By Matt Robson, Head of Paid Media at Wolfenden
Whilst 2022 H2 was billed to be the ‘coming back to life’ party for the country following the pandemic, the economy has other plans. As a result, we’re heading into a recession which experts predict could last until 2024.
In times like these, marketing budgets can often get hastily slashed in cost-cutting measures or funnelled into short-term sales-driven campaigns. There’s no one-size fits all approach for marketing strategies in economic downturn, but one thing is very clear – doing nothing and changing nothing is not going to work.
Strategies need to pivot, and brands need to fully understand the context of their marketing and advertising activity within their customers’ lives to stay connected with them.
So, how can you make your PPC budget work harder through this uncertain time.
Don’t turn brand awareness campaigns off
Historically, the belief has been held that brand awareness activity contributes to long-term success, and performance-led activity – PPC, paid social etc. – will deliver you short-term results. This means that when push comes to shove and budgets are being pored over, brands tend to favour performance-led activity in tough times.
Performance-led activity by its nature is highly attributable, meaning it’s easy to see which campaigns have generated sales, and when finances are tight, as a marketing team these are the stats you need on a weekly – sometimes daily – basis for your board. But how true is it that brand awareness activity only delivers long-term results?
Recently, Meta revealed that it’s seen better short-term results from a combination of both brand and performance-led campaigns rather than solely performance-led; with an 84% increase in incremental organic search volume and 18% lift in incremental sales with this approach.
This also demonstrates how running brand awareness campaigns through paid media can benefit your wider marketing channels, so whilst you might not be able to directly measure sales from a brand awareness PPC campaign, if you look at the wider picture for overall digital growth, you should see gains.
Building and maintaining your brand during a recession is the best way to minimise long-term business risk, various pieces of research from the last recession in 2008 have shown that those brands who continued with a consistent and relevant communication strategy throughout came out on top afterwards.
Performance campaigns target by intent, so they can become reach constrained as a certain point as the audiences are much smaller. You might find as well that these audience pools reduce during the recession as those in “buying mode” dwindle. So, your best approach is to run performance campaigns – but start to add in and test upper funnel activity and review digital performance as a whole.
Don’t measure any channel in isolation, look at the bigger picture
This brings me nicely to my next point, if you’re running brand awareness campaigns yet still measuring PPC success on CPA or ROAS, you’re going to get a distorted view of what’s working.
In times of economic uncertainty, it’s natural for businesses to double down on measurement and reporting – that makes sense, but it’s important as marketers we’re equipped to shine a light on the right metrics.
If you’re only focusing on performance targets, be aware that adding in brand awareness campaigns will inflate CPAs and reduce ROAS. As mentioned, a combination of performance and brand awareness campaigns can generate lifts across other channels, so it’s important that when trialling brand awareness activity – you measure total digital performance, and you’re aware that PPC performance may look down year-on-year but overall, the growth is there.
Importantly, make sure that your tracking and reporting is set up accurately – audit your Google Analytics account and ensure all goals are firing and there are no data inaccuracies. You should have reporting setup for across the conversion path and for assisted conversions, to give you a true reflection of what’s working.
It might take longer for customers to convert during this period – as consideration around what they spend their money on becomes more of a focus, so monitor your paths to conversion closely and understand the channel mix that’s supporting those sales. Whilst it may seem on the surface to make financial sense to pause a few channels, be aware that these could have a detrimental effect on the performance of other channels.
Setup data sharing between your channel teams, too. It’ll be important from a PPC perspective for example to understand what products and keywords are performing well from an organic perspective so paid activity can support this, or can focus on other products for more product coverage.
Understand recession psychology and feed into your targeting and messaging
There’s a lot of research and articles on consumer behaviour during recessions and economic downturn, it’s important that you understand how the situation is going to impact your audience and customers and change your activity to adapt.
For example, could you focus campaigns on essential products in the short term and ‘treat products’ as you get closer to Black Friday and Christmas? Look at the layout of your products on your landing pages too, you might want to put the more affordable products at the top for example.
A big part of this will be close monitoring of your performance and the wider market, understand what product trends there are and look at margins more closely during this period. From a business profitability point of view, what does it make sense to push?
Metrics such as average order value (AOV) may decrease as people look to spend less, so what can you do from a PPC perspective to counteract this – selling more of your cheaper products as an example.
Don’t be afraid to trial new audiences
As I’ve said, keeping activity the same just isn’t going to work throughout this period. Depending on what industry you’re in, your target audience might change due to your price point, so it’s important to continually test new audiences. You might find there is more demand for your products, so you can expand your targeting options.
If you’re monitoring your sales performance and customers closely, you should feed this information into your PPC team. If you can, it’d be a good idea to run focus groups during this period to get a clearer idea of who your ideal customer base might be.
It’d also be a good idea to collaborate more strongly with other channels; you can create audiences off the back of other channels, for example affiliates, social media or email.
Most importantly – act now
As a final note, don’t wait for campaigns to stop performing before you frantically change tactics – there might be opportunities in new audiences and product trends that you can take advantage of now.
Start getting the wheels in motion for collaborating more strongly between channels, monitoring performance and trends on a closer basis, reporting on the full conversion path and total digital performance and trialling new messaging and audiences.
It could be the shift you need to get your brand successfully through the other side.
