Recession = Online Marketing Opportunity

By Jeff Campbell, VP Product Development

With the IAB’s latest Internet Ad Spend results for Q1 showing $5.8 billion in spend, it doesn’t look like business is pulling back online, yet. That said, consumer & corporate purse strings are pulled tight. With the mortgage crisis, gas prices, plant closings, stock market woes, and the Midwest under water, the outlook is grim.

There are two ways to ride out this storm: batten down the hatches and wait it out, or put on your raincoat and head for the eye of the storm. My raincoat is on.

Advertising certainly seems less effective as sales are dropping off, costs of goods are going up, and people are sitting on their wallets. Online, where we love to brag about our accountability and effectiveness versus other marketing tactics, is seeing that website visitors are less likely to purchase on their first website visit and are price hunting more.

The important point is that people are still shopping; you still have website visitors who will always want more than they need (thanks, American society). Heck, some say increased gas prices leads to even more online shoppers. The days of 10:1 ROI and 15%+ website conversion rates are probably over, but, with a shift in strategy, money can be made online. So how can a marketer take advantage of the opportunity?

With high expectations and tight budgets, having a converting website has become a more important investment than blindly shifting excess budgets to PPC and expecting performance like last year or last quarter.

I’m not saying don’t invest in PPC (my baby’s gotta eat), but the instant revenue gratification most marketers have become accustomed to will (needs to) shift to a more strategic, LTV model of positioning, awareness, and user behavior metrics. Don’t get me wrong, the end goal is still conversion, but as with offline, it’s taking a few more visits, discounts, rebates, add-ons, and love to turn that shopper into a buyer.

Online marketing goals are the same: 1) connect potential customers with your content, and 2) ensure that content converts visitors per it’s established goals (sales, lead forms, interaction, download coupon, etc.) in an efficient manner.

If recession history repeats itself, advertising budgets are first to see the guillotine. When your competition stops investing in #1 (SEO, Display, PPC), top placement just got easier to achieve and there is a greater opportunity to capture customers. Seize this opportunity, especially for the long-term strategy of SEO. History is a ranking factor for both SEO and Paid Search; if you bail, it will be harder to come back.

Now to goal #2 – getting visitors to convert is harder than ever under these conditions. As I described in my third industry prediction for 2008, it’s time to turn to the website itself for ROI efficiency. In the ‘golden years’, optimizing media placements could generate a nice 1-2% lift in CVR (typically sacrificing volume at the same time), which is no longer going to meet goals.

Knowing the e-commerce industry average CVR hovers in the ~2% range, is it really acceptable that 98% of website traffic leaves without goal completion? It’s especially astonishing when looking at CVR’s at the keyword level when that keyword describes your product/service exactly. Invest in your website to better convert hand-raisers. Customize the experience based on what you know about the visitor, especially upon return visits. Optimize your content to turn shoppers into buyers.

Not everyone can continue spending under dire economic conditions, so prioritize your moves. When the going gets tough, here is a conservative approach to stay in the game and not hinder your long term online strategy:

  1. First, test alternative website designs and make data-led decisions to improve conversion rates for current traffic
  2. Next, position your website for “free” traffic via natural rankings with good SEO practices
  3. Finally, buy traffic via paid search to supplement natural traffic


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