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Friday, March 28th, 2008

Recessions Can Teach Valuable Marketing Lessons

 

Search engine marketing budget - to cut or not to cut?Recession, recession, recession… I don’t know about you but I have had my fill of this doomsday word! It seems to me the panic caused by this word simply increases the chances of a recession occurring. Recessions, however, have a silver lining because they provide business owners with the opportunity to look long and hard at their expenses and this can provide valuable insight in strengthening the business long after a recession recedes. Some cut backs may become obvious such as eliminating frivolous office expenses and are a wise move but should business owners cut back on their web marketing? Lets look at the circumstances within web marketing where cutbacks may or may not make sense.

When You Should or Should Not Cut Back on Pay Per Click or Search Engine Optimization Campaigns
So what is unnecessary marketing? Logic dictates that any marketing that is not profitable is not worth keeping. That said, how certain are you that a particular form of marketing is not profitable? Perhaps the following questions and notes will help you decide:

  • Have you been tracking key performance indicator(s) (KPI) since the inception of the campaign?
    Let me explain; say you launched an SEO campaign to drive more traffic to the “Norco Bikes For Sale” page on your website. In this case a very simple key performance indicator (KPI) would be how many visits the page has received from people that stayed longer than, say 6 or 7 seconds (this time qualifier would all-but-eliminate low quality clickthroughs). If you tracked this all the way from the inception of the campaign and you saw that this KPI had increased perhaps more research is in order before cancelling this campaign. If you saw no measureable improvement in your KPI then the campaign should be canned, or at the very least, paused.
  • If you haven’t adequately monitored the success of a campaign from the start is there a way to determine it now?
    Usually there is a method to determine the success of a campaign using historical data but the method depends on a multitude of circumstances. Here are a couple of the most common methods:

    Dig into your web statistics: any hosting company worth its salt (like LunarPages or WeDoHosting) will have web statistics compiled for your website. These stats can provide revealing historical information on the ups and downs of traffic on your website.

    Note: I recommend setting up Google Analytics on your website (free) for an alternative view of your stats. I find it best to have Google Analytics installed if even just for piece of mind that you have a backup of your stats (if you move hosting providers for example). If you do this, however, please read this handy article by Matt McGee on protecting your privacy while using Google Analytics.

    If web site statistics are not an option then you may have to review your income history and see how much of your income you can tie into the specific marketing campaign. This process is not likely to be painless and may very well be impossible if you have a large number of campaigns going on at the same time; however, it could prove worthwhile if it keeps you from wrongly shutting down a profitable campaign.

  • What do your frontlines say? Are you getting more sales from the web?
    Every sales person in your office should be asking how prospects found you and they should be keeping meticulous notes on this information. If they are then ask them if they have seen a marked increase in web-related phone calls and whether they found you through a (specific) search engine. This kind of info is invaluable to determining the success of any marketing campaign.

  • Is the campaign nearly profitable but not quite?
    If you can see the campaign is close to being profitable then I strongly recommend sticking to your guns (if you can afford to) and conduct testing to increase the viability of the campaign before giving up on it.

    Multivariate testing is often a great technique for improving a campaign. Multivariate testing is a term used to describe the tweaking of a landing page in manner that (hopefully) influences a desired reaction from the visitor. Tweaks could be as simple as removing an image of a Norco Bike at the top of the landing page which in-turn moves the marketing text higher up the page. A multivariate test would examine how this seemingly minor change positively or negatively affects the page. Usually a positive reaction would be an increase in clickthroughs to a goal page (such as a purchase page or an inquiry form).

    Here is an excellent example of successful multivariate testing.

  • Did you check to see if your pay-per-click campaign was profitable before turning it off?
    When you are looking at cost cutting your attention will most likely be focused on major expenditures like pay-per-click (PPC) campaigns and rightfully so; a poorly performing campaign can be a major drain. That said, you must do your homework before shutting down a PPC campaign because it could be delivering the profit you desperately need. In a perfect world this question would be a waste of space but I am sure a vast number of PPC campaigns are run without proper monitoring so I feel this reminder to verify profitability is warranted. If your campaign has not been properly monitored then I suggest thinking carefully about your next step. You can either turn it off for the time being and see what effect it has on your sales OR immediately install the appropriate mechanisms to track a pay-per-click campaign and monitor it long enough to determine if it is in fact successful; the time required depends on the breadth of the campaign but 2 weeks should do the trick.

Evaluating the Success of Social Media Marketing Campaigns
It can be difficult to associate profit with Social Media Marketing (SMM) campaigns since they tend to have a more indirect affect on sales. As a result, determining the success of a SMM campaign could seem nearly impossible. Fortunately that isn’t the case because like any marketing campaign you likely (or should have) started the campaign with some goal in mind. Here are a few questions based on common SMM goals that should help you determine the success of your campaign:

  • Has there been a regular and distinct increase in subscribers to your blog RSS feed or newsletter subscriptions?
    If you are using Feedburner or another RSS management tool look at your average sign-ups on a weekly basis (take more than one sample) before you start your SMM campaign(s) and then compare that to a sampling of a few weeks over the past month or two. Do the same examination for your newsletter subscriptions (using whatever management tool you use to monitor signups). Do you see a substantial increase in signups on a weekly basis? If not then have an in-depth discussion with your SMM team or vendor and determine where the disconnect is. After all, these assets have to be doing something for their money – perhaps they see another metric increasing.
  • Are you seeing more traffic from social media websites? If so, are they of a high enough quality?
    Open your web site statistics, go to your referral stats and look for increased traffic from social media websites your SMM team is concentrating on. If you don’t find any additional traffic stop at this point and have a serious discussion with your SMM team.

    If you do find an increase of traffic from social sites then further segment this data and determine the quality of this traffic. For example, using ClickTracks Professional it is easy to create a filter that shows only visitors from StumbleUpon (or another group of social sites) that stays on your website longer than 5 seconds; this will eliminate zero second (aka “useless”) traffic and leave you with the worthwhile data. Now take this traffic and compare it to the expense of acquiring it through your current SMM campaign. If the numbers appear favourable and you feel the benefit outweighs the costs then you have your answer – keep the program. If the numbers are unfavourable either sit down with your SMM team to adjust/tweak/modifiy your campaign (by finding more appropriate social sites to become active on) or shut the campaign down until the winds are again favourable to refocus and try again.

  • Are you or your company getting talked about more often? Is it positive or negative talk?
    No matter what type of campaign you have running it is important to keep tabs on your online reputation. While running a SMM campaign it is easy to step on toes and cause ill-will; especially if your marketers are not taking care to understand the unique etiquette of each social property they participate in. If you are not sure of your current reputation then try searching Google for specific iterations of your business name and your key employee names. Document anything that appears positive or negative. Also make certain to setup a Google News Alert for specific key phrases so that you can be alerted whenever relevant fresh content is made available in Google’s vast database. If you find negative press then handle it immediately by responding to it (decide how this best be done) and quickly inform your SMM team of the issue so they can learn from it and avoid a reoccurrence. If you find a lot of negative press then you need to decide if your SMM campaign is worthwhile continuing since you have to spend so much time pursuing damage control.

Conclusion
In an ideal world where a marketing department is running a tight ship a recession would have little or no impact on a marketing budget because smart companies realize they need to maintain the flow of business. That said many small businesses and indeed large companies lose track of the effectiveness of their campaigns so a potential recession provides a great opportunity to increase marketing efficiency. If you fall into the latter category then I hope this article has/or will help you cut costs without cutting profits. Just keep in mind that these evaluations should be conducted on a regular basis (regardless of a recession) so keep this article within reach as a reminder and (hopefully) a helpful reference.


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