What Smart Advertisers Will Do In The Recession

The recession is a phenomena that all the corporations have jumped on particularly in the online marketing space to serve their own agendas. Controversial? Well, all I am saying is be careful when the big ad agency tells you that the only solution to falling sales is to double your marketing efforts with them. I have heard this too often in the past few weeks not to blog about it. You might not need to spend more than you’re spending now, you might be able to spend less, you just might need to be cleverer than you were about how you spend it.

It’s probably true that your company is not going to grow so much this year, that your budgets will be examined more closely and that “belt tightening” will happen across every industry.

I don’t think that’s a bad thing. In fact I think the timing of this recession one of the best things to happen to the Sales/Marketing & Analytics industry.

For too long companies have been spending vast budgets on advertising campaigns that were measured poorly at best. The folks in charge of those budgets will have to change or they will become victims of the recession. Given that I’m a consultant that has in the past relied on a healthy economy you may think I am insane to think that the timing of this recession is a good thing.

einstein insanity in marketing

Albert Einstein defined insanity as;
Doing the same thing over and over again and expecting a different result

If advertisers continue to spend money as they have been in the past they will fail and become victims of the recession. This is insane.

If they spend more money online as some are suggesting in order to get more eyeballs to their products and services they may fail even more spectacularly. If you just allocate budget to online more than you did in the past because everyone says it’s a good idea all you’re doing is following the herd. In reality you’re not doing anything different. Insanity again comes to mind.

What I am warning against is not to listen to a lot of the hype and simply allocate more money online to get more eyeballs.

What you as an advertiser should be wary of is, are we (as the marketing industry), living in an echo chamber? Are we building buzz that people should be spending more online because it’s in our interests? I recently read an article on ClickZ by Harry Gold where every single one of the cited sources in the article, has a vested interest in you as an advertiser spending more online. Call me a cynic but let’s look at the companies that Harry references in his article.

  • B2B Online is a company dedicated to the discussion of online marketing in the business to business services market and sells magazines about how B2B companies should market online.
  • eMarketer – Another online marketing research group. Again it’s in their interests to see the marketing budgets grow because companies will need research and statistics about what works and what doesn’t.
  • Forrester – See eMarketer.
  • MediaPost & The New York Times depend massively on online advertising as revenue sources.
  • The Kelsey group provides research & analysis around yellow pages (print), electronic directories (online) and local media – in other words advertising consultants.

Now I am not doubting that they did these studies, nor am I doubting the results. I am not even saying that Harry Gold is wrong to be optimistic based on what he’s seen and cited. I am saying that it’s in their interests to spin optimism just like it’s in the interests of direct marketers, TV & cable companies, and telesales companies, to spin the same kind of optimism.

If you believe everything you read then it is still fine to spend advertising money everywhere except on newspaper advertising which everyone seems to agree is doomed. I don’t agree entirely with that either for reasons that will become clearer later in this post. There is still room for print, just not in the same levels as 20 years ago.

The question you as an advertiser should be asking and what some of my smarter clients have been asking is;

Where is my advertising effective and why?

To me as a consultant in the analytics industry this is the biggest opportunity we have to show our value.

The clients I am working with are asking smarter questions now. Questions like “can you tell us how to measure what works in both on and offline advertising? Can you tell us if it’s worth using print or TV or should we just spend on Google? Is direct marketing or telesales worth the effort?” The media attribution question has never been more important than it is now.

The Media Attribution Question

An example of attribution in online marketing is when we’re talking about conversion or engagement as a measure of success that search engine marketing is much more effective than banner advertising. They point out that costs per click are much lower, that cost per acquisition is much lower, that click through and conversion rates are much higher and that visibility in Google is far more important than paying a fortune to get on CNN.com.

In many cases speaking from experience this is very true. However in most cases Search Engine marketing relies on the fact that the product or service category is already known to the potential marketplace. The attrition question is when does the banner on CNN lead to a search that results in a sale? Or TV or Print for that matter because as much as we love online most life happens in the real world!

The answer lies in the fact that search is a different type of media to display advertising and as different mediums should be measured differently.

The 3 types of Media

There are in my view only 3 categories of media upon which you may advertise today and they are attention media, intention media and social media.

Where do you attribute conversion?

Where do you attribute conversion?

  • Attention media
    Attention media is designed to attract the attention of the audience. It is not designed to sell the prospect immediately rather it is used to generate awareness of a particular product, service usually via a campaign of some nature. Typical examples include TV advertising, Newspaper print ads, email or direct mail awareness mailshots, visual display ads such as online video ads or banner ads on popular media websites.
  • Intention media
    Intention media is designed to be utilized after the attention has been raised. It is designed to react to a specific need that has already been generated by awareness marketing. Typical examples of this kind of media is keyword marketing (SEO/SEM) when a prospect enters a keyword about an item or service they already know about through either social media or other ads designed to attract attention. Direct marketing (catalogs) is another form of intention media as are email campaigns around already known services and products.
  • Social media
    Social media is a specific kind of media utilized after the attention has been raised. It is usually virally spread via word of mouth via various on or offline channels. Typical example of a product based social media campaign is a Facebook application spread virally for commercial advertising purposes.

Conversion or engagement attribution (depending on the goals and KPIs of your campaigns – you do have goals and KPIs don’t you?) depends greatly on the lifecycle of the product or service and how you’re running your campaign. It’s rare that one doesn’t effect the other in some way. Attention media should start first followed by intention media. Social media is special because it can be either attention grabbing advertising (the viral release of a new facebook app designed to direct you to a campaign website) or could be instill conversions due to viral word of mouth (facebook friends talking about a new service).

To give you an example of what I mean the following graph shows a mid life cycle service that had an increase in searches directly attributable to a banner campaign. There is also an awareness lift which has been generated as you can see in a percentage lift in the searches after the campaign.

Keyword lift (red) due to banners

Keyword lift (red) due to banners

The banner campaign ran for this 10 day period where you can see a directly attributable lift in keyword searches. What’s also very important is that over time you can calculate the lift in awareness generated by calculating the amount of extra searches made (per month over the product lifecycle for instance). That’s in addition to the clicks that the banner campaign brought in over the given period.

Smart use of this knowledge

The smart advertisers will therefore start measuring this and start designing their campaigns around this kind of model. The key to success might be using Attention media to drive awareness and design display ads that are easily remembered (on search engines for instance). For instance you could do something like the Adidas campaign which has a subject that is easily remembered (Impossible is nothing). You would then make sure you understand the relation between the attention driving activities (the display ads, video ads, TV & print launch dates) and the lift in searches or direct accesses to websites which come as a result.

This is the branding effect that can be measured by the analytics tools. By using a great slogan you can see directly attributable lift and therefore understand what really worked, the TV ad or the search engine.

By logging the results of campaigns over time you can start to truly measure return on advertising spend as well as measure your branding efforts. Web Analytics and advertising auditing can help you to do this. Once you can determine when and where to use attention media, intention media and maximize the results of the advertising you’re doing then you can tell your media agency what you want, not be forced to be spoon fed the lines by big agencies intent on spending your budgets to earn their commissions.

This should of course be the second part of your strategy. The first part is preparing your campaign or website so that it is maximized for conversion. That way the traffic that does see your content buys into it and you get more value for your money.

Agree? Disagree? Comments most welcome.

Steve is a well known analytics specialist, author and speaker. A pioneer since 2002, he established one of the first European web analytics consultancies (Aboavista), later acquired by Satama (now Trainers’ House) in 2006. In 2008 he wrote his first book Cult Of Analytics published on May 14th 2009. He currently serves as CEO at Quru and has presented and keynoted web analytics topics across Europe. These include The Internet Marketing Conference (Stockholm), The Search Engine strategies (Stockholm), IIH (Copenhagen), the IAB Finland (Helsinki), Media Plaza (Amsterdam), Design For Conversion (Amsterdam) The eMetrics Summit (London, Munich, Stockholm), Divia (Helsinki) in addition to sitting on dozens of panels.

Posted in Conversion, General, Metrics/measurement, Mobile Web 3.0, PPC/SEM, SEO, Usablity/Design, Web 2.0, Web Analytics
6 comments on “What Smart Advertisers Will Do In The Recession
  1. Ben Waugh says:

    A friend of mine just emailed me one of your articles from a while back. I read that one and a few more. Really enjoy your blog. Thanks

  2. Elliot says:

    Man, I cannot agree more with you in that question,

    Where is my advertising effective and why?

    And as coincident as it might sound, that is what first came to my mind when I bought that
    bunch of magazines the other day. Well, after all, we are all living in the same recession, I guess.

    It is true that in the current recession digital marketing is very likely going to grow significantly. It is not because there has been lots of hypes and optimism spinning within the marketing scene. It is just that tough time forces people to look for alternatives, challenge accepted status quo, and be more effective in achieving results. It is just that both agencies and clients have to get smarter.

  3. “For too long companies have been spending vast budgets on advertising campaigns that were measured poorly at best”.
    This one made me smile. It is so true. I am still amazed how many companies/agencies still assess the success of a campaign on total amounts of visits, global CTR and CPC.

    “Where is my advertising effective and why?”. You nailed it. This question is the one I start to hear all around lately. Finally! :-)

    I don’t think that online advertising will grow that much. Global media spending will decrease, that is sure. Online will just get a relatively more important share while traditional media budget & share (TV, print, billboards…) will decrease.

    At least, that is what I observe and hear around…

    Very interesting post!

    Michael

  4. Karl says:

    All the talk of recession will not make people buy things, they are scared to spend their precious money.
    Enough with all the scare tactics I say!

  5. I have found that the industry you are plays heavily in this scenario. For instance healthcare? People are always getting sick. My company simply targets a more affluent demographic in times of recession. People still spend money.

  6. Juan Suarez says:

    hi. I agree with most of your ideas, but I also thing that an advertisment campaign doesn’t only depends on how d oyou wrtie but “where”. Adidas ad campaign was a campaign that hit amost any field, on and offline spaces. however, recession doesn’t allow us to spend such a budget.

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