Saturday, April 23, 2011
By Karl Henkel
The McDonald’s National Hiring Day this week didn’t just add 50,000 new jobs — it also meant hoards of free advertising and publicity for the fast-food giant, which could entice other companies to do the same.
Fellow corporations could conduct mass hirings, which could lead to the light at the end of the tunnel for the slowly recovering economy: a boost in consumer confidence, said John Strelecky, MBA and author.
Though difficult to value the publicity McDonald’s received in the time leading up to the hiring spree, Youngstown State marketing and advertising professor Michael Pontikos said it was easily worth millions of dollars.
“It’s really hard to put a number on the unmeasured advertising, like word-of-mouth,” Pontikos said. “It’s just too hard to gauge where they’re coming from.”
Locally, assigning a value is a bit easier, like when hhgregg, a consumer- electronics store opening in Boardman later this spring, announced it would hire 50 employees. It too received positive mentions from media outlets.
In fact, for a 15-second read on the 11 p.m. newscast at The Vindicator’s reporting partner, 21 WFMJ-TV, hhgregg benefitted locally from $225 of free advertising — just for one mention.
“Any of that kind of publicity, press or top-of-mind awareness is something we consider,” said Jeff Pearson, marketing vice president of hhgregg. “You have that leverage of having this many new employees and this many new mentions of hhgregg.”
And from a business standpoint, Strelecky says large corporations will feel as if they’re innovators, which they think will provide themselves with long-term, widespread consumer respect.
Strelecky compared what McDonald’s has done to John Deere during the Great Depression, when the company extended lines of credit to customers who had fallen on hard times.
“Today, if somebody is looking to buy a tractor,” Strelecky said, “you’ll have grandfathers step in and say ‘John Deere stood behind us; we stand behind John Deere.’
“You’re going to see the same thing with McDonald’s.”
But it’s not just about impacting businesses.
It’s about consumer confidence, which Strelecky said comes with having a job, even at nominal wages, instead of unemployment.
“People get very used to the fact they’re getting a regular check,” Strelecky said. “I’d say within four to six weeks, they’re completely comfortable going out and spending some of that money.”
Consumer confidence is a surefire fix for the economy, according to Youngstown State University economics assistant professor Joe Palardy, who said the confidence depends not only on having a job but having one that allows for disposable income.
He also said consumer confidence — which reached an all-time low in March 2009, but has since slowly increased in the long run — is difficult to predict because of countless variables.
“It’s a broader issue,” he said. “There’s anxiety with politics, the debate on the deficit, rather than just a couple things.”