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Subject: Re: UKNM: Recession will hit in 1999
From: Sajid Mohammed
Date: Wed, 16 Dec 1998 14:51:14 GMT

---Tim Hayward <timhathhcl [dot] com> wrote:
> That's an interesting approach. Experience points to a standard response
> of companies in recession... shed staff.

Depressing, Tim is probably right. However, I was under the impression
that in the last recession ('88 onwards) that companies that did not
cut expenditure on marketing fared much better that those that did. he
general public may reduce their level of purchasing, but there is
still business to be done - surely it's better to maintain your
position and ride out the recession rather than cut out marketing and
lose your position.

IMHO, the people with most to worry about may be traditional
advertising. Companies may elect to shift more expenditure into DM.
There's a general feeling abroad that DM is more cost-effective than
conventional advertising. Much of the advertising seen these days
seems to be more effective as entertainment for the folks at home as
opposed to selling the product.

Worse still, some research indicates that 25% of the ABC1 audience (or
whatever they are called these days) actively go out of their way to
*avoid* advertising. DM on the other hand not only offers a degree of
precision in targeting the audience but is also easier to quantify in
terms of effectiveness.

Can interactive benefit from this? Sure, Freeserve will inevitably
drive down the cost of basic access and hopefully the various telcos
and broadcasters will speed up the penetration of low-cost access
devices such as STBs into the consumer sector.

e-commerce will continue to grow as it's advantages become apparent:
lower overheads passed onto the consumer as cost savings, obtaining
the most competitive price from a variety of suppliers, avoidance of
sales taxes, et cetera. Rather than take the cue from TV advertising
and essentially porting this to the new interactive medium of
DTV/InTV, perhaps we should take DM as a better model.

BTW, I hear that Kwik Save do the best cheap sherry - very
heartwarming stuff by all accounts and very handy for those cold
nights on the Embankment.

Sajid Mohammed
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