By all means cut the marketing budget, but not the marketing
00:00 on Mon, 5 Jan 2009 | Industry Comment | 0 Comments
Further Director Steve Jaggard explains why an economic downturn may just help you to focus on what is working for you, and what’s not.
It’s awful out there. Everyone is talking things down, the world has gone mad, we’re all in crisis, Planet Business is threatened with extinction.
So what’s the natural, usual reaction?
To be cautious, batten down the hatches and cut expenditure where you can,. Yes, that rainy day might have just arrived.
Traditional marketeers would probably say that making wholesale cuts to marketing budgets is a massive mistake though. History has told them that those who don’t shout loud in such times suffer in terms of market share when the sun starts to shine again. This ‘you cannot afford not to keep marketing’ mantra I still agree with to a large extent.
However, my new life in the digital, and more specifically ‘search’, marketing arena has put a bit of a different slant on things.
So what’s changed? Well, here’s my new view on life in tough times for what it’s worth.
1.This downturn could actually be a ‘good’ thing for businesses.
2.Organisations do need to keep marketing to retain share of voice.
3.At the same time they need to cut marketing spend
4.But that needn’t mean weakening the effect of their marketing.
Allow me to explain.
Businesses and brands employ a number of methods to promote their products and services, to gain awareness, enquiries and sales. Press, radio, TV, DM, outdoor, email, banners, paid search, natural search – need I go on?
The trouble is that a high proportion of the organisations I come across still do not know the true value of each element of their marketing mix.
Of course, it’s not easy to assess the cost per sale of any brand awareness work – and I’m not decrying its importance having been such an advocate for so many years when running a more traditional marcomms agency. Anyone who says it doesn’t matter any more is in cloud cuckoo land.
But take the ‘response goal’ elements like DM, press, radio, email, banner advertising and search marketing. All can be measured and tracked, we are not in the dark ages any more, the ‘cost per lead ‘ question needs to be posed – and answered- for each of the media utilised.
And there has never been a more appropriate time to do it than NOW!
Now is the time, as budgets become threatened, for organisations to make some big decisions and cut out the high cost per lead activity and replace it with more of the activity that is really performing. The net result being more leads and sales for less overall marketing spend.
There is no excuse for maintaining ‘response-goal’ media if it isn’t working. It is costing the organisation money it cannot afford right now.
I firmly believe that clients who benchmark their relative activity by this means will start to recognise just how valuable, and inexpensive, search marketing, (both natural and paid), can be compared with other media options.
Results we have seen for clients across the board at Further over the past 12 months have proven this to me beyond any doubt . ROI figures from search have continually exceeded those from other media and we are seeing clients actively increasing their search budgets in recent months at a time when cutbacks would have been expected.
They are not spending more money on marketing per se, but simply replacing expensive non-performing media with what they know is delivering for them month on month.
Paid search activity is growing by the day and straight tests we have carried out with clients have shown some impressive results. One client testing PPC against national newspaper direct response ads was able to get cost per lead down to an eighth through search – and has subsequently dropped press in favour of more search.
SEO, by its very nature, can take clients longer to see the real potential, but once they hit the jackpot, the low cost per lead or sale generally continues to drop. The difference between a 1 or 2 ranking and a number 5 ranking is indeed massive in terms of percentage of traffic, so clients outside of the most competitive sectors (finance, travel, property) should be pushing their search agencies hard for top positions. They should not be content with merely first page listings and be pushing their agencies harder as top rankings can be achieved, often on surprisingly small budgets, especially when compared with traditional media costs.
At Further we have clients spending just 3 days a month on SEO who are now dominating their sectors and reaping the rewards both in search engine and referral traffic. All it takes is having faith in the visually intangible marketing tool that is SEO, choosing an agency with the proven credentials and being a little patient. From a standing start, SEO can take a few months of investment, sometimes longer depending on the sector, before starting to provide payback.
A decent search agency will provide all clients with detailed monthly reports featuring rankings movements so there is a means of seeing the progress curve heading in the right direction, even if it’s a small start.
Those that persist with good SEO will succeed as achieving and maintaining natural search rankings guarantees the lion's share of of the traffic available for your search terms.
It is not rocket science, it’s common sense marketing, but often something companies and brands only start considering when times force them to do so.
Once they really analyse and make those decisions, they will find it both enlightening and, most importantly, quite liberating - a fresh approach to the future based on real intelligence rather than guesswork or historical behaviour.
Hence my view that this indeed may be a ‘good’ time for businesses time to take a black and white sense check on their marketing spend.