The further into the fourth quarter we get, the greater the likelihood of a recession becomes. While some in the mainstream media have, on occasion, tried to inform Canadian Businesses that the economy is on the verge of contracting, these sort of commentaries have come too late, been far too few and far in between the “everything is fine”, “things are great” crowd. I suppose that has to do with being a good businessman. As an entrepreneur myself, I can understand that perspective. You need to think big, in turns of 10x and maintain positivity about the business outlook. But eventually, economic reality will have to sink in and put your feet firmly back on the ground. I for one wasn’t caught surprised by the economic downtown. I have been warning everyone about the telltale signs of inflation, the non-prime auto loan, and housing bubbles, as well as what asset classes will see the greatest benefit during a recession for quite some time.
Now, your profits might be down, fallen to zero, or gone negative. All of a sudden, customer acquisition is a major concern. Rising production costs are putting pressure on your margins. You may even consider making budget cuts (and you should) or laying some staff off to try to turn things around. After all, a recession isn’t simply economics; it’s a situation. Smart companies will innovate themselves out of the situation. Some other companies will not and that is just a reality. But not everything is gloomy in a recession. Latent efficiencies are often discovered during economic downturns. Products can find a new audience, as households look for savings. New services and technology are procured by other businesses as they look for ways to sort out their internal structural deficits.
This is where you come in. You have amazing and affordable power at your fingertips to guide your business through this recession and stock market collapse. That is your Digital Marketing Budget. Since the last recession, digital marketing has gotten leaner, much more sophisticated and is accessible to nearly everyone willing to invest in it. Here is how you can use digital marketing to your advantage to ensure your business’ longevity during the recession.
Keep Ad Spend Up
A recession will without a doubt disrupt your business’ steady income. That being true, you are more than likely to look at making cuts in your expenses wherever you can. One of the unfortunate realities is that your advertising budget will likely be cut. This is a big mistake. Whether you are spending money on ad campaigns on Google or other Display Networks and Social Media, reducing your budget on these networks will hurt your business rather than empower it. Simply keeping your brand visible to a shrinking number of consumers will help you stay top of mind with your customers, and maybe even capture some new ones.
Rather than cutting your ad spend across the board, consider optimizing how your ad dollars are being spent. For example, if you are an e-commerce store, you can reduce, or even cut your ad spend on items you are selling with a low ROI, and allocate the budget on your best performing stock. Not only will you see sales keep up, or even increase, you might just find that carrying low performing stock isn’t worth the effort, clearing up inventory space you can put to better use.
Create More Thoughtful Content
Just because the economy spirals into recession doesn’t mean that people will spend less time on the internet. Quite the contrary, they are likely to spend even more time online, particularly on social networks such as LinkedIn and Twitter, as they desperately look for work. With this information at hand, you can captivate your target audience’s attention by creating more thoughtful content on these channels, as well as others, that will resonate with them.
Your business should create content that aligns sound advice and information with a sense of sympathy for your target audience’s situation, and most of all, how your product or service will improve that. This way, you are displaying real support for other people who like you are trying to survive during the recession, and potentially open a door for new clientele or customers through the economic downturn.
As the economy contracts, so do the rising tides that lift all boats. That means, your business and your competitors will be fighting for the same shrinking group of consumers or customers. While your marketing team should be specialized in growth, one area where you may need to rejig your marketing team is in retention. Keeping your existing customers will be vital for success, let alone the survival of your business during a recession. That said, there is quite a gap between customer service and marketing, and the unfortunate reality of an economic decline is that a need for better retention will become even more pronounced.
That’s why you need to add a marketing person who can focus on retention. Your marketing team needs someone who can translate and exhibit your great customer support while marketing your products or services. Connecting with customers and building communities takes more effort and time than typical social media acquisition strategies. I won’t go too far on this topic here, but I have written about how to change your strategy from acquisition to retention at length here.
Laser Focus Your Campaigns
Digital marketing has allowed publishers, businesses, and brands to really deliver relevant messages to their target audiences with a high degree of relevance and specificity. Whether you are using retargeting, algorithmic, or behavioural targeting, digital marketing provides far better flexibility to reach your prospects than traditional forms of advertising. That said, there are always more things you can do to take your ad spend even further.
Let me give you an example. One of the most successful Facebook ad campaigns I have ever run was for my business which sells electronic dance music vinyl records. I began by creating a custom audience of readers of my blog, excluding people who have read my prior articles. After that, I created a new Saved Audience, including the custom audience of readers of my blog. I then narrowed down the Saved Audience to people living in, or near Oshawa, Ontario, adding a few layers of interests related to electronic dance music. Why did I do that? Because Oshawa has a few regular electronic dance music events and DJ’s, but no record store with a good selection of electronic dance music vinyl records. Of course, this campaign was repeated, to very good degrees of success with other cities worldwide. This kind of targeting really reached and resonated with my core audience.
During recessions, people in smaller markets are often the most hardest hit. While your business rivals are fighting for dollars in major markets, marketing your products and services to people in smaller regions can help you scratch out the competition.
Your Digital Marketing Must Survive The Chopping Block
Recessions are hard for consumers but even harder for businesses. That said, the inherent cost efficiency of digital marketing, coupled with an unparalleled ability to reach highly specific audiences as well as it’s modern communication interactivity will be vital for your survival and success during the economic downturn. While there are many more elements than simply a budget that will define your digital marketing strategy – the right mix of content, inbound, social media, retention marketing, SEO and PPC is simply too essential to cut without consideration.
Now, this doesn’t mean you shouldn’t make any changes – on the contrary, you need to adjust your digital marketing mindset. This means you need to get the right kind of people into your marketing team, people who have experienced recessions before, worked with marketing dollars during a recession and who came out the other end with a degree of success. Although I may come across as horribly conflicted, but hiring a candidate in their mid-thirties with ten years of work experience and doesn’t carry the cost of paying off a student loan, means you can pay them a little less than the market rate, while the candidates take home salary is higher as they do not have a mortgage of a student loan to worry about.
I hope I have convinced you to keep up your digital marketing spend as the equity markets and economy turn dour, and do hope your business continues seeing success (or at least you can keep your losses at a minimum). That is all from me, now let’s turn it over to you. What are the reasons you will maintain your digital marketing budget during the recession? I am excited to read your comments.