By Elliot Suthers
The defense industry is cyclical. There will be up and down years.
Take the nineties for instance, after the boom (pardon the pun) of the eighties, the moment defense cuts were announced by then Secretary of Defense Cheney, the defense industry thought the sky was falling and began to eat their young (think Boeing’s hostile takeover of McDonnell Douglas or the mid-nineties shotgun marriage of Lockheed and Martin Marietta).
But guess what? The sky didn’t fall, and those who recognized the environment for what it was — a cyclical downturn — and used it to consolidate a market presence, came out of the period much stronger and better positioned.
History repeats itself — never precisely, but pretty close — and that’s where the defense industry sees itself today. The industry is facing drastic domestic budget cuts, but what separates today’s industry from that of 20 years ago is an ability to adapt. And whether that means focusing more on international markets for revenue or diversifying into adjacent sectors at home, it’s our job, as PR professionals, to support these objectives.
All too often we get caught up in the “art” of what we do and forget that our singular purpose is to make our clients/companies more profitable. A perfect example of this is a recent advertising campaign from Northrop Grumman that not only misses its mark completely, but also focuses on themes, such as risk and panic, that are inconsequential to their larger branding efforts. Sure, they look pretty, but if the message is missing, how does one justify the expense? Every day, clients are forcing more from their communications’ budgets because their own budgets are being slashed, and self-indulgent advertising such as this reinforces a stereotype of communications staff being more focused on the medium than the message.
What we’re witnessing today is an industry at a communications crossroads: one option for companies is to decrease their advertising and PR budgets, tighten their belts and react to market realities. The second option, and the road I’m guiding our clients down, is a more proactive, aggressive positioning, capitalizing on the downturn to create a public perception of strength and security in volatile times.
If a company has the wherewithal, periods of industry decline present the perfect opportunity to bolster a communications strategy. It’s not all that different from a trader who buys during a bear market.
Leading this charge, once again, is industry giant Boeing, which is using the current decline to simultaneously consume smaller competitors and to pursue contracts that others may not have the capacity to look at. Perhaps more interesting, however, is that even smaller companies such as the relatively small iRobot are already recognizing that to stay competitive they cannot simply stand back and hope to be noticed for their good work alone.
Advertising sales are down, news is slow, or even worse, generally negative in one way or another, and opportunities abound for a little counter-intuitiveness. In the land of the blind, the man with one eye is king. And that’s all it takes. I’m not suggesting that defense companies rapidly increase their ad spending — although that wouldn’t hurt — but rather simply continue at a normal rate creating positive news and assertively seeking new communications opportunities.
And this doesn’t only apply to the defense industry. During the last economic slump, companies such as Target, Macy’s and even Audi not only managed to stave off significant damage by trimming fat where they could, but also by remembering that there was light at the end of the tunnel. Whereas other companies slashed advertising and PR budgets, they didn’t, and when consumers emerged from the economic rubble they knew exactly where to spend their money.
There’s a lot to be said for counter-cyclical thinking, and it doesn’t work every time. But with that said, a defensive communications posture often only stands to prolong the inevitable.
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Elliott Suthers, a native of Australia, is a VP at Spector & Associates in New York City. He has previously worked in government relations for United Nation’s Development Programme in Washington, D.C, and with the Republican National Committee during the 2008 Presidential campaign. Suthers is at Elliott [at] SpectorPR [dot] com.
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