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In this episode of About That, Carl Mayer interviews Corinne Casagrande, SVP, Strategy, Research and Planning at AMS, about the current landscape of consumer spending and how marketers should navigate today’s uncertainties.
Corinne Casagrande is SVP, Strategy, Research & Planning. Corinne leverages her background in business analytics to identify pockets of opportunity, maximizing marketing investment for clients. She brings experience from both creative and performance media agencies, with a background in developing brand strategies, relaunching products, conducting consumer research, and writing integrated marketing plans for brands.
Carl Mayer: Welcome to About That. I’m Carl Mayer. Corinne Casagrande is SVP of Strategy, Planning and Research at AMS. You can read her monthly column in MediaPost where she shares some of her great insights.
We’re lucky enough to have her here today in person. Corinne Casagrande, welcome.
Corinne Casagrande: Thank you so much for having me, Carl.
CM: There is a lot going on out there. Economically, it’s a little scary. Things aren’t looking great. What is happening?
CC: People are worried. The March sentiment numbers looked really bad, and then April came out and it was the lowest that it’s been in 12 years. People feel really bad about the state of the economy, but that doesn’t mean that the economy itself is bad.
The underlying macroeconomics are actually pretty strong. We have wage growth that has kept pace with inflation, which is dropping. We have some really strong historic numbers that look like this economy is OK. How people are feeling about it is totally different.
And we have a trade war that has kind of caused a little bit of a global upending of the economy that is really causing a lot of uncertainty for businesses and people who aren’t sure what to do next.
CM: In the face of that, with reluctant consumers who are maybe holding on to their money, they’re unsure. How do marketers still convert them into sales and go about as usual?
CC: So far in March and April, or at least since the tariffs were announced, a lot of marketers have had success pulling forward demand. There is a natural conclusion that things are going to get more expensive and some marketers have actually taken advantage of that in a form of sales and putting a sense of urgency into their messaging. That’s worked and a lot of demand has been pulled forward. People are stockpiling a little bit, which is kind of exciting for those marketers who were acted quickly and put those policies in place.
The other thing that we’ve seen through a lot of our downturns and recessions is a stark reminder that advertising is a competitive category and we are still concerned with things like share a voice. So if your competitors aren’t spending and you are, you can think of that as a little bit of a bonus in the salience and the reach that you’re going to get.
Spending when your competitors aren’t is another great strategy. Even though it might not feel good to be pouring in money into the market that you’re not sure what’s going to happen to it. But historically, in the long run, we’ve seen that come out to be effective for marketers.
CM: Another area of the economy that’s affected by perception, where perception becomes reality is the stock market. It’s really done a number on 401K’s, retirement plans, that’s a big deal to baby boomers. The youngest of them, I think, are in their early 60s. How does that change retirement plans or people who are retired, how that retirement looks?
CC: Yeah, marketers really care about baby boomers because on an average, they’re the ones holding all the purse strings.
Baby boomers themselves account for more than 50% of discretionary spending in the U.S. I mean, that’s kind of remarkable when you think they’re about 20% of the population. And that unevenness really applies to marketers, because the people who have a lot of money to spend buy the stuff.
As simple as that may sound, Marketers care about baby boomers because they’re the ones buying stuff. And we also care about the top 10% who are also in the stock market. The top 10% of consumers account for more than 50% of discretionary spending or actually all spending in the economy.
These groups alone, and how they feel, and how rich they feel, can actually be the tipping point to put us into recession or not recession. It really matters for the first time if their stock portfolio makes them feel like they need to be more conservative with their discretionary spends.
That really effects marketers for sure, because we’re really pointed at discretionary categories. Stuff that you know it’s not utilities, it’s not stuff that you absolutely need, stuff we’re convincing you to part with your dollars for. It certainly matters for the economy as a whole, because if sentiment were to get so bad in these two groups, that could really tip us into a bad economic situation.
CM: I don’t want to end it on bad economic situation. To close things out, what’s something positive? What’s something good on the horizon, a positive indicator that you’re seeing?
CC: Yeah, I think the most heartening number is the unemployment number. It’s at historic lows still. Everybody has a job here. We’re in bustling New York City and recessions really happen when that starts to change.
Now, that doesn’t change for a while. First, right now where we’re at, businesses are kind of in a wait and see pattern. They’re holding and they’re maybe keeping some jobs open. But the next thing that happens typically in a pullback is businesses start to pull back on forward investments. They don’t buy that new machine. They don’t look at that new lease. And then the absolute last thing that tends to happen in the business is a downsizing and the job cuts.
That is the trigger. That’s when people default on their mortgages. That’s when people can’t afford their bills. But we are so far away from that right now and we don’t have any signs that that is happening right now.
The other good news is that because of all this demand and noise about tariffs, most businesses have stocked up. They’ve also pulled forward their investment as we saw in Q1 with the GDP collapsing, that was due to the increase in imports because people just rush to get stuff in before the tariffs as fast as they could.
The great news is we can all play with as many dolls as we want until probably the end of summer before anything’s affected. If the tariffs even go into place.
CM: That is positive enough. That counts. I’ll take it. Thank you so much, Corinne, for being here today.
Corinne Casagrande, SVP of strategy, planning and research at AMS. You can read her monthly column in MediaPost.
We’ll see you next time on About That.