Corporate budget cuts during recessionary environments are often felt first by advertising initiatives, leading to an increased scrutiny on performance-based metrics such as return-on-advertising-spend.
From a ‘instant-gratification’ standpoint, Search Engine Marketing, specifically Paid Clicks/Placements, is capable of delivering near real-time results. As a result, it is a useful tool for driving incremental leads and sales, at the exact moment the need arises. However, from a performance standpoint, SEM will likely see a decrease in ROAS in 2009 as consumers maintain search habits (causing the available keyword inventory to remain stable or even increase), but reduce discretionary spending (causing the conversion rate to decrease post-click). Consequently, the effective performance of SEM for many Advertisers will be negatively affected as the economy continues into the recession.
On the other hand, Search Engine Optimization is a marketing strategy that requires patience, as successful SEO Campaigns may take months to find traction and deliver meaningful results. However, other than personnel costs related to the initial design and maintenance of the SEO-optimized site copy, there is $0 incremental ‘advertising cost’ that need to be incurred as time goes on for every incremental lead/sale delivered.
As a result, corporate decision makers will likely place a greater emphasis on the balance between SEM versus SEO in 2009, since while the instant gratification provided by SEM may be tempting, a balance between SEM and SEO will deliver a stronger ROAS performance that will be welcomed during the recession.
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