As the camera pans out of a sparsely stocked grocery store isle, Allstate spokesman Dennis Haysbert tells the viewer “if this isn’t a recession, it sure feels like one.” The statement, delivered in Haysbert’s deceptively calm, soft timbered tone, is highly controversial in the realm of advertising. When it crossed the line into negative, fear-based advertising by directly referring to the tough economic environment facing consumers, it revealed a crack in the Hippocratic Oath of marketing executives: never, ever use bad news to sell a product.

But why not use the recession to brand a product? Is it so outlandish that a company, like its customers, is experiencing and reacting to the tough economic landscape? I wondered why more consumer brands haven’t joined Allstate’s conga line and tuned their messages towards the imminent economic slowdown.

The answer, according to the father of advertising David Ogilvy, is that the wrong advertising can hurt sales. In his book, Ogilvy On Advertising, the maestro tells how the head of Ford’s marketing research “inserted advertisement in every other copy of the Reader’s Digest. At the end of the year, the people who had not been exposed to advertising had bought more Fords.” The anecdote illustrates that advertising can do harm as well as good. How do you know what kind of advertising will do harm? You test. You draw from experience. And you avoid trying a totally new, wild-eyed idea until someone else proves it works. That’s why Allstate finds itself alone in using the word ‘recession’ in its ads.

Yes, it was a risky move, says Dr. Manoj Thomas, an assistant professor of marketing at the Johnson Graduate School of Management at Cornell University, because identifying with the recession can cheapen a firm’s image. Brands like Allstate are built around quality and prestige and stand to damage their brand value with advertising that shifts their positioning closer to the discount products in the same category. A more down-market or discount insurer like “Geico might be better off talking about the recession because that’s consistent with their overall positioning,” he said.

Even Haysbert’s conversational tone does little to mask the sobriety of the message. The adverse stimulus of the negative message at the start shocks the audience into a state of moderate arousal – the optimal state for memory function, said Dr. Samuel Bradley, assistant professor of advertising at Texas Tech University, who runs a psychophysiology research lab. But being remembered in a negative light damages the brand, and does not translate into good sales.

Bradley’s research, which focuses on political advertising, shows that the negative campaigns correlate with low voter turnout. A similar reaction can happen when advertisers use negative stimuli to plug a product – customers remember the ad, but feel repelled by the brand. Bradley says insurance companies already walk a dangerous line, because their products are intrinsically associated with bad things like fires, floods and car accidents. By adding the recession to their advertising mix, Allstate is pouring fuel on the fire.

Another risk lies in focusing customers’ attention solely on price, and leaving out of discussion all the dimensions of brand identity that made the product a commercial success. For example, Kellogg’s recently launched a value-centered campaign that portrays a sequence of idyllic family breakfast scenes in which the voice-over says “the best start of your day” or “the best wake up call,” lines that reinforce the company’s image as a beloved quality product. The commercial does not mention the economy, the recession, or even how much a box of cereal might cost. The only reference to money comes when a child’s hands holding two quarters come into view and the voice says “all this for less than 50 cents a day, including milk.”

“What Kellogg’s is trying to do is communicate that their brand is not expensive, so that it doesn’t get dropped out of the weekly grocery basket,” Thomas said. At the same time, Kellogg’s doesn’t want to damage its brand value with discounts or sale offers, despite the fact that lower prices might actually help the its customers. Kellogg’s has to walk a fine line when it distracts the consumer’s attention from the idea that Kellogg’s products are better quality, better tasting, better for your family. “If you push people over that edge where their cereal purchase becomes about price, then it’s always going to be about price and it won’t matter if it’s Kellogg’s or some store brand,” said Bradley. After all, few have stopped to consider how much an individual bowl of cornflakes might cost, and what if consumers decide that 50 cents is actually expensive? In a category like cornflakes, where buyers would struggle to differentiate between brands in blind taste tests, there is an added danger to price advertising. “Once a product category is pushed to a commodity, you can’t ever bring it back,” Bradley said. “When you go negative, you’re risking long term damage for short term gain.”

Part of Kellogg’s faux pas also lies in being too direct. Branding can be as explicit as juxtaposing two concepts to establish a relationship. Fast food chain Denny’s did exactly this in their ads for Denny’s bailout – which plugs the chain’s breakfast deals. ”It’s one thing to bail out Wall Street, but who’s going to bail you out? Denny’s!” The commercial unites the negative concept of the bailout with the positive image of the brand to give the breakfast deal a current affairs relevance. But truly exceptional marketing is subtle, helping consumers make an elegant conceptual leap from concept to product, establishing a lasting relationship between the two that holds fast in the buyer’s mind and builds a complex image of the brand. In Allstate’s case, the recession is a key current affairs issue that grabs people’s attention and highlights that consumer cost cutting shouldn’t extend to car insurance because it can endanger their well being. The message links these concepts and the Allstate brand in viewers’ minds, forming a memorable relationship between the two, and imbuing the brand with associations of protection.

Kellogg’s could learn a lot from the nuanced approach taken by Kraft Cheese Singles, which avoided slapping a specific price on a cheese sandwich. Instead, the new ads point out that while food prices go up, a filling cheese melt still costs mere “pocket change” as images of cheese circles stamped with quarters fall down the screen. The subtle suggestion hints at concepts like saving money, and getting value and quality, but doesn’t beat the audience over the head with it.

But perhaps explicit is what consumers are after. We are heading into a period unlike any other, as the economic meltdown penetrates the popular zeitgeist with around 60% of 1,000 Americans polled by CNN/Opinion Research Corp saying they anticipate an economic depression. Maybe now is the time for advertisers to suggest we’re all in this together, and, yes, they feel your pain. In fact, to be too optimistic and over the top happy go lucky may actually annoy your customers by insulting their intelligence. “Even the prestige brands have to be sensitive to the fact that the economic environment has changed, and therefore they have to respond,” Thomas said. So maybe Allstate jumped out ahead of the pack with the r-word, and now we’ll see how many others join in. “I don’t think any advertiser would ever be advised to make a negative appeal,” Bradley said, “unless it’s better than the alternative, and in this case the alternative may be losing customers.”

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