Cutting optimization & online marketing budgets…. A wise choice?
There’s no doubt that the current economic climate requires certain cuts and pull backs especially as customers tighten their own wallets but does that mean you should be cutting your online budgets in marketing or optimization? While many out there have jumped up and say yes, stating that less consumer dollars necessitates less spending and less project development to save cash I’m not in agreement, and certainly not when it comes to taking big cuts and drastic steps.
There’s no doubt that the current economic climate requires certain cuts and pull backs especially as customers tighten their own wallets but does that mean you should be cutting your online budgets in marketing or optimization? While many out there have jumped up and say yes, stating that less consumer dollars necessitates less spending and less project development to save cash I’m not in agreement, and certainly not when it comes to taking big cuts and drastic steps.
Online marketing tends to be about direct response with branding as a secondary goal thus no matter how the market is doing, budgets can still be managed to profit and there’s no reason to change that. So instead of rushing to cut budgets for the sake of cutting budgets how about reviewing the efficiency of your campaigns? If you’re not already doing so, start tying your orders to each campaign, bring in discounts, shipping costs, gross AND net profits to your analytics and optimize your campaigns cutting what fails but investing in what makes a good return. And don’t be afraid to challenge your idea of a good return either; the 50% margin you made last year may seem mandatory but what does the business really need to cover overhead and turn a profit? Will 40% do? How about 35%? Be realistic, be data driven and watching things, there’s plenty of places to find results and probably a few to find more results than before.
Project work and “optimization” also seem like good areas to throttle back on at first glance. It saves money, reduces resources and allows the organization to become more profitable – but not only in the shortest of timeframes. With a concerned consumer comes a lot of shopping around and that necessitates having the very best experience; hiccups and UI issues will hurt more than ever. You don’t see major retail stores skimping on signage and displays for the holidays so why should your website? If anything now is the time to be putting money into making improvements. Now is the time when consultants are available at better rates, when developers and agencies likely have less on their plates and when you can improve things for less. Skimping out to save a few bucks may seem prudent in the short term but all you’re doing is lowering the odds that you capture what sales will take place. And let’s be honest here while there will be sharp declines in some verticals, most categories are seeing a few percent drop which means most of the orders from last year will happen again. You want those orders.
Of course this isn’t absolute. If you’re seeing the same spend but conversion rates are dropping on an optimized page while traffic remains the same it may be wise to throttle back just like you may want to hold off on building the very coolest dynamic checkout process in favor of something sleek, easy to use but a little more cost effective. Just don’t make the mistake of cutting back on profitable campaigns, analytics or optimization efforts. Research needs to take place, changes have to be made and campaigns that turn a profit should grow. It’s easy to blame the economy, scale back and call it “smart planning” but if you aren’t putting your best foot out there to pick up the sales that will come I don’t call it smart, I call it missing opportunity.
