eMarketer reported this week that they expect the current recession will actually trigger an increase in search marketing spend through 2013. The spend is expected to increase in all four forms of search marketing including paid search, contextual ads, paid inclusion and finally search engine optimization (SEO). The argument for the increase in this type of ad spending is because companies have to focus on finding new customers rather than focusing on the retention of existing customers as a priority. Paid search is arguably the best way today to find new customers today. I would argue however that there are two flaws with this ad spend prediction.
First, I believe that companies need to focus just as much, if not more, on retaining existing customers during tough economic times. Companies just can’t afford to lose their loyal customer base right now. The focus they need to have on these existing customers combined with shrinking ad budgets, will, as a necessity, take away from spend on paid search.
Second, network effects that currently benefit paid search advertisers will eventually result in diminishing returns for smaller advertisers. As more companies pay for paid search opportunities on Google for example, it becomes more and more expensive, and more difficult to obtain the top or even second level paid advertisement spot. Evidence suggests that Google users usually only pay attention to the first or second advertisement they see which means anything below these spots is wasting their money.
Deciding where to focus marketing budgets during a recession is a tough question. The only answer that we know for sure though is that marketers will be under increased pressure to spend their marketing budgets wisely focusing on initiatives where results are proven. Where the spend happens remains to be seen.
No comments:
Post a Comment