As government spending continues to come under scrutiny and the axe begins to fall in the public sector, the ripple effect on consumer confidence is already being seen. In early November, research by Nielsen for the British Retail Consortium found a six per cent increase in people who thought the outlook for their personal finances was “not so good”, and in people who thought job prospects would be “bad”.
As household budgets come under more pressure and consumers become more careful about their spending, businesses will need to apply exactly the same scrutiny.
It was John Wanamaker who famously said some years ago, “Half the money I spend on advertising is wasted; the trouble is I don't know which half”. The great thing about online marketing is that you can find out fairly easily where money is being wasted; the data is available. But how well do we use it?
Most companies will have some kind of web analytics in place – Google Analytics is particularly popular with SMEs because it’s free, yet relatively powerful. Some ecommerce applications such as SellerDeck, from the company I work for, provide deep integrations that can be set up in a few mouse clicks, yet provide a tremendously rich set of data. For example, it’s possible to see how much revenue is generated from individual phrases via search engines.
Often, though, there is a flurry of effort in setting up the analytics; but examination of the data becomes more cursory over time, under pressure from other things. Now is the time to revisit those stats and look in more detail at which investments are generating the best return. Here are a few things that are specifically worth checking.
Do you include tracking codes in every clickable link, whether it be on your website, on social media sites, or in emails or other campaigns?
Do you regularly check the results from each online marketing medium?
Do you have a monthly report on your key stats, and do you study it in depth?
Do you check your website for the worst performing pages? E.g. the top exit pages, the least visited pages, and pages with the shortest average visits.
Do you look at revenues and not just visitor numbers?
Do you have the courage to invest more where you are seeing the best return, as well as cutting activities that don’t justify themselves economically?
The businesses that invest their marketing spend most wisely will gain a significant competitive advantage as economic pressures continue to bite. For some, pruning out ineffective spending could mean the difference between life and death.
With the Conservative Party conference over, thoughts turn to the government spending review and how it will affect business and the economy. Whatever the outcome in the long term, in the short term there is little doubt that businesses will continue to approach both expenditure and debt with caution. So what is the likely impact on marketing?
The first casualty is likely to be external expenditure. Marketing consultancies will find it hard to win business, and increasing pressure will fall on in-house staff as they are expected to make up the difference. Knowledge of new technologies will be at a premium as more companies look to develop and maintain expertise internally. Only last month, the BBC revealed how in-house SEO had helped it to slash its marketing budget. Marketing staff of small companies will be expected to be jacks of all trades, to reduce reliance on expensive external resource.
Expect large, costly projects such as re-branding to be postponed. There will be an emphasis on cutting out unnecessary expenditure. Companies will recycle existing advertising campaigns rather than splash out on new ones. It will never have been more important to know which half of your advertising budget is wasted! Spend will continue moving towards online advertising, simply because results can be tracked accurately and unnecessary costs eliminated.
A word of warning, though. Companies that cut back too far on marketing will lose out long-term, yielding ground to more ambitious competitors who continue to invest and seize the opportunity to gain market share. It was ever thus. Marketing theorists cite the example of Cadbury’s, who continued advertising throughout World War II – even when they didn’t actually have any chocolate to sell – and gained dramatically as a result.
Marketers must accept that it’s a season to cut out the dead wood, and probably some green shoots that haven’t yet been fruitful. But it’s also a season of opportunity. Where one company cuts back, there is the chance for another to step in. In advertising it will be a buyer’s market, with bargains available to the shrewd negotiator. Technologies like social media and mobile are still developing rapidly, with whole new territories opening up for businesses willing to invest early.
Pressures there might be, but possibilities there certainly are too, for companies willing to take the risk and step forward into the breach.