How to Spend Fewer Dollars, Smarter and Faster, during Tight Times
There’s been a great deal of talk about a US recession. It’s coming. It’s here. It will be mild. It will be devastating. There is no shortage of speculation. I’ll leave the debate to the experts because no matter which way you slice it, consumer spending is slowing and companies are struggling to deliver growth rates they achieved in the past few years. That much is undeniable. And with this in mind, it’s a critical time to look at how you’re spending your marketing budget and opportunities you may have for improvement. In this post, I’d like to share some thoughts on how you can spend few dollars, smarter and faster, during recessionary times.
Over the past century or so, companies are notorious for slashing budgets left and right during times of economic slowdown, and one of the first to come under scrutiny tends to be marketing.
Marketing is often perceived as a variable expense, one that can easily be tossed by the wayside in lean times. Yet numerous studies have shown that the companies that invest in advertising and marketing aggressively during times of recession are those that are the most successful, both during and as the recession starts to turn. Coopers & Lybrand, McGraw-Hill, and ABP/Meldrum & Fewsmith are just a few studies that support this contrarian reality. Those companies that invest in marketing more than their peers have greater growth in, and following, a recessionary period.
Of course it’s not realistic to say that marketing budgets should not be cut at all — when money is tight, budgets are slimmer across the board. That means that the projects that do remain on the books need to perform better than ever. During economic growth periods, a marketing team may implement 20 initiatives, with 10 of them turning a profit (hence the famous adage, “I know 50% of my marketing dollars are wasted, I just don’t know which 50%). However, in a recessionary environment, a marketing team might implement only five initiatives — and all five must be tremendously success. Failure is not an option.
To make that happen, a marketer must be able to invest wisely and quickly, and to be nimble enough to change on a dime to oust under-performing initiatives and implement better ones.
In other words, while it is important to continue to spend in marketing and advertising, it is equally important to be extremely judicious.
But what does that look like, exactly? For a start, I believe you should focus on the areas that are immediately measurable. For example:
- Search – the poster child of online marketing
Let’s look at TV vs. search. For most mass marketers, the ability to measure TV is debatable. There are panels and focus groups, but they are slow and unwieldy. In fact, unless you’re tracking sales via direct response methods like dedicated 800 numbers, it’s very difficult to know just how effective your TV ads are. Print is often equally slow in terms of returning measurable results.
Online search, on the other hand, provides a near real-time window into campaign performance and return on advertising spend. In a tight economy, this real-time information is critical to quickly adjusting your marketing spend to avoid costly missteps.
An analytics package that allows you to get an instant sense of your ROI, to see what’s working and what’s not and allow you to cut the fat in real time, is vital.
- Email marketing – the gift that keeps on giving
It’s relatively easy to succeed with email marketing, and it’s a tactic not likely to be abandoned by companies even in a time of recession. Even here, though, rapid measurability can mean the difference between success and failure.
Email systems that require you to tag the emails and then track them manually are labor-intensive and therefore unwieldy and slow.
Look to a platform like Omniture Genesis, which automatically tags the emails and tracks them, to dramatically improve your agility with email campaigns, changing promotions or offers as you discover what is working and what is not. The ability to change offers quickly and easily allows for incremental and constant improvements in ROI.
- Streaming video – Lift up the hood
With the increase in the use of video online, the use of rich media display advertising and rich media on-site has surged. We now have the ability to offer richer experiences to our users — but we must be careful to avoid the pitfall of using video and other rich media tools simply because they look and sound good. We may be certain that they’ll be attractive to our users, but the reality may be different than what we imagine.
Video is very expensive. The same rules apply as with email and search – you need to quickly figure out which video initiatives work and which do not. How is that shiny new video driving your site KPIs?
But because online video is newer than email and search, you need to do more. You need to lift up the hood and expose the inefficiencies inherent to this emerging medium.
As you may already know, you can use Omniture to do just this. Dive into the video stream itself to understand, for example, how much of the video a viewer watches, how long they spent watching, and where in the video they stopped watching.
Such close measurement allows you to know not only whether a video is working or not, but which parts of the video are more effective than others.
The same holds true for other Web 2.0 technologies such as widgets and user-generated content: they are emerging technologies and they’re exciting, but they also mean big investments. You must pinpoint the efficiencies and quickly reduce the inefficiencies to make the most of your marketing spend.
Marketing dollars may become harder to come by. When you have the data supporting where and when to invest those dollars, you’ll continue to be smarter, faster and better than the competition.
What do you think? In these leaner times, is your organization embracing analytics to sharpen your competitive edge and not lose market share?