8:00-10:00am
SMPS-LI is presenting "Sexy Models! (a.k.a. Building Information Modeling)," featuring an expert team from H3 Hardy. As usual, the meeting is held at the Milleridge Inn, Broadway, Jericho. Visit for more details and registration.
April 22, 11:30am-2:00pm   
International Association of Business Communicators-Long Island
is featuring "Tactics to Help You Survive-And Even Thrive--In A Down Economy," featuring Louis DeMars, principal of Louis F. DeMars, C.P.A P.C. The program will be presented at Blackstone Steakhouse on Pinelawn Road and Rte 110 in Melville. For more details and to register, please visit 

April 22, 6:00-8:00pm 
The New York Chapter of the American Marketing Association presents another healthcare-related program, "The Retail Revolution In Health Insurance Marketing." This program, held at the offices of the New York AMA, 116 E. 27th St. For more information, please go to
This practice is dedicated to helping companies become knowledge-driven, rather than assumption driven about strategic and tactical decisions concerning lines of business, branding, communications, and various marketing activities. For more information about how we do this, case studies, frequently asked questions about marketing research, and testimonials, please visit our web site:

Ann Middleman