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Co-Founder/CEO of Vujà Dé Digital, on a mission for conscious capitalism and reinventing the media agency model.
We are all walking through uncharted territory. Earlier this year, the majority of the American workforce became remote almost overnight. Then, we saw e-commerce spending from April to May surpass 2019 holiday season spending. At the same time, the U.S. unemployment rate climbed to its highest level since the Great Depression.
You might ask, where do we go from here? How do you ensure that you’re taking the right steps for business stability and growth? How do you ensure your marketing investments are being managed wisely and performing at the highest levels possible?
With market dynamics and the world as we knew it changing at warp speed, marketing has become more complex and critical to business success and survival than ever before. Retaining and acquiring customers is crucial for defining what your business will look like six months to six years from now.
What marketing strategies should you employ to foster loyalty with existing customers and gain new ones given the unpredictability of the market? Clearly understanding which marketing channels, audiences and messaging are generating the highest response and return on investment is a fundamental first step.
As stewards of the investment budgets for the brands and companies we serve, media-buying firms have a fiscal responsibility to act in the best interests of our clients. Many factors and variables are surfacing as we move into the second half of 2020 that will have a direct effect on brands, companies and agencies.
As was written for the Harvard Business Review, “During recessions it’s more important than ever to remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional — it’s a ‘good cost.'” Bringing in revenue from key loyal customers, earning their referrals and gaining other potential customers are the bedrock of financial stability. Without marketing, your relationship and visibility with your existing customers, along with potential revenue from new customers, will suffer. As the saying goes, “out of sight, out of mind.”
Consistent communication and authentic messaging are two of the best ways to reduce business risk. Building relationships versus strictly selling is critical to long-term customer and business success. In addition, tracking and understanding how your customers are responding to the market adjustment by reassessing their priorities and redefining value can have a measurable impact on your market stability.
Analytics and marketing campaign performance are areas of vulnerability for companies that can directly impact financial performance, and problems can arise during a down economy if they aren’t handled properly. A rock-solid understanding of either return on investment or return on ad spending, with analytics that are correctly measuring performance and not double or triple counting, is mandatory to reduce business risk.
We consistently find analytics issues, such as incorrect campaign tagging and campaign setup, for the underperforming companies or brands that come to us. Make sure your analytics are set up properly and are tracking marketing and campaign performance accurately.
Another red flag to watch out for and re-evaluate in a down economy is the compensation model you are under with your media buying partner. A flat fee or a percent-based media fee for media placement arrangements may not be in your best interest, especially in an economic downturn. For your own business stability, you may want to ensure that whoever is doing your media planning and buying has almost as much skin in the game as you do.
Performance marketing has been gaining momentum and interest since the latter half of 2019. With the need for business stability, risk mitigation and the benefit of guaranteed marketing performance, the appeal and value of performance marketing are unquestionable in a down economy.
While none of us have a crystal ball to see into the future, one thing is certain: Business, marketing and advertising will continue throughout and after this economic downturn. Be smart, be diligent and be prepared for the upturn when it happens. Those who are savvy and invest wisely during the downturn stand to gain the most when things start to climb back up again. Here’s to our collective resilience and success.
Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?
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