As 2022 draws to a close, you don’t have to look far to find grim predictions for the year ahead. The current state of the economy may not inspire much confidence but as history has repeatedly proven, it’s those who plan for better days in a downturn fare better in the long run.
Whether your business is already feeling the pinch of rising costs, high inflation or political instability, or you’re simply preparing for what feels inevitable, you’re going to have to make some tough choices when reviewing your expenditure.
Here, we discuss how your marketing budget may be affected, how you can spend more wisely and what you can do to ensure your best chance of long-term success.
The chancellor has confirmed that the UK is in a recession, and that means that people and businesses, generally, are tightening their belts and bracing themselves for a bleak economic outlook.
But rather than viewing this as diminished returns and an opportunity to slash marketing budgets, history shows that it’s actually a vital time for businesses to keep their marketing going – but doing it more wisely.
First of all, most businesses won’t be able to completely rely on their existing customer base to continue generating the same amount of revenue.
It’s tough times for them too, so some customers will cut spending and some may not make it through the recession. This lost revenue will need to be replaced with new customers.
Secondly, it’s long been known – and the recent Covid-19 pandemic proved it to be true once more – that those businesses which continue marketing during the downturn are better positioned and grow faster once the economy improves.
When the hard times end and people and businesses have money to spend again, there will be two types of business: Those who kept their marketing going and are a familiar brand, ready to serve their customers, and those who shut their marketing down and have to re-build marketing momentum from scratch while their competitors are already racing ahead in top gear.
When the going gets tough it’s important not to forget that marketing is an investment, rather than a cost, and it’s what brings in the customers that will keep a business afloat. Therefore completely shutting off – as opposed to reducing – marketing could be a costly mistake.
Not all businesses will be able to keep their marketing at 100% while they fight to survive economic turmoil.
So if your business is forced to make some cuts, make sure that you do so wisely, understanding the role that each channel plays in the overall bigger marketing picture.
For example, digital marketing can be broken down and analysed as discrete activities.
Search engine optimisation (SEO) for example is not the same as pay-per-click (PPC) advertising. SEO is like a flywheel, a longer-term investment, the longer you stick at it, and the more you put into it, the better results you will see, consistently delivering relatively lower cost traffic to your website.
But if a business suddenly stops investing in SEO, those results will begin to diminish. Their valuable Google rankings will start to drop, resulting in a drop in traffic, which inevitably leads to a reduction in orders or sales enquiries. And worse still, their competitors are likely to get the orders/sales enquiries that they could have had.
In a nutshell, for SEO, it’s important to maintain some level of momentum. Indeed, it is often the case that a campaign that stops and starts is far more expensive than one which continues, because it requires repairing the damage done when the campaign was not maintained. – another potentially costly mistake.
From the opposite point of view, this also presents an opportunity. If you notice that your competitors are scaling back on their SEO, then this could give you an ideal opportunity to build on your existing SEO campaigns, and start ranking above them at a time when winning new customers is paramount.
PPC spend, on the other hand, can be increased or decreased at any time and the results are virtually immediate. You can set an advert live in the morning, and be counting the clicks by the afternoon and processing new orders or sales enquiries by the time the day is done.
If you switch off or decrease PPC activity you will naturally see a decline in clicks and orders, but because it’s so easy to switch it back on again, there is less to be lost. This makes it a more economically savvy option when considering a reduction in marketing costs.
Having said this, even with PPC, a complete switch-off could be a costly mistake. It would be much better for a business to analyse each campaign in detail, and rank them by the Return On Ad Spend (ROAS), and pause only those campaigns that are not delivering its financial goals.
Every cloud has a silver lining, they say, and in terms of marketing through a recession it is this: advertising gets cheaper as demand goes down.
This is true in various forms. With many businesses scaling back their advertising, some marketing channels will become more affordable as outlets work to fill their space.
This is commonly found in PPC advertising, too.
This has already begun to happen, with companies who rely on advertising revenue, such as Alphabet, the owner of Google, and Meta, the owner of Facebook and Instagram, reporting that income is falling and predicted to continue doing so.
In turn, the purchasing power of your budget will increase, meaning that you can either reduce spend without reducing visibility, or maintain spend and increase the volume of traffic to your website.
One important aspect of marketing on a budget is to make sure that the money you spend earns maximum returns.
You can monitor this by tapping into the analytics of your campaigns, where you will be able to see which search keywords, which ads and which audience segment accounted for the most profitable sales.
You can then make tweaks, spending more effort to attract the customers that are more likely to buy – and spend less on those who aren’t really making a difference to your bottom line. Use the valuable data available in your analytics to drive better decisions and avoid costly makes.
You can also improve the effectiveness of your campaigns by investing some time and effort in conversion rate optimisation (CRO). This is the process by which you increase the likelihood that a visitor to your website converts into a purchase or a sales enquiry. It can involve improvements to your website’s layout, copy, photography, colours, or streamlining the checkout/enquiries process.
A little bit of investment in CRO and increasing your conversion rate by just a fraction of a percent will go a long way in squeezing the most value out of all your campaigns, whether SEO, PPC, social, email or offline. You can read our guide here.
With over 20 years in business, we at eBusiness UK have experienced the ups and downs of two previous recessions, weathered the uncertainties, and seen and felt our customers’ challenges first hand.
If you would like to discuss your digital marketing in general, or specific outsourcing requirements, then please feel free to contact us for an informal chat.
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