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Why Measurement and Online Advertising Matter More in a Down Economy


Look around. People are worried. For every reason to be excited, for every reason to be happy with our world, a bit of economic uncertainty is scaring people. In spades.

And the result is a lot of 'hunkering down'. Yahoo cut 10% of its workforce. Lots of other companies are cutting back, cutting budgets across the board and, especially, slashing marketing budgets.

History tells us this is a foolish move.

An Interbrand Study titled: "Leveraging Brand Value in a Downturn": "Merrill Lynch was seeing the return on its early '90s branding investment in its ability to build and leverage its reputation in a broader market. It may have outspent Bear Stearns to do so, but the positive return was clear."

And according to BusinessWeek, the result was crystal clear. So clear that simply looking at a chart comparing indexed share prices for the two competitors during and just after, the 1990 recession shows that Merrill Lynch's "outspending" (as it was seen during the recession) had a huge impact, redefining the competitive landscape between the two major financial houses and, analysts believe, leading to the eventual demise of Bear Stearns.

So what does this have to do with our current situation? Well, first and foremost, virtually every financial and marketing expert is telling companies not to cut their ad spend and marketing budgets despite the 'economic downturn' we are supposedly currently mired in.

But here's the reality. Companies are going to panic. They're going to cut their marketing budgets. It's relatively certain. But there are still going to be advertising efforts.

And that is where we will see the difference, like between Bear Stearns and Merrill Lynch way back in 1990. Who will come out on top? What's the right strategy?

The right strategy, and the best way to be the Merrill Lynch in your competitive marketplace: Go Online.

The online market is still growing. It will continue to grow throughout this entire 'slowdown' according to analysts. There are very, very few markets that is true for.

And the reason is simple: Measurable Return on Investment (ROI).

Smart businesses are already moving this way. Check out this bit from Marketing Pilgrim:

“MarketingProfs has observed that online marketing is also turning into a venue where marketers can stretch their dollar while accurately targeting leads and customers. 60% of all marketers surveyed stressed that they would be increasing their online budgets while 85% would be reducing their use of traditional marketing vehicles.”

Therein lies the beauty of online. While we are seeing an increase in many markets cost-wise, it is still, by far, the most cost effective option for qualified leads. Without fail, we have seen (via our Media Dashboard, which is unique in that it can measure online and traditional media and see what's working) that our online efforts for our clients are, generally speaking, the best way for them to attain strong leads without spending too much to do it.

However, as much as it make sense for companies to shift much of their marketing efforts online - they need help. And a company like us is perfectly built for just that reason. We're online advertising (and measurement) experts. It's what we do. We live and breathe this stuff. And we can get an online presence up and running quickly, efficiently and with a minimum of cost. When companies try to do this themselves, they run into problems. See this bit from a recent analyst report:

"A new Jupiter Research report surveying the operational profile of about 1000 search advertisers spending upwards of $50k/month. This report made headlines because it showed that nine out of 10 of them were willing to spend up to 22% more on search, but were hamstrung by their own obsolete internal processes, which include an almost stone-age approach to managing search campaigns (a quarter of them are using Excel to manage their bids), overloaded in-house teams, and a general frustration with the robustness of campaign automation tools.

In essence, the wise way to go is an outside expert in online advertising if you want your business to not only thrive through this downturn, but come out on top after.