Published on February 10th, 2021 | by Bibhuranjan0
Marketing Budget Cuts? Making the Most Out of Limited Funds.
Covid-19, and in Europe, Brexit, have led to recession fears and marketing budget cuts across the board. But how smart is it to lower your investment in the soul of digital sales? And how do you get the most out of the slimmed-down version of your marketing department?
Furloughs, closures, higher online competition as physical stores slowly fade away after more than a year of restrictions…even with vaccination programmes underway, how optimistic is your business for 2021?
Gross Domestic Product statistics are down by 0.5% in the EU during the fourth quarter of 2020; a -4.8% difference in results of the same quarter of 2019. Of course, these losses are due to Covid, and although the EU’s fourth quarter of last year was decidedly better than the third (+11.5% better), suspicions of a lengthy recession continue to grow.
In the UK – no longer part of the EU – the story is only slightly different. While 2020’s second quarter slumped to -19.8%, recovery to just 7% below pre-Covid capacity was reported in November. However, the new strain of the virus and current import and export red tape as the island continues to break ties with the mainland is predicted to bring the UK another rollercoaster ride.
The US experienced an overall 3.5% reduction in its GDP in 2020 – its worst year since 1946. While in China, the economy has reinstated itself as one of the top economies as its GDP rose by 6.5% in the fourth quarter of 2020 thanks to its position as an export hub.
With such unpredictability, many businesses are making significant cuts across the board. Those in the healthcare, protective equipment and pharmaceuticals sectors have few of the fears other sectors are having to contend with. From transportation services to luxury goods, the future of physical and online commerce remains uncertain.
Optimism – Overrated?
Even so, no blog, newspaper article or TV news show seems to be reporting complete doom and gloom. While we can’t look into a crystal ball, signs of improvement are already here. International vaccination drives are ‘go’ and the expectations of the UK coming to a complete standstill after Brexit are fading. Even unemployment figures don’t seem to be as bad as predicted. Even so, the word ‘budget cut’ is heard at regular intervals in our virtual meeting rooms.
It pays to be conservatively optimistic, of course. No-one stays on a sinking ship. But to what extent should we be optimistic? Is it time for travel agents to open their doors for holiday bookings? Or event organisers to start booking up acts? As we wait and see – because there’s very little businesses can do to change when local, national and international restrictions end – how far do we let optimism or pessimism affect our marketing strategies?
Expensive Marketing Strategies
If a marketing strategy requires high investment but brings great returns, it is cheap. After all, we don’t judge the price of a campaign in investment terms but in returns – ROI. But when your business is struggling, finding that initial investment isn’t always easy. And you won’t be able to figure out the true ROI until that investment has been paid.
Being optimistic and being clever are two separate things; being able to predict the future is a different topic altogether. For many companies threatened by the upheavals of 2020 and unsure of the effects of 2021, gambling – however good the odds might seem – isn’t a viable option.
In addition, time is not quite right for word-of-mouth brand building. Covid has pushed practically every business into every marketing channel. It is too competitive to rely on something as unpredictable (but effective) as word-of-mouth advertising without multiple backup strategies. Most businesses are taking up space within a whole range of marketing channels. Without a healthy, innovative (and potentially expensive) campaign, startups simply cannot compete. Even established businesses must continue to invest in carefully-created, multiple-channel marketing campaigns.
Probably the least budget-friendly marketing strategy is the part that pays salaries and/or agency fees. Glassdoor tells us that the average marketing manager salary in the US is approximately $65,000 a year. While removing a manager that does not perform should be part of any business strategy in the same way as this applies to all consistently underperforming members of staff, making budget cuts at this level is ill advised. An existing manager knows the capacity of your budget and will (usually) work within its limits. The additional learning curve of a new senior member of your marketing team is not free. Making the decision to turn to third parties instead of continuing with an own marketing department should not be taken at this time.
On the other side of the coin, startups have the advantage of making this choice at an early stage. Hire one’s own staff or work with an agency? Whatever your choice, skimping on the quality of your marketing team will reduce your chances of competing in a saturated market. As your customers are already well aware, you usually get what you pay for.
Which brings us to the topic of expensive marketing channels. Or rather, the marketing channels that have the lowest ROI. Research from Databox shows that, in 2020, the highest ROI came from content marketing and SEO – almost 20%. Second in line was email marketing at just over 15%. Close contenders for third, fourth, fifth and sixth place were organic social, paid search, paid social and referral channels.
What is not calculated is the level of investment necessary to achieve that 20% ROI. Competing for popular keywords and continuously analyzing and amending content and reactions to that content requires investment. SEO marketing is expensive in the short-term and cheap in the long-term – when done right. If you want your business to last, you cannot ignore these longer-term but higher-return investments.
The above-mentioned channel statistics are also not business-specific. And this is where the costs can be cut. Spreading your business thinly through highly appropriate and less appropriate marketing channels is perhaps a strategy for a better economic environment or a trusted brand with a loyal following. For other businesses during this economic rollercoaster, selecting a mixture of the most effective and the least competitive channels may be a more budget-conscious choice. An email marketing campaign for a business that focuses on its social media presence would not enjoy the same rewards when implementing SEO and email campaigns as it would using organic and paid social and referral channels. If your marketing department hasn’t done the legwork and analyzed the healthiest choices, now is the time to start.
Cheap Marketing Strategies
Cheap marketing is definitely possible and results usually cover the low costs. Publishing a regular blog or posting dependable, informative posts on social media accounts (with hashtags) combines 2020’s and 2021’s interest in social media and expectation for high-quality, relevant content. If you hire top-spec content writers, it might be worth repurposing their work to suit different platforms – LinkedIn and Pinterest, for example – rather than paying for separate pieces. If you write or produce your own written, video or audio content, there is no excuse. Put aside time to create and curate authoritative, regular, unique content that serves your visitors, users and/or customers.
Email marketing campaigns focus on existing users or those who have already shown interest in what your business has to offer. For startups and those with limited outreach, such a campaign should follow a traffic drive – have you ever thought of trying out a paid web traffic campaign?
Website traffic for sale providers make up another cheap marketing channel that has more than one function. Increased traffic to your site means more data, greater brand awareness, and an opportunity to test multiple niches. In terms of cost, paid web traffic is one of the cheapest strategies available.
This traffic type should never be seen as a stand-alone campaign – one of the reasons it has received bad press in the past. But by combining paid traffic with another channel – a new social media-based product launch, a customer reward, or a sign-up competition, to name but a few – numbers definitely count.
With paid traffic, you order real visitors. Reputable providers like Web Traffic Geeks and Ultimate Web Traffic guarantee human traffic from a broad selection of target niches. Make sure you analyze the data these large numbers produce; you may discover less obvious but very interested niches that should then be targeted with your high ROI strategies.
Anyone can be a video director if they have access to a smartphone and businesses are no exception. There is hardly a need to hire professionals if your marketing budget doesn’t allow it. Background and intimacy level should match your customer type. A bright, animated background with a hilarious presentation from a local, politically-incorrect celebrity is not the way to go if you manage a funeral home.
Traditional advertising routes are often thought of as expensive but can be quite the opposite. Radio stations might offer an opportunity to talk about one or more aspects of your business and impress listeners with your level of authority. Newspapers – especially local ones – are worth contacting with your business-related stories.
But in terms of ROI, the two most expensive investments end up being the cheapest over time; content and SEO. This is where the majority of your budget should be focused. Both channels are long-term strategies that also benefit from all of the investments you make in cheaper channels that most often offer shorter-term gains.
The Future is Bright
The economy will pick up. It always does. The former financial crisis of 2007 – 2009 was harshly felt in the US and to a lesser extent in Europe, but Australia suffered no effects and enjoyed uninterrupted growth. Businesses who deal globally have the advantage of being able to pick from both financially affected and non-affected regions. Personalization allows us to cater for different situations and environments; the rise of deep learning technology consistently shows us where we can improve.
The future of online business is bright. Optimism within our sector is justified. While cutting your marketing budget is not recommended, selecting the correct combination of strategies is.
Shifting your investments to produce the highest ROI is nothing new. It has and always will be commerce’s principle strategy whether we are stuck in the middle of a recession or not. The trick is to at least keep up (preferably move ahead) while keeping your finger on an analytic pulse.
Photo by Kaleidico on Unsplash