Search Marketing & Surviving a Recession
It’s a brand new morning and a new day of sessions. We’re starting off on such a cheerful note: Search Marketing and Surviving A Recession. Jeffrey K. Rohrs is moderating this discussion-based session. Our speakers are Andrew Beckman, President, Location3 Media; Dave Davies, CEO, Beanstalk Search Engine Positioning; Russ Mann, CEO, Covario; and Jon Miller, Vice President, Marketing, Marketo.
As an introduction each speaker gives their take on the state of the recession. Andrew says that the recession has been mild thus far, but is trending in the wrong direction. He says that search marketing is a pretty safe industry; however, success comes at a higher cost. Dave is based out of Canada and so says that his view of the impact of the recession is different. He says the biggest effect is due to the value of the dollar. Russ says that rather than half empty or half full, the glass is overflowing. He says that marketing spend is significantly shifting online. Jon is optimistic about the economy, but as a realist, recognizes that some people are struggling.
Are we in a recession?
Dave thinks yes, as evidenced by the decreasing value of the dollar. Russ says that we’ve been skirting a recession as well as stagflation, more recently. He says that some sectors are doing well while others are doing better. Jon says that the catch is how you define a recession. If defined as 2 consecutive quarters of GDP downturn, we haven’t seen that – things have been flat. He says that it’s the worst possible non-recession.
Andrew says that the recession is industry specific. Consumers have mismanaged their budgets and are now feeling the squeeze. He says they’re seeing a pullback, and so his company is analyzing where the few buys are coming from in order to hone in on where purchases are being made.
What worries you?
Russ says that CFOs are tightening up, scrutinizing purchases and media spend. As an analytics software company, he says that marketing is the least provable and least automated part of the business and so it’s often the part that loses budget. However analytics is a good measurement for marketers to be able to argue for keeping their budget.
Jon says that companies with deep pockets realize that times of downturn are actually opportunities to double the spending, whereas small companies cut their spending. He thinks that branding will be cut back. Andrew says that companies need to find the new opportunities and is facing a challenge of convincing clients that marketing should not be cut out. Dave says that organic search is provable. His concern is that the success of his clients is declining, due to no fault of their own.
In this environment, where do you put your first marketing dollar?
Andrew says that optimizing for the correct terms and analyzing with the right metrics are the fundamental mainstays. Dave says that he fully agrees. People need to take a good look at their site, watch what users are doing, and provide what they’re looking for. Russ says that the first thing is customer research and strategy. He says that no technology or system is the silver bullet unless you get really strategic with the client first. Jon says that when budgets are tight and clicks are fewer, testing and conversion optimization should be the primary focus and customer relationships should be built.
Jeffrey polls the audience: Do you think it’s more important to focus on acquisition or retention? A few more people raise their hand for retention than for acquisition.
Do you expect prevailing macroeconomic conditions to lead to increased consolidation?
He says that first you’ll see big companies gobble up tech companies. You’ll also see lots of fragmentation on the small end and new companies popping up in the search industry. Dave says that we’ll see some consolidation in the industry, but not because of recession. That’s just where we’re at in the evolution of the industry. The money is there and consistent, so companies are now ready to acquire. Jon says that he’s seen an increase spending in offer development, specifically offers targeted at people in the later stages in buying.
What SEM-related strategies or tactics help minimize marketer stress?
Russ says that lifetime value modeling is something he tells clients to do. He says that search can be used effectively for retention and lifetime value and expansion. Again, he says it goes back to understanding your client’s business and who they are targeting. Jon is constantly surprised by how small business owners don’t understand the benefit of SEO. To minimize your stress, he says you have to find a way to tie what you’re doing as a marketer to the impact on growth and activity.
Andrew recommends that when your acquisition strategies are in place, look at the conversion percentage. Multivariate landing page tools are critical and will help you increase your lead or sales value. Nothing will help you increase you leads better than what the numbers actually show. Also, he believes that there is a way for affiliate search is a strategy to consider when moving forward in the recession.
Dave ways that providing analytics information and being able to explain it to a client is good for marketers. He said that before you could build it and they will buy. The recession has forced marketers to take a look at what they’re doing, and looking hard at analytics and conversions has helped develop the industry.
How do you deal with prospective clients hesitant to jump into SEM, in part due to the fact that you can’t guarantee rankings?
Dave says he does guarantee rankings. Andrew says it depends on the term. However, he would help them see that focusing on the content of the site will be of great benefit. Russ says that test and invest is a proven strategy, seen in previous case studies, that he proposes to new potential clients. Rather than guaranteeing first-page-results, he says that it’s a process of working toward success.
Some areas have been more heavily affected by the recession. How does this affect SEM and how can marketers leverage the right areas?
Andrew says geotargeting is the answer. Find the stronger local economies. Russ says to look to Asia, where the economy is booming. More clients are asking about how to market and promote their products and services abroad. They’re helping clients be included on Baidu.
What areas of the budget are clients moving their budget from in order to redirect it to search?
Dave says that one of the first actions will have to be analyzing yourself and what are you doing. Find the things that are lease effective, trim those and test. Jon says the biggest area where money is wasted is push marketing, advertising that just shouts at the market. Andrew says that search has the opportunity to be both a direct marketing and branding vehicle at the same time. The foundation of search marketing needs to be placed now because fine tuning is a long term program. Russ says that the most money is wasted on short term activity rather than long term value.