Is Your Digital Marketing Ready to Face a Downturn?
The U.S. is currently enjoying an unprecedented period of economic growth. Since emerging from the worst financial crisis in nearly a century, the economy has racked up 100 consecutive months (and counting) of job gains and eight straight years (and counting) of GDP growth. If this momentum continues throughout 2019 and into 2020, we’ll soon be approaching the longest period of sustained economic growth in U.S. history.
Some see trouble on the horizon, however. U.S. trade tariffs, growing levels of corporate debt and stock market instability are worrying businesses about the possibility of upcoming economic decline. While most believe this will be a relatively minor event, at least in comparison to the Great Recession of 2008, economic downturns typically bring reduced corporate profits and an increased scrutiny on expenditures.
Digital Marketing Must Prove Itself
Even though digital marketing has for years been a proven driver of revenue, it won’t escape scrutiny in the event of a downturn. In fact, marketers will have to work harder to prove their results and justify their activities to high-level executives, especially those who are financially oriented. There will also be much less room for activities that may be perceived as ambiguous or channels that may not seem to pencil on paper, regardless of their intended function.
Here’s the good news: digital marketing has outstanding tracking capabilities which will allow it to justify itself in a down economy, but only if it’s set up well and the results are communicated properly. Even though we’re not currently experiencing a recession, it’s still a great time get your digital marketing operation in shape so you’ll be ready to face the next round of marketing scrutiny or economic downturn with confidence.
With than in mind, here are three steps you can take to execute growth-oriented digital marketing strategies and report those results to stakeholders.
Step 1: Track Properly
Here’s the bottom line: as digital marketers, you should be tracking everything you do -- even during the best economic times. Otherwise, you’re just guessing. Tracking becomes even more important during times of economic uncertainty because -- when done properly -- it allows you to accurately and efficiently measure your results and make good decisions for your business. Many businesses use Google Analytics to track their website traffic and marketing channel performance. However, simply hooking up your website to Google Analytics won’t be enough. To truly optimize for a possible downturn, you’ll need to tune-up your tracking even further. Here’s how:
Establish a Unified Data Source
In order to make unified decisions during tough times, all business stakeholders need to agree upon a single established source of truth. Otherwise you’ll be trying to make smart decisions by comparing apples with oranges. So clean up your analytics platform’s top line numbers and get them to agree to use a flexible platform that looks at all digital channels, like Google Analytics, to evaluate the success of your web activities.
Use Your Tracking Tools Correctly
Once you’ve determined your shared source of truth, make sure it’s set up to yield clean, detailed and accurate data. This will help you see the full picture before making decisions.
Start by properly tagging your marketing channels by using a naming convention that allows for segmentation. This will allow you to easily see what’s working and maximize it.
One of your most important segmentations will be distinguishing channels driving new customers versus re-engaging existing customers. This might include separating branded and non-branded keywords in Google Search, re-marketing and display prospecting in Google or Facebook Ads, or cart abandon emails versus purchaser re-engagement emails.
After you’ve clearly tagged your marketing channels, make sure your analytics platform allows for segmentation so your marketing team can get the granular insight into the data they’ll need. Google Analytics has most of this capability out of the box, but many other 3rd party platforms like Adobe Analytics do as well so make sure to do your research before making changes.
Step 2: Establish and Align Channel Goals
During an economic downturn, it’s vital that resources flow towards the initiatives that best support the bottom line. Now that your data is in tip-top shape, you can begin to track your efforts by establishing return on ad spend (ROAS) or cost per lead goals for each of your marketing channels. For most businesses, these will include activities like paid search, social advertising or email.
Mind the Differences
Before setting your ROAS goals, remember to look at each channel with their differences in mind. Some -- like non-branded search, prospecting display ads or Google Shopping -- target mostly new customers. Other marketing channels, like re-marketing ads, branded search, or email, are better suited for customer reacquisition.
Because you’re asking these channels to accomplish different tasks, it’s important to set goals that match. For example, prospecting display ads and re-marketing ads will likely have different costs, conversion rates and returns because they’re targeting different people at different phases of the purchase cycle.
While both new and returning customers are vital to a business’ success, marketers may need to make tough decisions during an economic downturn about which group is most profitable to target based on what the business is trying to achieve. Establishing goals that acknowledge these differences will make those decisions much easier.
Align ROAS Goals to Meaningful Metrics
It’s also imperative that you tie your channel goals to hard-and-fast financial metrics like your profit margin or lead-to-close ratio. If you don’t, you could be selling product all day long while still losing money or leaving money on the table by under investing.
Understanding these numbers also allows you to adjust your marketing mix to align your efforts with specific business goals like maximizing profitability, increasing lifetime value, or acquiring new customers. During an economic downturn, it’s more important to understand these levers so you can hone in on the activities that will most benefit your business in that moment and ensure you are aligned with stakeholder objectives.
Step 3: Justify Activities to Stakeholders
By properly segmenting your data and setting customized channel goals that support larger business initiatives, you can now analyze and adjust your digital marketing efforts and feel confident that you are supporting your company’s most important goals.
As you work through these processes, it’s important to be transparent and clearly communicate your marketing activities to key stakeholders. Whether it’s to executives or with your internal team, your decisions must be rooted in the clean data you’ve collected and channel goals you’ve established. Breaking out sub-groups in channels, such as branded and non-branded paid search, allows you to start having conversations about their different behavior and lays the groundwork for setting up separate goals in the future..
Thankfully, you’ll all be using the same agreed-upon source of truth, so you can analyze the same information and results together and make important decisions accordingly.
Help Your Marketing Do its Best
No one know exactly what the country’s economic future holds, but the natural ebb and flow of the business cycle means that an economic downtown is inevitable. When it does come, you’ll want your digital marketing operation to be in peak form, so it can do what it does best: drive business and provide meaningful insight into broader industry trends. Then you and your company can weather the storm until the good times inevitably return.