Should you pull your marketing budget at this time?
What is the best marketing strategy right now?
These are crucial questions that we have been discussing with our clients for many weeks now.
And the honest answer is, nobody knows for sure.
Of course, there are plenty of people who have marketed during a recession before and there are certain lessons to take from that but we are the first generation in recent memory to be dealing with almost a complete global lockdown and the implications of that.
No-one can tell you with 100% certainty what you should be doing…
But you can aim to understand the data you are seeing, learn from past situations that bear some resemblance to our current crisis and constantly re-evaluate your position and be poised to pivot at any moment.
The main thing we are seeing at the moment is crazy cheap advertising costs, we track CPM (cost per 1,000 impressions) for all of our clients and in general, we are seeing lows that we haven’t seen for over 3 years, over 50% down.
Logically that makes sense, eyeballs on social platforms are at a peak and a lot of advertisers ARE pulling their social budgets, meaning there is a lot more supply available.
On top of this, we have seen Click-Through Rates stay relatively level meaning the cost to get a click on your ad is at the lowest rate we have seen in over 2 years.
What Does This Tell Us?
This tells us that now is the perfect time to double down on content, to double down on building relationships with your audience and to double down on GIVING.
Many companies lowered or eradicated their marketing budget during the 2008 recession which affected their ability to match their competitors for up to 5 years after, because good marketing should be an investment, not a cost.
An investment that can still grow your market share, will keep you front of mind of new potential customers and will pay you dividends when the world returns to some form of normalcy.
But what about sales?
Of course, certain industries are hurting a lot more than others, some of our clients are completely shut down and unable to operate, some of them are having their biggest months ever and most lie somewhere in between.
As a whole, we are seeing sales conversion rates about 50% down from what they were a month ago, particularly with higher-priced products. The amount of uncertainty in the air is undoubtedly having an affect on purchase intent and behaviour as panic spreads and no-one truly knows how long this will last or how deep it will reach.
To determine whether you should be pumping more money and effort into performance-based advertising right now will depend on what data you are seeing.
If you are seeing conversion rates considerably down, we would recommend harshly optimising your campaigns, removing all but the highest performing sales campaigns and transitioning more of that budget into giving your audience value, building relationships with them and growing your email lists without necessarily expecting anything in return short term to take advantage of the super low advertising costs.
If you are seeing conversion rates up, well you are one of the lucky ones and you should be seeing great results right now with such a low cost per click.
Double down on increasing sales but be conscious that now is still a time for GIVING.
Whatever situation you are in, the fact that remains constant across our client base is how important it is that you do NOT drop your marketing spend completely.
Doing so will only make your businesses recovery harder and more drawn out when this ends.
And remember, no matter how bleak it may look out there for your business at this time, if you trust in your own grit and determination to pull you through, if you make it your focus to find the silver lining that is definitely in front of you and you make it your mission to deliver great value, great content and build trust within your audience whilst everyone else is cutting back…
You will come out of this in a much stronger position than you went in.