This recession will shake things up for marketers. Now is the time to make changes that are long overdue.
Times are Changing!
Since 1997 we’ve benefited from a lengthy bull market characterized by ongoing growth in sales, profit and budgets. While most marketers are aware they have been under-investing in digital marketing, the impetus to change has been lacking. When things are good it’s easy to maintain the status quo and do what you’ve always done. That time has officially ended.
Experts tell us we are now well into a recession and it may be a long one. The impact on business has already been noticed. While most follow a knee-jerk reaction to cut costs across the board, others are using this downturn as an opportunity to retrench, retool and position themselves to address a shrinking pie by taking a bigger piece. These forward-thinking companies are taking a hard look at where they invest their marketing dollars and what they gain in return.
In this new era of marketing, there is only one true precept: results matter. Some sacred cows like print ads, TV commercials, yellow page promotions and radio spots no longer provider the ROI they used to. And if they don’t provide a sufficient ROI, they need to be cut.
Even within digital there are investment decisions that need to be re-evaluated. Shiny new objects like viral videos, games, and mobile may be cool and trendy, but you can’t take accolades to the bank.
The case for increasing the allocation of budget digital media is compelling. Here are 3 reasons you should increase your investment in online media for 2009:
1. Media consumption and customer behavior. As a close second to TV, the Web now accounts for more than 30% of daily media consumption, with Print and Radio battling for 3rd place in the 10% range. Customer behavior – there are very few product or service categories (B2C or B2B) where buying decisions are not influenced by the Web. As consumers we’ve come to rely on the Web to do product or vendor research, do comparison shopping, view ratings and reviews or otherwise become knowledgeable enough to make a good purchase decision. The web plays a critical role in most customer purchase decisions. This is as close as we can come to the holy grail of delivering the right message to the right customer at the right time
2, Inherent advantages of digital media. These include but are not limited to:
- Affordable: first, online media is much less costly than TV and it is available to companies of all sizes. Where else can small businesses position themselves next to big brands? This is an opportunity for the little guy, and a threat to the giants.
- Actionable: after 10 years of being programmed to “click here” we are not too different than Pavlov’s dogs. If we see something of interest, we click to learn more. This allows all online ads, even those intended to create brand awareness, to have a direct response component.
- Targeted – we can target specific audiences based on demographics, geography, behavior, context or interests. Whether you are buying search, display or email ads you can target to your heart’s content.
- Dynamic: we can change and test all types of creative elements including copy, images, CTAs and the post-click destination of the audience. We can quickly change and test creative in ways no other medium can offer.
- Measurable: by measuring click-through rates, quality of traffic and post-click conversion rates, we can determine what is driving awareness, engagement and transactions. The one element missing in most media overly abundant in digital media. The trick is knowing what to measure.
3. Relative performance – the increasing use of the Web, combined with its inherent advantages discussed above, allow most marketers to see superior results from digital media vs. traditional outlets. Every one of our clients find that the returns from online marketing significantly outperform other channels. If ROI is important to your organization, you can’t afford not to invest in online marketing.
The bottom line is that status quo marketing is no longer acceptable. If brands don’t evolve, they will not succeed. There are too many choices and many smart competitors. Smart marketers, both large and small, national and local, will use this opportunity to re-allocate budgets and position their companies to thrive, not just survive, in a down market.
I believe this recession will create great opportunities for companies that are able to respond accordingly. For those who have been waiting to make the leap from 20th century marketing, this is the time to take action. The difference from recent years is that ROI-based marketing is no longer a dream. It’s a requirement.
If you have thoughts I’d love to hear them!