Havas Media CEO urges governments and brands to use sustainable communication strategies to help boost consumer confidence as top policy makers and CEOs gather in Zurich pre-Davos
(27 January 2009) - As developed countries worry about plunging into deep recession, the primary focus at Davos this year will be on what further measures government leaders and financial regulators can and should take to resuscitate economic growth. Despite the many attempts made so far to jumpstart the global economy - numerous bank bailouts and several record reductions in interest rates, consumer confidence in the developed economies still remains at an all-time low.
Government and business leaders at The Emerging Markets Investors Roundtable in Zurich today, many of whom were on their way to Davos, debated the challenges for global brands in developed economies and the opportunities they present for growth in the emerging markets.
As governments in developed economies continue to focus primarily on macro-economic solutions to generate economic growth, Havas Media’s CEO, Alfonso Rodés, stressed the need for governments and brands to also consider and develop effective communication strategies to help lessen consumer fear and insecurity, boost consumer confidence and foster economic growth.
Alfonso Rodés, CEO of Havas Media comments:
"Consumers are scared, confused and uncertain. During these harsh economic times, the immediate reaction for many brands is to cut advertising spend and to communicate less.
I like to use the analogy of a marriage in crisis. Everyone knows that the trick to a successful marriage is communication. In times of crisis, communication becomes even more crucial. It is the same thing for brands. In times of crisis, it is totally counter-intuitive to stop talking. When things are going wrong, increasing communications and opening up a good dialogue become even more important.”
Rodés is keen to point out though, that it is not enough to just keep talking to consumers. Now more than ever before, governments and brands need to be acutely sensitive to growing sentiments amongst consumers of over-consumerism and their appetite to adopt more responsible consumer practices. Rodés points out that, to stay relevant, governments and brands need to base their communications with savvy consumers around principles of responsible practices, sustainability and social justice.
Rodés continues:
"As the economic downturn persists, consumers will continue to rationalise their needs and their expenditure on goods and services. They will look more to altruism and social justice as they strive to find more meaningful and fulfilled lives. Brands that do not communicate around these more humane and philanthropic principles may suffer."
During a discussion chaired by Havas Media’s CEO in Zurich, audience and panel members discussed the role of governments and brands in the troubled developed and emerging economies. The panel was quick to conclude that policy makers and business leaders in the (still-growing) emerging markets should also take advantage of the branding and communication strategies adopted by their more developed counterparts.
In 2009, growing domestic demand and increased access to consumer credit in the emerging markets is expected to fuel higher consumer spending, create bigger markets and result in a rapidly rising middle class. This middle class will continue to strengthen BRIC countries' position as a major consumer bloc. The figures speak for themselves - by 2025 B6 countries (Brazil, China, India, Mexico, Russia, South Korea) will have more purchasing power than all G6 countries (US, UK, Germany, France, Italy, Japan). China and India alone will account for two thirds of this expansion.
Rodés highlighed that even in the growing BRIC economies, there is increasing consumer expectation towards brands to communicate around social values, particularly in the areas of climate change and sustainability. His comments were supported by Havas Media’s climate change research* with Brazil (58%), Mexico (56%), India (50%) and China (46%) ranked with the highest levels of consumer engagement with regards to the climate change issue. These figures were far ahead of countries such as Germany (15%) and the UK (17%). Furthermore, in the same study, consumers believed that companies and their brands (not governments) should lead the charge in finding a solution to the issue.
Rodés concluded: “It's not just governments who can influence consumer confidence and consumer spending. In the developed and emerging market economies, global marketers also have a huge potential to guide and reassure their consumers amidst the current uncertainty, increase consumer loyalty and stimulate consumer spend, both in short and long term. As the global economic downturn persists, brands that continue to invest in talking to their consumers about issues such as sustainability and climate change - areas that genuinely concern them - will gain a short and long-term competitive edge by building real and lasting relationships that will in turn stimulate demand and greater shareholder value".
Havas Media represents one of the world’s fastest growing media networks and its agencies have grown from 10 markets in 1999 to 101 markets in 2008.
Havas Media services its clients through a portfolio of specialist global networks and agencies. This group is organised to maximise local market dynamics whilst leveraging the extensive global insight and strategic support within Havas Media. The range of companies within Havas Media include: MPG (Havas Media’s global media network), Arena (Havas Media’s network for tailor-made communication services), Havas Digital (Havas Media’s global interactive network) and Havas Sports & Entertainment (Havas Media’s global sports and entertainment communication and brand integration network).
Source: Havas Media
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