Brands might be being advised to lower their marketing budgets thanks to the impending recession and current cost of living crisis – but we’d recommend that you don’t.
Now, you might expect us to say that, since we’re a performance marketing agency, but because there’s actual evidence to suggest it isn’t a good idea.
The brands that spend through the hard times are the ones that are ready and waiting to capitalise on their long-term efforts once signs of recovery start to appear. In fact, we have first-hand experience of this, having done exactly that for Aria Resorts in the summer of 2020. We sold holidays in a pandemic. It’s not a miracle, it’s just good marketing.
All that being said, there are some other things you’ll should expect while the economy is looking less than rosy…
Competition may drop – but so could your conversions
It’s inevitable that some brands are going to either ignore the advice, or have little other choice than to slash their marketing budgets. That means less competition for you and therefore most likely lower CPCs. Hurrah!
The problem is, depending on your business, your conversion rate may drop too. Your audience’s disposable income is likely to be under more pressure than before, so it’s going to be harder to convince them to part with their hard-earned cash.
Our advice? Make sure you’re using all the tools available to you to keep conversions up. Ad extensions give searchers the full picture before they click, while Dynamic Search Ads will sweep for high-intent searches you could be missing – both of which can make your budget go a little further.
If you’re using smart bidding solutions, why not try using first-party data capture on your website? Doing so means you can create indicators of different user behaviours – and the more variables and segmentation you can provide the machine, the deeper the learnings and more efficient return.
Your messaging will need to be sensitive and reactive
Much like when the pandemic first broke, there’s a lot of uncertainty and fear around at the moment. Bills have rocketed and are expected to do the same again this winter.
Be mindful about the way you’re speaking to prospective customers so you don’t turn them off. You need to be aware of their concerns in order to be sensitive to them, so lead on research and data you already have. In your ads, strongly emphasise benefits, offers, customer service ratings, and so on. These will be key differentiators in buying decisions.
Lead-to-conversion time may increase
With incomes and expenses having to stretch further, that lead time from discovery to conversion may start to increase. Purchases will be more scrutinised.
Keep an eye on Time Lag or Path Metrics reports to spot any shifting trends around this and adjust your conversion windows accordingly to accommodate for a longer first click-to-purchase journey.
Brand awareness will be more important
Often marketers shun brand awareness in favour of lead-generation and sales campaigns, since they affect the bottom line more directly.
It’s time to think of the bigger picture. Stay front of mind, even if people aren’t ready to convert with you yet. Remarketing and brand awareness campaigns will come more to the fore, reminding your audience that you’re there, whenever they’re ready.
To make sure you have good visibility, review your conversion attribution windows, using multi-touch or data-driven attribution models. If you’ve implemented GA4, you’ll be able to review cross-channel data-driven attribution reporting, which will put a spotlight on the upper-funnel marketing activity that’s really pulling its weight in attracting users valuable to your business.
Meaningfully engage with your brand advocates
Many marketers spend so much time trying to attract new customers and leads, they can end up neglecting their repeat customers.
Don’t fall foul of this – after all, they’re already aware of your brand and your products and/or service.
There are opportunities here. If your product is consumable, you can re-engage those who bought that item not so long ago. For example, if a customer bought 60 days worth of Vitamin B supplements, you can retarget them just as their two month’s supply is coming to an end.
Removing some of the friction out of the buying process, or even sweetening the deal by including an exclusive promotion, will greatly aid this process – and if successful, should give you more budget to sink back into your ads.
Now is the time to experiment
Experimentation costs nothing except some time and patience. Try running A/B testing, not only on your ad messaging, but on your site’s calls to action too.
Look to narrow down what your audience finds more compelling. Where tightening the purse strings is going to be a common theme for the foreseeable future, will they react better to the prospect of free shipping, or money off the base product? A free consultation, or a discounted trial period?
These are all things that can be done both manually, or via free-to-use tools such as Google Optimize.
Key takeaways
Few businesses will get away with not noticing any impact on their key metrics, and therefore their marketing strategy.
You should:
- Expect to pivot your strategy a little
- Plan for a drop-off in results
- Use tactics and tools to learn a lot about your audience in this time (first-party data, A/B testing, GA4)
If you need some help navigating the turbulence, our team are on hand. We’ve got a lot of experience guiding brands of all sizes through difficult circumstances. Get in touch today, or have a look at our case studies.
