Digital Marketing During a Recession (Should You?)
Is digital marketing during a recession a good strategy?
The corona virus pandemic’s effect on 2020 has made a lot of businesses concerned about prospects for sustained growth and long term performance. This means that maintaining the costs of digital marketing strategies doesn’t really feel like the best option.
At the beginning of June the US National Bureau of Economic Research declared that the US had officially entered an economic recession, marking the end of consistent growth that had been boosting American businesses since all the way back to 2009.
The 2020 pandemic has forced businesses to pause brick-and-mortar operations or to even shutdown for good, all while consumers and shoppers have to adjust buying habits to a new world of social distancing and self-quarantining. Lots of businesses are staring down the barrel of permanent online retail, even as that still feels uncertain.
But if there is a such thing as recession proof marketing, it most likely involves a multi-channel approach that focuses on very new shopping behaviors.
Marketing methods like search engine optimization (SEO), pay-per-click advertising (PPC), and social media marketing can prove to be beneficial.
Why pursue digital marketing during a recession
Recession proof marketing matters now more then ever and instead of bearishly canceling any digital marketing campaigns, businesses would actually benefit from ramping them up instead.
Many businesses react to economic downturns by playing it safe and cutting back on advertising, but most professional business analysts agree this isn’t the best strategy.
Research going back decades indicates that maintaining or increasing an advertising presence pays off better. MarketSense found that businesses which engaged in both long-term branding strategies as well as short-term market sales were able to shake off the recession of the 90s – and McGraw Hill researchers found businesses that increased ad budgets during 1980s recessions grew nearly 4X the rate of those that didn’t
So what about recessions and marketing online?
Keeping your online advertising campaigns up-and-running means that you can keep revenue flowing. During a recession cash is king and being able to supplement business income is critical. One of the main benefits of internet advertising is that it provides companies with a wealth of data that can help them finetune SEO/paid-ad campaigns for better results and refined efficiency. With professional marketing it’s possible to maximize returns and minimize spending in areas that are not effective.
All this means smarter revenue.
Plus search marketing strategies like SEO can let businesses take advantage of greater visibility as competitors are cutting themselves out of search results by stopping campaigns.
Paid media is the same. As competitors pull out of the market, metrics like cost-per-click and cost-per-impression can decrease making traffic more attainable. Finding a balanced campaign can help businesses come out stronger on the other side.
The reality is that search engine marketing takes a long time to succeed in, and good results are hard fought for. But it’s way easier to lose rankings than to get them back. As competitors end their SEO efforts, it gives businesses that stay the course an opportunity to move up the search results page (SERP) and stay there.
How coronavirus has impacted online marketing
In truth, digital marketing is one of the few areas that grows in recessions. Here are the concrete numbers.
In the short-term period of early 2020, Google saw shifts in search habits for quarantine related topics including school related searches, exercise related topics, and of course delivery related keywords. This meant that shopping, groceries, and eCommerce all rocketed in organic traffic growth.
By April, delivery related searches showed an annual growth of more than 7% in the U.S, compared to 2017-2019. In harder hit countries they grew by close to 20%! Searches for “online grocery shopping” and “grocery delivery” have grown by 23% YOY in the United States. Plus opportunity for content marketers and publishers has grown too as people have begun to search more for recipes and cooking guides.
Despite the fact that US retail sales have fallen by 8.1% this year according to the CBRE, Econsultancy claims that total “non-store” (eCommerce) retail sales had exploded by 25% by June! They also mention that grocery store, building, and garden retailer businesses saw a growth of 13% during this same period. These sorts of statistics seem to suggest that although consumers are skittish about spending during the economic downturn, they haven’t stopped spending, and in fact are now just spending differently with a huge increase in eCommerce.
eCommerce has shifted on other platforms as well. For the online retail giant Amazon, net sales grew by 40% YOY in the 2nd quarter. Despite hesitation in Q1, it’s advertising business had grown by 41% as well.
Finally, the same Econsultancy report claims that 96% of US and UK social media users are engaging with social media influencers “more or to the same extent” as before the pandemic. Facebook’s 2nd quarter results still saw an ad revenue increase of 11% despite the shutdown.
Facebook’s daily active users were still an enormous 1.79 billion on average for June of 2020 – an increase of 12% YOY. With an ad platform that extends across to Instagram, Facebook’s ad options are still tempting even during a recession, with a combined CPC cost decrease of 23.6%.
The pandemic fueled recession has been very tough for many businesses that are not able to translate their model to the online world. But the statistics above suggests that consumers are still shopping, even as they’ve continued to shift their shopping habits online.
Likewise, there’s no reason that social media advertising would be hindered by more time at home, instead social media ad networks have grown faster as people instead spend more time interacting with brands online.
Search engine marketing like SEO and PPC
For many businesses, the most attractive forms of recession proof marketing include both SEO and search engine PPC.
Search engine optimization offers companies an opportunity to grow their businesses online naturally, without taking on the large budgets that paid ads require. Search engine optimization isn’t free, but its main costs lie in initially setting up a site for Google/Bing algorithms – after that is on-page adjustments. But SEO famously has the best long-term ROI.
A Search Engine Journal survey found that even in 2018, 48% of businesses claimed that organic search offered the highest ROI. A good long-term investment because it gains more value over time and a well optimized website can sit-pretty in Google search results for a long time, bringing in search traffic revenue for months or years.
This unique benefit is why polling data from Statista has found that SEO is the one type of online marketing with the single best ROI on average – 32% of marketers worldwide claim it consistently offers them the best long-term results, more so than almost any other type of marketing. If done well, SEO pays of in the long run.
SEO in particular is more a measurement of effort than it is funding. This means that businesses that focus on SEO during the recession can have a long-term payoff that extends long after the recession is over. Search marketing provides the opportunity to plant seeds for success in the years following.
SEO keyword research can help businesses obtain page 1 and page 2 rankings that lead to better top-of-the-funnel traffic, which is better for driving conversions at the bottom of the funnel.
This is especially true for necessary items and daily purchases. People don’t stop buying during a recession, but good search marketing can help brands put themselves in front of audiences for things they actually need.
Moz’s Rand Fishkin on search marketing
Here’s some insights from Moz founder and SparkToro co-funder, Rand Fishkin about SEO marketing during times of uncertainty, “if you have ROI-positive channels right now or your clients do, now is an awesome time to potentially be putting some dollars into that.”
Read the summery of his talk above for more details.
“…that is what that research shows, right, that essentially folks who invest in marketing, in sales during a recession tend to outperform and more quickly outperform their competition as markets resume.”– Rand Fishkin
Fishkin’s advice is to increase or maintain search engine marketing efforts in order to prepare for second and third waves of adjustment, and even to prepare for new shopping habits as consumers adjust to online retail during isolation. Marketers will do best when they are prepared for the “new-normal” of internet business.
How to leverage digital-focused recession marketing strategies
One of the most important parts of digital marketing during a recession means being able to adjust to changing audience habits. This means targeting keywords that match your audience’s needs.
Keyword research is already a fundamental part of SEO/search ads, and it’s another reason why SEM can help companies retain business during a recession by better pivoting their content toward specific audiences. A professionally optimized SEO campaign can use tools like Google’s Keyword Planner to target low-competition keywords with regular average traffic. Plus, Keyword Planner can help marketers discover important keyword metrics like competition, and PPC bidding costs.
Next, good content optimization aims to understand searcher intent and to find keywords that can guide searchers to their ultimate goals. SEO tools like Google’s Search Console help marketers understand clicks, impressions, and click-through-rate (CTR) for their main keywords – and to find new keywords as well.
Some keyword research tools are designed to collect queries, questions, and longer phrased based queries that help marketers understand “intent” a lot more easily. Recession proof marketing in SEO should build out content designed for what audiences want, and after that SEO comes naturally.
Another reason that online marketing like SEO is enticing: digital marketing always surges in recessions.
During the 2008-2009 financial crisis, US advertising declined by nearly 18%, but digital advertising (still in its teenage years back then) didn’t drop nearly as much. Businesses preferred the measurability, and hard data that paid ads and search optimization offered.
Better data for more security
One of the key differences for digital marketing – as opposed to other forms of outbound advertising – is that it offers businesses much wealthier data.
Businesses can rely on enterprise level data with reporting tools like Google Analytics to see how visitors are arriving at their site and to track KPIs like form fill outs, time on site, demographic data, conversions, sales/revenue, new users, and a whole lot more.
The Google Ads/Microsoft Advertising campaign platforms and Google’s Search Console provide more granular data to see how different types of search results perform. These give marketers information to fine tune both SEO and PPC strategies. Plus, these allow them to read feedback data to decrease efforts in low-value segments, and increase efforts in high-value segments – increasing efficiency.
Finally, these tools also provide some “forecast” data to marketers better understand short term prospects using past data.
Digital “marketplaces” as a new eCommerce opportunity
Earlier this year Google announced that unpaid organic results would begin appearing in the Google Shopping search results tab. Turns out this timing was good.
The move gave eCommerce marketers a huge new opportunity to push product sales directly in search results and was a big move toward Google’s goal of competing with eCommerce marketplace giants like Amazon.
Coincidentally this move also gave businesses a new opportunity to optimize digital marketing during the recession. Unlike before, Google Shopping organic results don’t have to be part of a paid search ads campaign, meaning that businesses that are shy about funding ads can at least take advantage of a free option. All that’s needed is a Google Merchant Center account and the effort to import product listing details into the Google Shopping ads platform.
Right now, this is the only way that product listings can appear directly in search results.
Amazon has pushed $4 billion in anti-corona virus measures in order to inhibit the recession downturn and to give marketers more confidence. This makes digital marketing on Amazon a good strategy for eCommerce sites since shopping habits on the site have largely stayed the same or even grown – giving it a 24% growth in online sales.
Amazon’s A9 algorithm caters best to products that have more clicks, a higher conversion rate (CR), and products with verified reviews. This means that the ranking algorithm for retailers is largely influenced by businesses that choose to pay their way to the top.
For marketers looking to take advantage of marketplaces like this, both Google and Amazon offer opportunities for Shopping and Sponsored Products that can let retail companies push their products in key segments.
The best option on these platforms is to maintain marketing during the recession in order to retain sales metrics and rankings which are much harder to earn back. To keep performing, don’t lift off the gas.
Don’t stop your paid advertising
Search engine optimization and organic traffic have the advantage of being low cost compared to out-bound marketing efforts.
But companies should not be quick to cut online paid advertising. Modern digital marketing strategies like search ads and paid social media marketing can still help businesses capitalize on their key audiences – even on a flexible budget.
Media consultant Brad Adgate touches on this in his Forbes article where he looks back at the 2009 recession. According to him “the ‘noise level’ in a brand’s product category can drop when competitors cut back on their ad spend.” For this reason, research data from years past always seems to suggest one thing: that maintaining or even increasing advertising efforts is the best way to go.
As shopping and business transactions continue to shift online (especially in the “quarantine” world) it only makes since that paid digital advertising is the new normal.
“Those advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.”– Brad Adgate
For search advertising, panicky competitors mean that competitive industries can actually become much cheaper to advertise in. WordStream found that despite conversion rates falling a good amount, many retailers have discovered that cost-per-click (CPC) has also decreased by 9% for retail advertising. Taking advantage of this is a good way of getting fast cash during a downturn.
Adthena’s VP of marketing suggests that c-level executives can find a lot of stability in paid search advertising. In fact, this style of advertising is an ideal recession marketing strategy in that it offers a lot of data that gives long-term hope.
“Search intelligence offers not only remarkable clarity but also a real-time lens into market movements, trends, and opportunities across verticals and in close to real-time.”
Ad platforms are working hard to help companies realize this. Google has made moves to discourage businesses from reducing ads spend by offering small and medium sized businesses free ads credit.
These free ad credits mean that SMB businesses could more easily maintain their existing campaigns with one of the most reliable forms of digital advertising there is. Google’s credits added up to a total of $340 million in ad money for existing platform users. These credits are only available to existing advertisers, but they give some incentive to not bail out on paid ads.
Digital media advertising offers reliable ROI
Established digital marketing strategies are appealing for other reasons as well. They have well established ROI.
Paid search ads (like traditional PPC search engine ads) are one of the most popular forms of digital advertising there is, with 23% of global marketers claiming that this strategy offers them the highest ROI.
Social media ads are even better with 30% of responders claiming they get the most out of out-bound advertising across social media apps and sites. This means that PPC advertising is well ahead of many other forms of marketing, and it’s why search ad platforms like Google have famously claimed that businesses can average $2 revenue for every $1 spent.
Marketers rank social among their top strategies as well, with nearly 20% saying it offers them the highest return. Since social isn’t affected as strongly by social distancing it looks like a good, strong recession proof marketing opportunity.
This good ROI is why paid should be a business’s top priority for digital marketing during a recession. It also comes from paid marketing’s main strength: data. Data helps professional marketers fine tune their campaign, make corrections and target only the best audiences.
Ad platforms across Google, Bing, Facebook, LinkedIn, Amazon, and more get their effectiveness from rich data sources that help marketers create ultra-optimized campaigns. This includes information on valuable keywords, search sessions, location, demographics data, interests, employment, gender, etc. – all making digital advertising far more effective during a recession than traditional marketing strategies.
Contact us to learn more about these valuable digital marketing channels. Our team can help you layout a path for strong SEM marketing and a paid media marketing strategy that’s designed to help your business grow.