Digital marketing always needs a plan, be that a “flimsy blog posting content marketing strategy” or a full-blown multi-million pound Google search ads campaign. As we enter into a new period of socially distanced and way of life changes, we thought at nixxie, we better have a plan for our clients and publish our view on where digital marketing will end up in December 2020.
Firstly, we need to set the scene, we will not be covering in detail what went before back in 2019. We only need to understand the changes. So what has changed?
Average CPCs have dropped during COVID-19
But not in every industry..
CPC is a good metric for measuring marketing activity. We can use this to measure volume and volatility, this metric also translates across other mediums very nicely.
Some industries are seeing vastly lower CPCs as ad competition declines. Obviously we notice, restaurants in particular and overall hospitality sectors are seeing the biggest decline on all mediums search, display, social, content and organically. Partly due to flipping to take away services or shutting down altogether.
Meanwhile, many professional services are noticing increased competition. This stands to reason, how can you reach these customers? Well, the majority of customers have more time on their hands, are at home and are consuming digital content at a faster rate than ever before.
Average CPCs vary by source during COVID-19
Some sources are costing more..
Digital marketers like nixxie used to think we were all on the cutting edge of the fastest-changing marketing environment of all time for the last 10 years. Little did we know, online advertising would change at a faster rate over the last 10 weeks than we could comprehend.
Many of the changes we’ve seen over the past few years have either evaporated or become powerhouses! Remember that “ancient” adage from January 2020? 80% of searches happen on mobile devices and it’s increasing all of the time? Well, that has reversed! In the last 7 days, our data amassed from ourselves and clients have seen pretty much a 50/50 split between mobile and desktop.
Now, to really mix things up, we all know that Facebook is broadly consumed on mobile devices, right? and if mobile traffic has contracted, how come our clients are seeing an increase in Facebook traffic and at a higher price? Here are a couple of clues. Intent and massively increased volume. If we remove the hardest hit sectors from the equation the rest of the market looks like this:
- CPC on Facebook has increased
- CPC on Bing has increased
- CPC on Google Search & Display has decreased
- CPC on native has increased
So how can the overall CPC decrease if most of the markets have an increased CPC? The answer to that question is lurking in Google’s pre-pandemic dominance. With everyone’s workload decreasing and cheaper forms of traffic available to test, it has forced businesses into markets they probably didn’t give much attention to before.
Average daily budgets have dropped during COVID-19
Companies decided to hold cash..
When a market is uncertain (and we injected a whole heap of uncertainty this year) businesses reduce costs and they reduce them quickly. You can imagine the board rooms in early March, “stop all advertising”, “furlough everyone”, “we need to tighten up until this is over”.
We saw this a lot with our client base, we had an endless stream of emails stating that they were pausing, no consultation, no digital strategy. It was dog eat dog out there. I have no problem with this, it’s business after all and all businesses are different. They each have different levels of funding, brand strength and even ability to function under government restrictions.
So budgets plummeted!
However, in the face of uncertainty, we had one client that embraced the market changes and asked us to come up with a strategy to improve brand affinity. We did, they went for it, the results have been great, they have an increase of 390% for brand engagement.
Budgets tell us what is increasing and falling during COVID-19
So who is winning and losing?
93% of advertisers are finding success with a smaller daily budget. It has been a time to really reduce that CPA! It really is easy to reach your CAC goals if it is not clouded with a relentless push for volume. Obviously, Technology (Computers & Consumer Electronics and Internet & Telecom) sectors have increased their campaign spending to compete. It seems everyone wanted a better home office setup with the increase in online meetings. So who really suffered? Travel & Tourism and any business that cannot provide a service at a distance. These sectors really didn’t have many options but to pause marketing.
In a nutshell, that sets the scene. We are now approaching a relaxation of lockdown in many countries. The question arises, what should we do now? Let’s look at this as a 3 phased restart. We will split the phases down, what to do right now, the next few weeks and the rest of the year. We have approached these stages from 2 angles, those that never transact online, those that only transact online. For those that are a mixture hopefully, both sections will be of use to you.
Phase 1 – What to do right now
No previous online business/marketing
If your business was not “online” it should be. You may have always transacted and found clients via word of mouth or you have built a very loyal customer base and you do not need to uncover new clients. That’s great, unfortunately, however, not all of these businesses will survive 2020 and you may need to acquire new clients. These new clients are likely to become more digital-friendly out of necessity recently.
Actions:
- Get an online presence
- Run small ad campaigns to test the market
- Create social media channels and pages
We only transact online – we have no physical storefront
Everything that went before is unlikely to be the same today. This sounds like the usual investment disclaimer: “historical performance is not an indication of future performance”. If you are a B2B business consider if the type of business you sell to will need a message change and try to evaluate if their market will be stronger or weaker in the next few months. If you are a B2C business that stopped marketing you need to be thinking about branded advertising now. Many consumers are just waiting to pull the trigger on holidays, house moves, car buying etc.
Actions:
- B2B – Contact your clients and ask them how they are doing
- B2B – Formulate your exit strategy and share this detail with your clients
- B2C and you stopped marketing – Start brand advertising now
- B2C and you stopped marketing – Publish content on how your company will restart
- B2C and you stopped marketing – Share the above content far and wide
- B2C and you stopped marketing – Run test ad campaigns to measure CPL differences
- B2C and you increased marketing – Evaluate if your current CPA is sustainable
- B2C and you increased marketing – Plan to target customers of competitors that will struggle through 2020
Phase 2 – What to do in the weeks after lockdown has been relaxed
No previous online business/marketing
Content consumption is likely to decrease as people take short term advantage of being able to see friends and family. If you have followed the actions from phase 1 you should move forwards with branded campaigns. It might seem counterintuitive to actually pay for traffic to your website when people are clearly searching for your brand. However, if you do not do this other advertisers/competitors will be bidding and trying to acquire your customers.
Actions:
- Create a branded PPC campaign
We only transact online – we have no physical storefront
If you are in a service-based business, likely, your pipeline is drying up and the effects of lockdown are going to be felt for some time. You can mitigate some of these effects by following these points:
Actions
- Both – Contact your clients and let them know when you expect to reopen
- Both – Solidify a marketing plan for the next 6 months
- B2C (stopped marketing) – Start brand advertising and search intent with a “taking bookings from x/y/z”
- B2C (stopped marketing) – Publish content on how your company will conduct itself post lockdown
- B2C (stopped marketing) – Share the above content far and wide
- B2C (stopped marketing) – Get back in the market quickly to take full advantage of other business that are still “closed”
A special mention for domestic tourism companies, May, June and July are going to be brutal in a fight for top dog. The market has almost reset and those that were smaller before have almost a level playing field to make it big. Certainly not for the faint-hearted but a real opportunity nonetheless. We have some great thoughts to share on this subject so get in contact if it applies to you.
Phase 3 – We are out of lockdown what can I do to maximise my business at the end of 2020
No previous online business/marketing
Now is a good time to evaluate what sales or impact increased online presence has brought to your business. Marketing your business digitally should be part of your ongoing future. You should be easily able to evaluate its performance and begin formulating your plan for 2021
Actions:
- Performance evaluation
- Formulate 2021 strategy
We only transact online – we have no physical storefront
You have done your brand marketing and have successfully navigated the restart. Your business went through a lot! It may feel like a good time to pat yourselves on the back and you should, but do not slow down. Many marketplaces will have fewer players and it’s a land grab. Do not miss the boat!
We fully expect to see marketing budgets increase by almost 40% compared to the backend of 2019. Some businesses may have saved cash through the first half of this year and even with decreased competition in terms of the number of advertisers we expect CPC’s to increase with the remaining bidders.
This will reflect on all forms of digital marketing and not just for SEM activities.
What can you do?
Actions:
- Discover your absolute maximum CAC and SPEND it, you cannot buy brand value and referrals without clients
- Partnerships, how can you support other businesses in other sectors and build those backlinks
- If you were a top 10 player before, that is not guaranteed afterwards. Evaluate your position using a share of voice study or social listening
- Refresh your display campaigns, likely, they have been seen a lot. It’s time to get some fresh ones out of the door
- Messaging changes everything. Think about which brands reached you during the worst of the pandemic and how that made you feel. Replicate the good ones!
A little more on the last action point. Captain Tom Moore is a hero, that much is clear. However, has his extraordinary fundraising campaign had a positive or negative impact for Just Giving? On the face of it, they are a website that enables easy fundraising transactions for charities, what’s not to like?
Now though, people have had many discussions on their fees, the management salaries, how they should waive profit. There is “fake news” floating around Facebook and all corners of the internet. They are a brand that has benefited greatly and at the same time have faced scrutiny.
If you would like to discuss any of the topics in this article, please do get in contact.
