The Weekly Wrap – Craig Johnson, Rippleffect
I’m still reeling from the blast effects of global economic implosion, not feeling entirely soothed by Mr Darling, and starting to picture the recession as a weapon of mass destruction impinging on every aspect of my life. It feels like the credit crunch is to blame for everything from cancelled trains to a disputed penalty appeal!
Then ‘The Times’ columnist Anatole Kaletsky pointed out that J. K. Galbraith, the author of The Great Crash 1929, once said that there are two kinds of economists: those who don’t know what will happen in a depression and those who don’t know they don’t know. I place myself firmly in the first camp (and I’m not even an economist).
In these uncertain times the best we can do is focus on the facts, rather than trying to predict what’s going to happen over the next 18 months or so.
So what do we know? That budgets are being slashed and reports reveal advertising spend is at a nine-year low. We also know that in recent years the digital sector has experienced tremendous growth and during an economic slow-down the web becomes invaluable.
We also know traditional advertising is suffering but that companies are refusing to reign in their digital spend – precisely because online marketing is ROI focused and measurable, with pay-per-click, analytics and healthy search engine volumes helping to justify spend. Henry Ford, who I like to picture having a pint with JK Galbraith, famously knew that 10% of his advertising worked, he just didn’t know which 10%. Unlucky, Henry!
The accountability and ability to track and measure makes digital very attractive in a recession. Search tools are increasingly used as consumers look to the internet to source the best and most competitive prices as they look to reduce spend. In the current climate, with shoppers looking around more online, it becomes vital for companies to have that space and squeeze every penny from each transaction.
The rationale for investing in digital can also be based around a brand's target audience. Many brands haven't touched digital because they're predominantly TV-based advertisers. But the landscape is changing as they find their audience is spending more time online.
As a digital marketer it’s important to recognise that while the argument to spend online is a good one, it’s critical the consumer’s behaviour is recognised and appropriate tools are applied to reach that consumer.
Otherwise, quite frankly, you’re back in Henry Ford territory. And what kind of fool would waste 90% of spend in a recession?