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Credit Crunch and Search marketing
There’s never been a better or more appropriate time than now for organisations to review and realign their advertising and marketing spend. Measurability and ROI are the twin pillars upon which the UK Search Engine Optimisation (SEO) and Pay per Click (PPC) service industry rest – powerful features that can help flow marketing and advertising budgets away from more traditional off line media with their harder to define measurable benefits.
As a business overhead, the marketing function must start to link its performance directly into the bottom line and stop measuring itself against non-tangibles such as brand awareness. They must be able to show a clear ROI and demonstrate to the rest of the company that their activities can return real results.
Despite the sub-prime lending crisis and credit crunch induced tales of doom and gloom, the Internet is proving an upwardly mobile channel to market, particularly in the UK. Figures recently released by Mintel, show that online sales in the U.K. reached $25.4 billion last year - around $5 billion ahead of nearest rival Germany. Next came France with $11.1 billion, followed by Italy ($1.7 billion) and Spain ($1.6 billion).
The UK also boasts the highest rate of growth in online sales. According to the research, the UK online retail market grew by 75% between 2005 and 2007. Further growth of 199% is predicted by 2012. Of course, it’s sensible to acknowledge exceptions to this positive trend with some industries likely to cut ad spending. Many banks, hit hard by credit crunch losses are already rethinking budgets. Makers of cars, luxury goods and other dispensable items are likely to be more exposed to a recession than companies that sell necessities.
That said, the sheer competition in the financial sector even post-crunch, is likely to see advertisers continuing to compete hard for the available online inventory. Financial companies working hard on profile and reputation management as well as using highly targeted search engine optimisation to deal nimbly and efficiently, delivering information on relevant products speedily and effectively. The body count amongst sub-prime products and lenders now also clears the way for more stable and traditionally attractive companies and products to start to re-emerge at the top of search result listings.
With the ever increasing numbers in online spend, especially in the UK it’s hardly surprising that the Internet already claims an increasing share of advertising at the expense of traditional media, such as TV and print. What is encouraging for online advertisers is the potentially revenue rich gap between the time people currently spend online as a proportion of their media consumption (about 20%) and the fraction of marketing budgets spent on the internet (about 7.5%). The current economic downturn actually offers many opportunities for companies to not only sustain but to increase Internet advertising. Search advertising incorporating organic search engine optimisation and pay per click (PPC) campaigns proving the most effective.
Where online advertising might not fare so well is in the online ad market. More than three-quarters of American consumers when recently surveyed by consultancy Deloitte responded that online ads were more annoying than those in print. Concerned about their privacy, users have also started to lobby against online tracking of sales, which is a vital element of the Internet’s undoubted effectiveness. Again, the turn away from ad marketing will open doors for search engine optimisation specialists and PPC companies to drive strategy, traffic and ultimately profits to their clients.
- Mediarun Search limited, April 2008
Related Articles:
Search Engine Marketing Shows Strength as Spending Continues on a Growth Track against Doom and Gloom Economic Background – SEMPO
UK search marketing spend on the rise – Net Imperative
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