It's 3 a.m. and you're jonesing for two tons of reinforced steel girders. What do you do? Well, thanks to the ingenious marketing folk at MetalService, you're in luck. I was driving home from work last week when I heard their radio spot.
"Do you need metal? MetalService has more than 120,000 tons of metal for all your metal needs. MetalService. Open round the clock. MetalService. Russia's largest metal stockyard." (Eddie van Halen-ish guitar solo follows.)
I immediately thought of an old SCTV sketch, where Eugene Levy acting as Phil the Garment King, was doing a schmaltzy low-end commercial for Phil's Nails, urging the audience that he's "putting nails in his (own) coffin with this sale." The only difference was that MetalService weren't being ironic.
Not too long ago, there was an outdoor campaign by a cement supplier. The company plastered the city with billboards offering good quality cement, anytime. In fact, they even opened a 24-hour hotline to satisfy any immediate needs. Now granted, a city like Moscow and its reputed nefarious biznesmen just might have use for cement in the middle of the night, but it really made me think about the motives for this.
Advertising common sense tells you that industrial goods aren't typically promoted through consumer channels such as billboards. There are of course exceptions. If a construction material supplier was involved in a large tender, and he wanted to get the attention of the decision makers, they might stick a few billboards near to their offices. However, these current ads in Moscow aren't targeted at all. They're across the city, on the radio, offering manned, round-the-clock hotlines, trying to garner any sort of interest in their wares.
Initially, my thought was that someone at the cement and steel companies finally figured out how to get advertising and media-buy kickbacks. But then another thought occurred. So why are all these construction suppliers so desperate to unload their goods that they're doing it by any means necessary? My only guess here is that the construction boom is finally slowing down.
Last year, our agency started fielding more and more calls from business centers and office parks looking for agency help in order to rent out space. Construction on many of these sites began 3-5 years ago, with tremendous investment into the commercial real estate sector. The business parks were built without precedent, and certainly without an understanding of who would actually use them. In many ways, it reminded me of the Internet boom, where venture capitalists invested huge sums of cash into Internet traffic acquisition, without actually bothering to think about how to make money from this traffic. I guess they didn't need to as their goal was to either flip the company to some other sucker, or to float the thing.
Once the business centers were finally built, investors quickly realized that there is far less demand than expected. They panicked. They hired marketers. The marketers called the ad agencies.
I believe that we're seeing something very similar with construction material suppliers. With a healthy construction boom for the last several years, many of them likely took long positions on stock, thinking that demand wouldn't run dry any time soon. However, after initial investors weren't able to see expected returns, my bet is that additional site phases and further construction projects were put on hold until some of their investment money is recouped. What does this mean for the suppliers? It means that their warehouses are filled with un-sellable steel and cement. And when you're desperate to sell, you try and sell to anyone willing to buy. Even if it's 3 a.m. in the morning.