The headlines already say more than enough: “Bush to U.N.: We Will Not Wait.” “Powell: Iraq Hiding Weapons, Aiding Terrorists.” War with Iraq is inevitable. Consumer confidence stands at a nine-year low. The stock market has been in the doldrums because of the uncertainty. Business executives are freezing new spending and hiring, though the unemployment rate actually dropped as employers added 143,000 jobs to their payrolls last month.
The U.S. Postal Service reported modest increases in Standard mail since September, but officials now say they’re expecting no growth for the rest of this fiscal year. Yes, that anticipated rebound is slipping further and further away. So, what to do? Direct marketers are looking to the past to gauge what to expect for the coming months. Among the expectations: depressed response rates because of distracted consumers. Complicating matters is that “marketers have been in such retention overdrive for nearly two years now,” NetCreations’ Michael Mayor tells us, “and you can only go back to the well so many times.” However, some expect another burst in e-commerce growth thanks to people cocooning at home. If fears of possible Iraqi or terrorist retaliation rise, some of the foot traffic in bricks-and-mortar stores will move online.
A war with Iraq could even help the economy out of its funk, several experts say, if everything goes quickly and casualties are low. A few marketers will put a temporary halt on spending, but consumer goods companies and other big marketers may actually increase their advertising budgets to protect market share. The greater threat, however, is a drawn-out ground war with high U.S. casualties and threats of terrorism here at home, causing consumers to travel less, spend more time indoors and stop making major purchases to reduce their debt.
For nonprofits, it’s a tricky situation, too: 2002 was an extremely tough year, complicated by the economy as well as waning consumer trust, war anxieties and donor fatigue after the outpouring of money for 9/11 relief. With a war on the horizon, charities must worry about the message they send. Best advice from the Direct Marketing Association of Washington, which had a forum last week to discuss the issue: If your organization’s cause is relevant to the war, tell your donors. Otherwise, steer clear … but keep mailing.
