Enter The Snuggie

Did someone say the economy isn’t doing so well?  Despite non-stop news coverage, it is easy to play pretend and assume the economy is just fine.  To the perpetual optimist, it might seem like an anomaly in an otherwise stable system. A sign appeared recently – an undeniable atom bomb to any marketer who was holding on to naivety.  That sign was no less than the Snuggie – the blanket with sleeves.

When the Snuggie showed up with the above 60 second infomercial on high-rated prime-time programming, jaws dropped.  It was the ultimate sign of an economic crisis in the U.S. In relation to how marketing is all connected, this signified a dramatic change in marketing behavior. IMC seeks to understand how marketing works together and is affected by changes in consumer and market behaviors. The following chain of indicators reflects a nationwide crisis on a very significant level.

Last June during the beginning of the 2008-2009 upfront, everything was business as usual.  Television CPM’s were up – and advertisers were shelling out hefty budgets.  A few media companies were even going so far as to hold back some of their upfront inventory in hopes for even higher scatter prices later in the year.  It was a bold move, but why worry?  By the time the upfront closed in August, advertising budgets for most networks met or exceeded expectations.  It wasn’t long before that decision to hold back inventory came back to bite the media companies in a hard way.  The network’s projections of lofty increases in the scatter marketplace turned to begging.  Couldn’t anyone buy up some of that unsold inventory?  Enter the Snuggie.

What about the rest of the advertisers out there – why aren’t they buying?  In February 2009, P&G decided to take nearly all of their available upfront options, despite promises days earlier that budget cuts would not occur.  This pulled millions from the market and started what MediaWeek would call “The Start of the Stampede.” Combine unsold inventory with increased budget cuts, and you have a very nice buyers market.  Enter the Snuggie.

What is really concerning about the Snuggie on primetime was the fact that it was an infomercial.  Previously, major networks like CBS and FOX would have scoffed at the idea of cheapening their image with QVC-type advertisers.  But considering the issues discussed, beggars can’t be choosers.  Desperation leads to difficult decisions – and desperation doesn’t come from a mild economic downturn.  It implies a full blown crisis at hand, something the Snuggie has helped all marketers come to terms with. 

--Guest Contributor: Jeffrey Mulcock, IMC Graduate Student