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Don't be a Victim of Fate

December 11, 2008 What do the following things all have in common? Fortune, Sports Illustrated, Entertainment Weekly, CNN, MTV, Absolut vodka. The answer? These were all publications or brands that were launched in the midst of a recession or, in the case of Fortune, a depression (as in the Great one). Advertising Age magazine—itself founded less than three months after the crash of 1929—has a $99 white paper that provides many case studies of companies that have thrived during economic downturns.

In a somewhat related story, I have been putting the final touches on a large research report on the state of the graphic design industry, and we discovered something interesting in looking through various Census Bureau data: graphic design as an industry has never been adversely affected by recessions—at least going back to the 1990–1991 recession. Employment, number of establishments, and most importantly perhaps, the number of freelancers have all tracked upwards as GDP has fallen. Why? It’s a question of historical context.

The last “bad” recession (1990–1991) happened at the same time that the tools for desktop publishing were emerging and/or becoming a mature product category. Aldus PageMaker kickstarted desktop publishing in 1985; QuarkXPress was released in 1987, and Photoshop 1.0 in 1990. (Version 2.0 appeared in 1991.) Adobe Illustrator was first released in 1986 and Illustrator 88 (as in 1988) was a pivotal release. This means that by the time the recession hit during 1990, the “classic” applications for desktop publishing were appearing and starting to become widely adopted. This drove the graphic design industry and created the market for graphic design freelancers by lowering barriers to entry. It also helped the printing industry as well as the fast-growing prepress service bureau market, and had a “trickle-down” effect on vertical markets as desktop publishing made it less expensive to have printed materials produced.

The point is that as we slog through the current recession, we should be aware that any given market or industry has its own dynamics, and is not inextricably tied to macroeconomic trends. That is, we are not the victims of venomous fate. In many ways, the same dynamics are at work today, only instead of “desktop publishing” we can substitute “new media” development. That is, Web 2.0 tools and technologies today are arguably where desktop publishing was in 1990, and are having a similar “trickle-down” effect on vertical markets by making it less expensive to produce marketing materials. Using electronic media helps save costs. After all, one common result of recessions and other economic downturns is an acceleration of the intensity of media shifts. Bad news for printers, but good news for marketers and advertisers.

Yesterday, my colleague Dr. Joe Webb gave his quarterly economic Webinar over at WhatTheyThink—and it drew nearly a thousand attendees from around the graphic arts industry. Dr. Webb provided a state of the industry and the economy as it stands now, as well as a look ahead to what the new year may have in store.

One recurring theme was that companies and individuals should not roll over and play dead, waiting idly by for the economy to improve of its own accord. Probably the biggest piece of advice—and this is true no matter what industry or market you are in—is to take frequent “news holidays.” That is, the news is depressing, and often needlessly so. There is an old phrase in the news business: “if it bleeds, it leads.” And this is true of business and economic reporting, which tends to focus on the bad far more than the good. So while we don’t recommend cutting oneself off entirely from the world at large, turning CNN or MSNBC off for a day or two is a good way to help preserve one’s mental health. Instead, focus on your business, and what it is that you do for your customers. Develop long-term strategies, but keep them flexible enough to adapt to new changes. Also remember that waiting for things to return to “business as usual” is futile at best; there is no such thing as “business as usual” anymore. As the tired, old—but nonetheless accurate—cliché has it, “The only constant is change.” Being adaptable is the best way to thrive.

The publications and brands I mentioned at the start of this post are a case in point. A recession may not appear to be a propitious time to launch anything new, and while there are no doubt many failures for every one of those successes, the point is that there were successes, and some resouding ones, while the failures may have had nothing to do with the economic landscape. (As an example, I helped launch an ill-fated magazine in the middle of the 2001 downturn, and even though it failed, the failure was strictly our own, a failure of proper marketing, and of having a cohesive plan for launching and maintaining it. The publication exploited a hot topic in the graphic arts industry, and aside from our own blunders, should not have failed. But, in the end, we learned from our mistakes.)

As always, smart managers who can build smart, spry companies will be the ones to survive—and thrive—no matter what the macroeconomic landscape may look like.

Posted by Richard Romano on December 11, 2008 | Comments (0)