With all the craziness that’s going on in the world right now, the only thing that seems certain is an extended period of uncertainty. So, I find myself, a small business owner, a marketer, desperately searching for any knowledge to help my clients and myself try to navigate the next 12 months.
One of my colleagues, Erina, found this great article from HBR written around the time of the GFC. A must-read for all marketers out there. The same trends are occurring today:
- Cutbacks on marketing departments and marketing budgets
- A shift in focus away from broad-based media spend
- Large swathes of the population stopping, limiting or postponing their consumption (Shown by similar traffic but much lower conversion rates)
- Search advertising (performance media) getting more expensive while Facebook and YouTube (broad-based media) costs drop through the floor
I’m not a big history buff, but I’m turning to history to help contextualise our present circumstances. I see a lot of creativity and creative production being cut. I see a much larger emphasis being put on search marketing (as it was while I rode out the GFC in another search agency) and direct marketing.
And you know what? Despite being a search guy, I don’t think that’s smart.
At Insight, we only manage a small proportion of Google Ad spend overall, just $1.2M to $1.5M a year. But even in our own accounts, we’ve seen the average cost of traffic increase by 10%. While Facebook is seeing a drop of approx 20% and YouTube going cheaper still.
Having your brand out in the market is always helpful – Sure we can’t always measure it, we can’t always see the direct impact but marketing is a long term investment that should build over time. Cutting everything now cuts that momentum. It puts a stop to all the hard work we’ve put in. And it is agonisingly slow to build up again.
So what Kim? Our budgets have been cut or moved, what do you want us to do?
I believe that now is the time to be brave but also smart.
Tight budgets? Great. Stop advertising to EVERYONE
Now we need to work harder at hitting our target market. If we’re down to our last few dollars, who do we NEED to appear in front of to have a chance of surviving? We could never be all things to all people despite how hard we tried.
Well, time’s up. The rubber is hitting the road and we need results with a smaller budget. How about we spend our precious time and dollars on reaching out to the people that give us the best value.
Positioning is a lost art (particularly in digital)
When we did we become scared to define ourselves clearly – to articulate that we are not all things to all people. To tell the market that our product or service fits into a particular and specific niche.
Our position is even more critical online where ALL our competitors are. It was always pretty important for the smaller businesses but now, even for the big guys, dump trucks of money can not advertise people into submission. At least not for the next 12 months. My advice: Take some time and figure out when people should be choosing you and when they should be choosing someone else.
Performance media increasing in price
Google works based on an auction system. More people advertising, the higher the prices go. And the prices right now are going up as we find budgets in search increasing. Don’t get me wrong, I personally benefit from search marketing. But do I think all remaining budget right now should be invested in search? No! Come on.
Search ads are the bottom of the funnel responding to demand. It’s terrible at creating demand, at showing people something new. Take some of that search budget (yes I’m advising that) and get your creatives to work on something clever or funny or smart. Something for your target market with your brand spanking new position.
Digital channel arbitrage
Remember those falling costs on Facebook and YouTube? Take advantage. Particularly YouTube. NZ has always been far behind when it comes to video advertising and particularly YouTube advertising. Personally, I don’t know anyone that doesn’t fall down a YouTube rabbit hole on a regular basis.
And yet advertising penetration on the platform is inconsequential. That’s why we’re seeing Grammarly Ads over and over and over. There’s no other inventory to show. Get onto these channels, grab the market share now when you’ve got the chance.
Want some stats?
$5,000 of YouTube Ad Spend would equal approx 50,000 views. A view is where people watch 30 seconds or more of the ad. I don’t know any other place where I can get that kind of viewership for that price.
Don’t believe me?
I’m running YouTube on our own marketing campaign and here’s the latest snapshot:
There are over 2k views on our ads currently. Some wonderful people out there voluntarily watched our ads when they could have skipped at 5 seconds. And then a further 17 converted and downloaded our SEO eBook. The conversion rate is terrible but the ads are so cheap that it still makes sense for us to do it.
I don’t know what the future holds. I think all anyone can do is assess the information they have and make the best bet possible. For me, with my clients, with my own agency, I’m advising bravery.
I’m advising us to get out there, spend some decent money on our brilliant creatives and to take advantage of these opportunities. They will not be around forever.
See you out there my friends.