PPC Marketing In A Down Economy

The economy’s downturn has finally reached the online advertising world. Spends are dropping, advertisers and clients are reducing budgets, and many are confused as to the correct course of action.

What do chief marketing officers think of marketing during a down economy?

Marketing is more important than ever. 94 percent of CMOs believe that “a tough economic period is precisely the time when marketing plays a key role.”

Source: Epsilon, “Epsilon CMO Survey,” September, 2008.

When you stop marketing, you lose touch with your clients. You stop understanding what is important to your consumer base. Many believe that customer service and marketing is more important in a recession than at any other time. If you lose touch with our client base, how can you see the trends your clients are facing?

In addition, you also lose access to valuable data. If you completely stop marketing, how will you know when the economy is rebounding for your products or services? The economy will rebound for different companies at different times. If you are not paying attention to your company’s data, it will take you longer to realize that its time to start advertising again. Those who have continued to advertise will make smarter decisions for their paid campaigns.

Will you understand how your customers have changed? Are there new features, products, benefits, or messages that you need to embrace? It’s not always about click prices and keywords. Effective PPC embraces landing pages and ad copy that speaks to your customer’s desires. You need to continue testing your offers regardless of the economy to learn when your customer’s are purchasing your product for different benefits. Or, more importantly, when they stop engaging your product completely and it’s time to invent the new version.

Where do we start making changes?

All sales and keywords can be attributed to a section of the sales funnel. In a booming economy, companies spend time examining the top of the funnel. How can we find the most prospects and start them down the funnel path towards conversions?

In a down economy, the exact opposite should be true. You make most of your sales from the ‘shop’ and ‘buy’ sections of the funnel. Spend more time testing and executing properly on the bottom of the funnel. As you cap out your effective spend at the bottom of the funnel; move up towards reaching more prospects.

sel column funnel

Several companies will completely disagree with the above advice for three reasons. And they are three good reasons that you need to keep in mind.

Reason 1: These companies work with larger brands that live in the top of the funnel. For example, most Coke or Pepsi commercials spend their time at the top of the funnel. It’s the convenience store that converts the soda buyer to an actual product sale.

Reason 2: B2B, long sales cycles, new products, and similar examples need to spend some time at the top of the funnel. Often B2B companies rely on phone sales to close the deal, and a whitepaper download to start the funnel process. Without some awareness, they will not make any sales. However, it can be useful to consider the whitepaper download (or other alternative conversion activities) as the actual conversion, set a cost per download target, and bid within the top of the funnel on a cost per acquisition (CPA) basis.

Reason 3: Shouldn’t you keep an eye on total sales and profits? Yes, most definitely. Whenever you change your PPC tactics, measure not only the changes in CPC, CTR, conversion rate, etc – but always measure a change to total profit and total sales. If you spend enough time at the bottom of the funnel, you can eventually hit a very nice CPA. However, if you only have one sale a month, a low CPA will not keep you in business.

Therefore, spend most of your time optimizing the bottom of the funnel; however, never forget to measure profit and to make sure your marketing efforts are supporting your business goals.

Change your focus

Consumers will look online more. This year has seen a 10% increase in people who research online before buying in the store.

Source: Vertis Communications, “Customer Focus 2008: Holiday Retail study,” October, 2008.

Focus on price & savings – The above quote focused on the holidays. However, not everyone operates within the retail industry. There are two ways to focus on price and savings within your PPC account.

The first is to put yourself in the consumer’s shoes. Regardless of the economy, if your TV breaks, you’re going to buy a new one. None of us in the United States have a choice — taxes are due in less than three months. In a booming economy, the more features the better. In a down economy, we focus less on mass amounts of features and more on staying within our budget.

You should test ad copy and landing pages that focus on savings, and ‘good enough’ qualities.

Focus on additional value – Can your company add more value than your competitors? Value can take many different shapes. Consider these value statements:

  • “We saved $1300 on our taxes by using Jack & Jill’s Accounting Service”
  • “Buy Jason’s Firewall, and receive our spyware protection software for free”
  • “Buy 3 copies of Jason’s Firewall, and we will upgrade you to Jason’s Firewall Pro for no additional cost”
  • “We saved $800 in marketing expenses by reading Search Engine Land’s Paid Search Column”
  • “Prius owners save $2000 on gas each year due to our patented hybrid engine system”

There are many ways to add additional value to your products. From saving money, to free upgrades, to not having to buy more of another product. You don’t even have to change your margins to add additional value. The last two value statements above just showcase how the product adds value to a consumer’s life, and don’t actually change the product’s price or the company’s bottom line.

Add money-saving keywords – We’re seeing more searches that include the words ‘discount’, ‘coupon’, ‘sale’, etc. This is backed up by a comScore data showing a sharp increase in visits to coupon sites.

Consider these discount saving keywords:

  • Crocs coupon code
  • Zappos coupon
  • Cheap shoes
  • Inexpensive shoes
  • Discount shoes
  • Low cost shoes
  • Shoe Sale

You may wish to do some additional keyword research focusing on how your potential customer’s are changing their search behavior during this economy to search for savings.

Account optimization

Conversion optimization – This statement should be said with every single PPC article written; “Always test your ad copy, landing pages, and keywords to maximize your business goals”.

This doesn’t change in a down economy. The reason to test is two-fold.

First, it helps you understand your customers. The better you understand them, the better you can market to them (changing keywords, ad copy, and landing pages), the higher your conversion rates become, the lower CPA, the higher your ROI.

Second, it helps you see customer’s evolve. Some people will see a worse economy in the next few months. Others will see a better economy. What will your customers see? If you are constantly testing, you’ll see when the feature laden ads that don’t mention additional value start to increase in conversion rates. This is a sign the economy isn’t affecting your products as much as it was previously. You need to watch these signs so you can change your ad copy and landing pages to match your customer’s desires.

Refine your ad exposure – Spend time researching negative keywords. It is just as important to keep your ad from showing on a non-converting keyword as it is to show your ad on converting keywords.

Measure conversions by ad copy. Since we bid by keyword (or sometimes ad group), its easy to get lost in only measuring conversions by keyword. Do not forget to measure by ad copy. If you find ads not performing, replace them.

Location targeting. Run a geographic report. If you have geographies where you are having poor results, you can either:

  • Block your ad from showing in that geography
  • Create a new campaign targeted to that geography (this includes ad copy and landing pages) to see if you can market effectively to that area

Ad Scheduling (otherwise known as day parting). Measure conversions by day of the week, and time of day. If there are clear patterns, change your bids based upon those response rates.

In a good economy, we might want more total ad exposure and not keep our ad from showing at time where we might break even or have a slightly positive ROI. In a down economy, refine your exposure so every time your ad is shown, you have the highest possible chance for a conversion. If your budget is decreasing, every penny spent counts more than before.

Engage Your Audience – Can you add new conversion activities?

Examine your current offerings. Do you offer only a buy or contact option to a search? Do you only offer a whitepaper download? Are there other conversion items you can add that will help engage your audience?

Consider…

  • Free product demo webinars
  • Free conference call advice
  • Subscribe to our newsletter
  • Follow us on Twitter
  • Subscribe to our blog
  • Visit our booth
  • Tour our offices
  • Free product videos
  • Downloadable whitepapers

Do not confuse your audience!

While it can be useful to try multiple conversion actions; do not put them all on a single page. All you will end up doing is confusing them and not ending up with any conversion.

Try a newsletter and RSS subscription. Then market your webinar to that audience that subscribes to your updates.

Try follow us on Twitter, then offer a free conference call for Twitter followers.

Try a simple, ‘attend our free webinar’ and them send out a complimentary whitepaper two weeks later to those who haven’t contacted you.

Do not bombard your customers, or potential customers with advertisements.

Find alternate ways to engage your audience.

Marketing in a down economy

I’m not an economic expert, so I won’t attempt to speculate on how long the economy will be in a downturn. However, I can say that we can weather the storm by becoming more customer centric. In any economy, you should set bids by your business goals. Any advice that contradicts that PPC axiom should be examined with common sense.

However, in a down economy, we’re adjusting the normal best practices for PPC.

  • You’re testing value statements in a world that lives by feature comparison and benefit buying.
  • You’re spending more time examining discount keywords and ad copy.
  • You’re sinking time into creating landing pages that will not be useful when the economy turns around.
  • You might be adding negative keywords that will be deleted when you can increase your company’s exposure.

However, the most important aspect to marketing in a down economy?

Thinking more about how to engage our audience.

It’s your audience that will ultimately determine your success.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: SEM | Paid Search Column

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About The Author: is the Founder of Certified Knowledge, a company dedicated to PPC education & training; fficial Google AdWords Seminar Leader, and author of Advanced Google AdWords.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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  • http://www.uppman.net muppman

    Good post! I also think that SEM/PPC will be even more important during the recession than earlier. In short, this is because of easy measurement, immediate response, good ROI and the flexibility it has (http://www.uppman.net/2009/02/why-sem-is-the-right-choice-during-a-recession/)

    BR,
    Magne

  • http://www.universalmccann.com steffen.horst@umww.com

    Good Article, with very good content. Out of my view, everything you mentioned with regards to testing, optimisation etc. should be applied at any time. This is not only important during economic down times.

 

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