Hey, Let’s Clear Some Inventory With an Idiots-Day Sale

There’s a good reason why marketers invoke David Ogilvy’s declaration that the consumer “is not a moron”: It’s hard to sell things to people with whom you have no fellow-feeling. Corporate executives’ esteem for the intelligence of their customers has its ups and downs, though. During the recent boom, CEOs and consumers shared a sense there was no limit to prosperity. Each cohort spent freely—the former for capital equipment, the latter for big houses and upmarket goods. But since the economy slowed, the two groups have diverged. Consumers are still spending freely—witness Commerce Department data showing an uptick in June’s spending. Though rising numbers of people say the economy is heading toward recession, they’re upbeat about their current finances. Last month’s ABCNews/Money Consumer Comfort Index found 66 percent of Americans rating their own finances positively, the highest number since April. Forty-three percent said this is an “excellent or good time to buy the things they want and need”—down from the high of 57 percent set in January 2000, but well above the 15-year average of 38 percent. Corporate leaders, by contrast, are retrenching like mad. An article last month in Newsweek suggested these different outlooks have given us “The Split Personality Economy.” As consumers indulge their “persistent urge to splurge,” executives “are unrelentingly pessimistic and bracing for tougher times”; industrialists are “incredibly pessimistic.” If that’s the way business leaders see the situation, how can they feel about their blithe customers? Makers of big-ticket items must think we’d be morons to buy their wares right now. This can hardly be conducive to renewed growth. These divergent views also make it trickier for ad agencies to serve as intermediaries between clients and consumers. Since consumers are still spending, agencies have a plausible basis on which to urge renewed client spending on ads. But with the clients so morose, such proposals are apt to be dismissed as moronic.