By Ben Langdon, CEO, Digital Marketing Group
In the first ‘marketing recession’ I experienced in 1991, client investment appeared to shift from brand building advertising into direct marketing.
As result of the global crisis of 2001, marketing budgets came under the scrutiny of procurement departments and financial directors in a way previously not experienced.
Monies were again directed from above the line to below the line in a bid to optimise available funds through more tightly defined targeting and greater accountability than is available from advertising
And it seems to be happening again as talk of the ‘credit crunch’ and impending recession continues unabated.
We’ve already had many approaches from clients asking us how they might flex their budgets toward direct marketing should a recession become a reality. It’s certainly not all doom and gloom but prudence is prevailing.
Of course, advice seven years on is a little different. Since the turn of the century online marketing has been growing much faster than marketing through traditional channels as brands recognise the importance of online in the lives of consumers.
In 2001, digital channels were still quite new and decidedly not used in anything like the way they are now, even by the early adopters. Broadband heralded a new dawn for the internet in late 2000 as BT launched its DSL services but of course penetration during 2001 was still limited.
Today eight out of 10 European internet users connect via Broadband, with these users spending twice as long online as their narrowband counterparts. On average internet users spend 12 hours a week online and Europe’s younger consumers (16 – 24-year-olds) now spend more time online than in front of the TV.
The e-retail sales index at the end of 2007 showed online shopping spend had increased 54% on 2006. Mobile telephony and other digital channels can document similar rapid evolution during this period.
With evidence as strong as this, it makes sense then to consider digital direct marketing as a means to making more of marketing budgets. The old adage ‘I know half my advertising dollars are wasted – I just don’t now what half!’ is no longer true.
Using digital technology brands can measure how many users view their marketing message, and how many acted on the basis of that message. Brands can develop direct and cost-effective communications with consumers and gain a greater degree of consumer data than through other channels, many of which contain no data capture opportunities.
In addition to which, online campaigns can be redesigned at very short notice (in some cases this can be immediate) as a result of information gleaned from previous marketing thereby maximising return on investment in the short term at very low cost.
Is it any wonder that WPP’s Group M envisages online advertising expenditure outstripping TV advertising in the UK in 2009? It’s almost as if the old maxim of ‘no-one gets fired for hiring IBM’ has been replaced by ‘in a recession no-one gets fired for investing marketing budgets in measurable media’.
But let’s not forget that to make the most of any budget, rooting out those who are more likely to want to hear and buy from you is essential.
Using a scattergun approach on the internet will have no better effect than any other scattergun approach, and indeed could be somewhat more brand damaging as opportunity and online content is vast.
And as consumers may also be tightening their purse strings, giving them any reason to filter you out will not bring the necessary success.
The question is then not just one of which media to use, but how to use those media to best effect.
Consumers now interact with brands through a vast array of channels – in-store, online shops, phone and text are all in common usage for consumer brands, with trendier, techno or simply more forward-thinking brands expanding beyond this.
At each point the consumer interacts there is an opportunity to cement a relationship or erode it. It is therefore vital that brands are able to use information gathered in real time to provide personal and relevant messages to the individual, also in real time.
Web activity generates a wealth of behavioural data that, when combined with real-time decisioning technology and analytics, can be used to do just that.
Building from there, brands that are able to integrate online and offline data successfully will be at the forefront of tightly targeted digital marketing, delivering their marketing messages based on both past and present consumer behaviour.
And it doesn’t need to stop there. Appropriate technologies can deliver instant offers via any instant channel, exploiting the opportunity for personalisation, unlike above the line advertising, and interactivity, unlike traditional direct marketing.
So my advice for clients thinking of how to adjust to a possible economic recession is to use the services of experts to deliver you measurable, targeted and relevant communication, in real time.
That way you won’t be wasting your money, and you and your brand are likely to come out of the ‘other side’ of the economic crisis in better shape than those that don’t.
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