Featured Author

: Scott Nelson is the COO and executive vice president of TruEffect. He has more than 23 years of marketing and client management experience with premium global brands in both online and offline environments. He is active within the industry with recent engagements that include presentations at behavioral advertising conferences and participation in industry working groups.

Prior to TruEffect, he led the Enterprise Account practice at MatchLogic where he was responsible for ensuring delivery and growing revenue with clients such as General Motors, Nokia, Radio Shack, Infiniti, Charles Schwab and TD Waterhouse.

How To Recession-Proof Your Campaign

Written on: June 19th 2008
Author: by Scott Nelson |
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ADOTAS EXCLUSIVE — With the demise of a Yahoo/Google paid search deal, Microhoo is officially “off”. One of the driving reasons Yahoo couldn’t come to terms with a transaction with Microsoft was its desire to maintain both a search and display capability as the two converge. There has been a great deal published recently about the need for search and display to play together. The latest and greatest analytics are attempting to measure “engagement”.

Most of us would agree this is the right thing to do, but too much of the dialog stops there. We all know consumers don’t navigate the Web in a tunnel, consuming each discrete piece of content or ad separately from the others. Interactions affect each other. Frequency builds on a message. Once a user recognizes they are “in-market” for something, they begin to consume advertising and navigate Web sites differently. The time has never been better to devote some effort to this. Consider these two facts about behavior during economic downturns: 1) Consumers have a tendency to shop more and buy less and 2) Advertisers aggressively seek even more efficiency in their media spend.

David McKenzie of Stanford University and Ernesto Schargrodsky of the Universidad Torcuato Di Tella wrote about changes in consumption patterns during a crisis. Their conclusion was that consumers cope with an economic downturn by working harder to find the best value for their dollar.

The current economic downturn is the first opportunity for us to see how the Internet will change the way consumers cope. Never before have so many consumers had broadband access to the Web, and never before have so many merchants possessed powerful e-commerce platforms able to conduct end-to-end transactions online.

eMarketer’s recent study on Multi-Channel Shopping concluded that U.S. consumers are increasingly using multiple channels to shop and buy. They predict that between 2007 and 2012, Web-influenced in-store sales are expected to grow at a 19% average annual rate. Online shopping used to be essentially an electronic version of a catalog. But today, you surf the entire Web researching and shopping flat screen HDTVs, then go to CircuitCity.com and have it shipped to your local store. No burning $4-per-gallon gas driving from Best Buy to Costco to Wal-Mart just to find a TV.

The second opportunity: advertisers are squeezing every drop of blood from their media dollar. Last week TNS Media Intelligence reported that display was up “only” 8.5% in Q1 whereas TV was up 1.7%, newspapers down 5.2% and radio down 4.5 percent. Advertisers are voting with their wallets that interactive is more efficient than traditional.

That gives us in the industry a chance to put up or shut up.

All this tells me that now more than ever we must consider the entire consumer experience from awareness and consideration (display) to shopping (search) to purchase (Web site) and back again to close-the-loop. Think of the process as a cycle, not a “path to conversion”. During a recession, your best customer is a current customer.

Retention and re-targeting have to be critical components in the mix. Try this – navigate to sites where you’ve purchased banner inventory. Then take some copy from the ad and enter it into a search engine where you have purchased search terms. See what comes up. Keep going by clicking on a (cheap) search term and landing on your Web site. Shop around the site and if possible buy something. Go back out to the Web and find more of your banner inventory and search media. Go through the entire process again and see what changed. If the answer is nothing, then you can expect to continue to get the same results you’ve been getting. If that’s good enough, then maybe there isn’t an economic downturn.

Reader Comments.

This is a good topic and was covered well. I believe this is the first time since the dotcom boom that the internet world has experienced such a downturn in the economy. It’s not the first time other media have experienced it.

Having gone through it before, there are only a few things the internet world needs to understand. One, the economy will come back. It may take a year, two, or three, but it will come back. Two, take care of your customers. Whether they are advertisers or consumers, make sure you look at what they are going through. If they are advertisers, don’t be afraid to renegotiate contracts to a lower level to keep them happy. Yes, that impacts your bottom line, but when the economy recovers, you’ll be the first person they look to when they reallocate their budget. Also, look at what is working more effectively and switch them to it, even at a lesser price. Don’t be greedy! You will build loyal clients. If they are customers, show how you care about them. Show them you have a better quality product that will last longer and perform better, or if discount is in your business model, stress that. Different consumers act differently to each situation, but both markets buy, even in a down economy.

Yes, you have to tighten your belt a bit. You may not have as big of an expense budget, or an expense budget at all, but make the best out of what you have and treat your customers/clients well. In the end, everyone will be back on their feet if you don’t panic.