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Buy Low, Sell High - 3 Strategies to Ramp your Marketing Efficiency in a Bad Economy

Brian Easter

May 12, 2008

The old adage “buy low, sell high” isn’t just applicable in the stock market – it’s relevant for online marketing as well. With the economy in a downturn, many online advertisers are becoming more likely to offer media at reduced rates. According to Nielsen Online’s Advertising Breakdown by Industry, total impressions dropped from 296,395.70 in January 2008 to 277,438.40 in February 2008. Moreover, Search Engine Marketing (SEM) spend has the potential to be more efficient given the fact that many firms are spending less and/or pausing their SEM campaigns in part or in full. Even more compelling is that many interactive agencies are also feeling this crunch and are being much more aggressive in their pricing.

Search Engine Marketing Trends – Bullish on PPC Campaigns
Although there has been an upward trend in spend and cost over the past several years, the ailing economy has recently driven spend down. This downward trend has created a very attractive time to become more aggressive in SEM tactics. According to the Average CPC Search by Category data from SearchEngineWatch.com, 5 of the 8 categories measured in January and March of 2008 have decreased or remained the same in terms of average cost per click. Of the categories that experienced increases, two of the three were credit and auto finance. These categories have an upward average CPC trend that one might expect in a troubled economy. The only other category to increase was in travel which is most likely driven by seasonality. Even more notably, the retail category showed a decreased overall CPC average, going from $.43 in January to $.39 in March.

Anecdotally, we’ve chatted with several prospects recently who have either lowered their PPC spend, adjusted their day parting strategy to show their ads less often, or have paused their ad spend for the time being. These firms come to us in the hopes that we can generate new ways to acquire customers more efficiently. Often times we’re able to simply implement SEM best practices that have not been fully implemented by the clients themselves, but other times we have found that their creative isn’t ideal for conversions either.

The reason these issues weren’t first and foremost in the minds of these firms in the past is due to the fact that in an upward economy, inefficiencies can be more easily hidden. The ad campaigns, creative, or even the products / services themselves may not be fully optimized, but they continue to drive acceptable results during better times. As the old saying goes, “the high tide makes all ships rise”. However, when times get tough, these inefficiencies and weakness become glaring.

Bear Market for Search Engine Optimization Firms
Although SEO traffic is not impacted in the same manner PPC is relative to cost per click trends, given the current financial and competitive landscape, SEO agencies are likely to become even more aggressive with their pricing and terms. This means marketers can potentially get discounted rates and/or more services included in their agreements.

Additional efficiencies can be gained by incorporating SEO PR into existing SEO and public relations campaigns. SEO PR is a blend of search engine visibility and traditional public relations that disperses a company’s message across the Internet by way of online media outlets and search engines. By converging these activities not only are there efficiencies in the lack of duplication of effort, but as mentioned previously, both SEO and PR firms are likely feeling the effects of the current downturn in client spend and are more likely work towards client-friendly agreements.

Time to Get Creative
Not only is the time right to spend online, it may be an even better time to start new design and development projects. Many agencies have seen their client’s ad spend decline, projects being paused or cancelled, and they are most likely experiencing a decrease in overall demand and leads.

This is a recipe for clients to get great pricing for upcoming projects. I recently spoke with several of our peer agencies at a local marketing event and many echoed their increasingly aggressive approaches to attracting new clients. Whether the consideration given was price, contract flexibility, increased deliverables, or revisions, the point was clear that agencies are willing to compete much more assertively for new business now.

Summary
Even though it may seem a bit counterintuitive, by engaging an interactive agency for design & development projects, starting or ramping search engine marketing or other online media campaigns, and by negotiating agreements in the midst of the current economic slowdown could lead to a substantial return on marketing investment. By initiating contracts now, while costs are lower, agencies are hungrier, and average CPCs in search are remaining flat or declining counter to the upward trends seen over the past several years, smart marketing professionals are likely to get more for less.

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