Can online marketing escape the recession?
With any economic downturn/credit crunch/recession comes the usual questions at the board rooms of most organisations.
How effective is our marketing?
Could we do without our advertising?
Is our strategy a luxury?
It had been thought that in this current recession, online would escape the questions or criticisms. However as a lot of organisations are facing tougher times, including several high profile victims, online is being asked to be even more accountable than ever. Is that such a bad thing?
Well that depends. If you have all the data to hand and have tried every potential opportunity for your brand, then it can only be a good thing. You should be able to pin-point the exact levers to pull in order to produce the desired results. Unfortunately, very few organisations have or are in that situation.
So what is next?
Well it makes sense if your organisation is able to invest in acquisitional activities it should do so. And if possible increase that investment. Channels that offer high levels of transparency, low costs or better still low risk (CPA or Hybrid deals). Even with these options you still need to understand the customer journey and have an effective method of de-duping (I am amazed at how many organisations still don’t have that cracked). Are these methods recession proof? I’m not entirely convinced. Marketeers experienced in working with Google will have noticed bids and ROI change over the past 9-12 months. Also, Google are experimenting with a number of tools or models to help maintain their revenue. Including dropping their previous stance of no Gambling advertising. It all depends on your sector, Finance in the main is seeing a dramatic fall-off – largely driven by sub-prime advertisers pulling back on their investment. One thing is for sure, Google will probably be making more sales visits than they have in recent years.
What about display?
Display obviously pays a role in most campaign mixes or strategies. However the traditional CPM model is a risky one, unless your brand can afford the luxury of brand advertising or if you aren’t responsible for a transactional website. One point that is neglected or overlooked is the multiplier effect. Most advertisers still look at last click wins. This is why in a number of sectors display loses out. Recent investigations by ComScore in the US indicates a genuine effect on search from display. However is that enough? The main benefit of display in my opinion is that it can not only drive awareness, it can also put more people in your sales funnel. This is something search isn’t particularly good at. Most people in search mode already have an intent, whether latent or active. Would I start to invest millions of my budget in traditional display advertising? In short – No. However, with the market in its current state, new technologies are constantly evolving. With the growing maturity of behavioural and re-targetting technology, an increasing number of media owners are willing to undertake activity on a CPA activity.
Remember, although CPA presents far fewer risks, it sometimes can be more expensive than CPM or CPC and volumes are likely to be lower.