The Search is On
Ask any long-time market-watchers — people who’ve seen economic conditions rise and fall — and most will give you the same advice during a downturn: Stick to the basics. In the investment community, basics might include: remain liquid, shop for value, invest for the long term, look for undervalued opportunities and diversify. Those same basics are easily applied to online marketing.
The pillar of online marketing is natural search. The better a Web site is optimized, the more likely it is to position well on the search engines. Highly positioned Web sites generate more traffic, and more traffic on a well-functioning Web site leads to more conversions and sales.
Those sites confronting difficult competition for natural search positions can buy their way onto the first search results pages through well-targeted and well-managed paid-search campaigns.
At the height of the post-Sept. 11, 2001, recession, during the worst fallout from the dot-com bust, search marketing took off. Quick-fix search “consultants” and their black-hat techniques quickly were moved to the fringes as groups such as the Search Engine Marketing Professional Organization and professional seminars such as Search Engine Strategies reached the mainstream. The new professional search-marketing firms and organizations worked to establish best practices and a body of research leading to greater acceptance and growth of the field.
The latest economic downturn, in my estimation, offers even greater opportunities for search marketing and the companies that aggressively put it to work. Here’s why:
Consumer behavior during a downturn
Here are a few behaviors we observed during the last economic downturn and why they bode well for search marketing.
1. People tend to stay home. Going out costs money, particularly when gas soars to more than $3 a gallon. At home, people go online — for networking, jobs and amusement. On the entertainment front, a 2007 Pew Internet & American Life Project study on technology and media use found that 57 percent of Internet users had viewed a video online and most had shared what they saw with their friends. One in six Internet users have downloaded and watched TV shows and movies online. The continued growth of broadband penetration will increase the time spent online and the opportunities for creative marketers to be seen.
2. Shoppers search before getting into their cars. Once again, due to the cost in time and gas, plus the increasing need for people to spend less, consumers will do more investigation and shopping online. The number of comparative online shopping sites and their popularity grew significantly in 2007. (In fact, during a recent study of hot holiday products and Web sites, Oneupweb profiled Pronto, a shopping site that saw its traffic rise fivefold for the year.) Consumers will research large purchases before heading to the mall and will more frequently buy online when postage is waived. Cost-conscious buyers will search for e-coupons and peer product reviews before purchasing.
3. Buyers use e-mail and social networking sites to save money. As each monthly bill receives greater scrutiny, expect people to find less expensive, more creative ways to stay in touch online. E-mail and social chat are popular, low-cost alternatives to postage, text messaging and/or expensive cellular phone network minutes.
4. More people get their news online. The Newspaper Association of America reported that total newspaper advertising revenue fell 7.4 percent in the third quarter of 2007, while online revenues rose 21 percent. These data reflect the obvious — printed newspapers are falling in popularity while online news consumption is on the rise. Expect the trend to continue during a recession as household budgets cut their subscription costs by cancelling the papers and going online. And when people get more accustomed to receiving their information online, they search more often.
5. People bundle their communications services. Rather than viewing broadband access as a luxury to be cut during a recession, many consumers are taking advantage of new opportunities to bundle their phone, television and Internet services for a lower net cost. This serves to continue the growth of broadband and its ability to deliver more content faster.
Business behavior during a recession
Consumers aren’t the only ones who behave differently during a recession. Businesses are more cost-conscious — especially those that follow the basics. This behavior will have considerable impact on search marketing.
1. Hold your marketing budget accountable. While budgets are being tightened across the board, the demands on management to account for every dollar spent become greater. Put simply: Businesses no longer can afford investing in media they can’t measure. Online marketing is much more measurable than offline. Marketers not only can view the performance of their ad investments, but they quickly can see the impacts of various creative and placement adjustments on their ROIs.
2. Make your business more flexible. As economic conditions change and competitive opportunities arise, businesses need to be able to react more nimbly than in the past. Whereas a print ad or television commercial might take two to three months from creation to appearance, an online ad, Web site content or video can be turned around in a fraction of the time. Look for businesses to turn to online outlets more often to respond to new market conditions and opportunities.
3. Reduce the cost of doing business. Look for smaller travel budgets and less face-to-face sales contact during a recession, particularly among business-to-business marketers. This could lead to fewer live presentations and more online research and contact. Companies will communicate online in more creative ways while providing better, more measurable online content to prequalify leads. Business flying might decrease, while online commerce should grow.
4. Keep an opportunist’s eye toward market share. During bad economic times, certain businesses will suffer. It’s a time of low-cost acquisitions and mergers where long-established market share is up for grabs. In this environment, companies might use new online outlets to improve their competitive positions. Social media marketing, new advertising outlets and evolving online technologies can level the playing field for smaller competitors that are aggressive during a time of uncertainty.
5. Look for new markets. When local or traditional customers cut back on their purchases, one common and effective strategic response is to explore new markets. Online marketing offers low-cost access to untapped consumer and business segments. Through expanding local and vertical outlets, marketers can increase sales by reaching new customers with their existing products and services. Or they can survey the specific needs of these markets and provide more customized solutions. What used to take years of internal retooling can be accomplished in months online.
6. Embrace new technologies for increased productivity. Broadband penetration continues to grow, appearing in 55 percent to 60 percent of U.S. homes in 2007. Marketers now can get more impact from their media investments by including creative, high-tech ad formats: interactive online audio and video, more Flash presentations, and better-quality images. With faster access and greater fixed- and portable-device memory, users can download video, multimedia presentations, podcasts and longer documents at a faster rate than ever before. Highly creative content can reach more people through social sharing, with little or no additional cost to the advertiser.
Revisiting the basics through search
So, let’s revisit the basics we hear from the financial professionals and see how search marketing stands up against other business investments.
1. Remain liquid. In marketing, this equates to staying flexible as you avoid tying up your resources in something you can’t get in and out of quickly. Search marketing — especially paid search — is pay and measure as you go. Adjustments in creative are inexpensive, fast and easy to make. Overall, the search-marketing ship turns toward opportunities much more nimbly than other traditional vessels.
2. Shop for value. The key to value shopping is comparative statistics. Traditionally, advertising and marketing have been open to extensive budget reductions in a downturn because they could not offer management reliable ROI data. A new machine might come with statistical evidence about lowered operating costs or reduced man hours, while producing and placing a new TV campaign can’t offer equally compelling statistics. Search marketing can, and because of it, online marketing continues to get an increasing share of corporate promotional budgets.
3. Invest for the long term. Increasingly, Web sites and online social sites have become vital parts of creating and maintaining brand identity while building stronger, more personal customer relationships. Search marketing makes brands more visible to selected markets and offers quantifiable evidence missing in traditional offline branding. Through online relationship-building, marketers can personalize search to improve the on-site customer experience, which leads to more conversions and sales.
4. Look for undervalued opportunities. In a business context, such opportunities are sought to increase market share, decrease risk and improve competitive positioning. It can be argued that all online marketing is undervalued given its ROI compared to offline activities. In an economic downturn, where more needs to be done faster with less, increasing search-marketing expenditures relative to the overall marketing budget makes good economic “cents.”
5. Diversify. With its growing household penetration, changing technology, expanding markets and new social media outlets, search marketing offers an incredibly diverse promotional universe for business. By integrating off- and online initiatives, every individual marketing investment builds upon and enhances the next, proving there really is strength in diversity.
Reach Lisa Wehr at email@example.com.