The credit crunch is hitting just about every business!
March News Letter
The credit crunch is hitting just about every business, small or large, however, it is the smaller companies that are usually at most risk.
It is common practice for businesses to re-evaluate their expenses when times are tough, and this often includes marketing budgets. Indeed, recently many people have reported decreases in offline (print) marketing budgets, due, mainly to the credit crunch and financial turmoil that both the US and UK are experiencing.
It is interesting to note however that conversely, Online advertising spend is on the increase.
Why is this? What is the difference between online and offline expenditure, and why should one be on the decline due to a credit crunch, while the other is increasing?
The most rational and likely explanation for this is the huge difference between instant Return On Investment. Whilst print advertising can be a great way of developing brand name and awareness, the financial returns for every £ or $ spent are known slow to arrive. This means that, during times of prosperity funds are freely available for Print based advertising.
Online advertising tends to see a much quicker and higher ROI, with either instant or swift results.
Advertising Budget, or Cost of Sale?
Some companies have even been quoted as saying that, although they are reviewing their Offline advertising, with a view to cutting costs, they now consider Online promotion to be more of a ‘cost of sale’ than an actual advertising cost.
It is easy to see why…
In a survey by iProspect, 68% of internet searches don’t look further than the first page of Google for products or services they are looking for. This means that if you don’t appear on the first page, you are missing out on a seriously high percentage of your would be revenue.
This means that funds spent increasing a websites online search rankings are more or less guaranteed to increase the levels of sales that the website realises. This does imply that Online web promotion should be seen as more of a Cost of Sale than a straight advertising cost.
During financial hardships, it makes sense for businesses to cut advertising costs, so long as they can still achieve a level of income to keep them afloat. Thus, cutting funds from Offline advertising, which may well be seen as a brand awareness raiser that can presently be ill afforded, and allocating those funds to Online web promotion, which tends to give a much quicker return, is, perhaps good business sense.
One person we spoke to stated that they feel someone that is actually searching for a product on the internet is much more likely to convert to a sale, than someone that merely sees a company’s advert in a related magazine.
Forms of Online Marketing
Just like the offline advertising world, Online marketing has many sub divisions. The most popular are:
Pay Per Click campaigns (such as Google Adwords),
Search Engine Optimisation,
Which is the most effective?
To a large extent, this depends on what you are trying to marker online, and how long term your goals are.
Let’s look at each Online marketing sub group in turn;
Pay Per Click.
The most popular pay per click advertising network in the world is Google Adwords. The effectiveness of this online advertising medium is definitely a proven fact. However, if you do not take care, you can easily waste thousands of pounds running an ill planned campaign, and be left wondering where it all went wrong!
Pay Per Click advertising is often said to be best served to websites that sell ‘impluse buy’ type products. PPC tends to give a very quick Return, but in the long term is more costly and gives less of an ROI than a traditionally, organic SEO campaign.
Most marketing professionals have at least heard of the term ‘advert blindness’. This phrase has been traditionally used to describe the mental process of the ‘filtering out’ of adverts by magazine readers. It is more and more frequently used in the Online advertising world in regards to banner adverts.
Basically, most people ignore banner adverts these days without even thinking about it. This means even if you get a good deal on your banner advert campaign, the results can be poor.
Search Engine Optimisation
Search Engine Optimisation (A.K.A. SEO) is a huge area, viewed by many traditional businesses as murky waters. Many are confused by the terms used by SEO professionals, and unsure whether funds set aside for this will be recouped.
If the right Ethical SEO specialist is chosen, however, the results can be astounding, and the Return On Investment excellent. It is important to stress the word Ethical here, as some SEO consultants are far from ethical. Go with a company that is willing to take the time to understand your needs as a company (or individual) and won’t simply apply a ‘one size fits all’ type of affair to your SEO.
The returns for an SEO campaign are usually realised after 2 to 3 months, at which point your website should be experiencing not just an increased number of visits, but an increased number of ‘targeted’ visits. It is this targeting that is important. There is little to no point having your website ranked for terms that are not related to your website, or do not have a medium to high number of searches per month.
Used correctly, search engine optimisation techniques will give you a good ROI compared to PPC advertising, as your website will be placed in front of the eyes of those actually searching for your products or services.