Marketers have always felt the pressure of justifying budget and costs; however, this time, it is a whole new ball game. The impact of the pandemic on the majority of businesses will cause a massive cut in costs in the marketing budget if they have not done so already in this financial year and the next. Understandably, companies must cut back on expenses during difficult and uncertain times; however, marketers must know when and where to cut costs, starting with top-of-funnel ad spend.
Knowing where to invest your marketing budget
During these uncertain times, advertisers may look at other businesses’ to get an understanding of what they are currently doing, this can inform you what you need to cover in your ads and what white space might help you stand out during these times. However, basing your marketing decisions on how much and where they are investing their money will most definitely lead to a harmful outcome. Every business varies, from cashflow, diversity, strengths, and these will indicate what ads, budget and performance standards they choose.
Cutting costs may seem like the worst thing; However, it just means that the current approach needs to be analysed and adjusted according to where ROI is the highest. This way, the business can save a little more money without harming itself in the long run.
A start is by looking at the data trending; this goes beyond ROAS on each campaign and even channel. Buyer behaviour is consistently changing, especially now, and this does not necessarily mean a bad thing. Some trends may be apparent, but many are not, and it requires a little digging to find your opportunity. Other opportunities may arise from listening to your consumers’ needs and how the changing market has impacted them. Being able to pivot your current business practices and adjusting them to suit consumers’ needs can shift demand. That does not mean there will be less demand; it means you must highlight your products or services opportunity.
It is essential to set goals and measure the outcome for prospecting campaigns to evaluate whether the result will help you reach your goal. Each channel must be held accountable concerning its position in the funnel. Prospecting ROAS will almost always see a lower click-based ROAS than campaigns at the very bottom of the funnel. However, if prospecting performance is consistent or has increased compared to pre-COVID, then you have a reason to keep it running.
Buyer behaviour is continuously changing, and it is beneficial if advertisers take a step back to analyse whether their messaging is partly to blame for the decline in ROAS performance. You must ask yourself whether the message is still relevant or if the image and copy choice is turning potential consumers off.
During these uncertain times, marketers must consider whether their spending is justified and profitable. Many businesses must reconsider whether they should continue to invest in top-of-funnel ads, whilst very few should discard it altogether. When companies cut costs, it requires marketers to analyse further where ROI is the highest and spend money only where it makes sense. Now is the time to understand this information and to begin preparing for the budgeting conversations which are bound to take place.
If you are looking for a way to improve your digital marketing strategy, we can help.