Living in a CrisisTime keeps on slipping by. We’re living in a time of social and economic upheavals. We have all acclimatized to the difficulties navigating the limitations put on daily life by the coronavirus. Governments have unleashed a flurry of capital injections and funding initiatives, many of which are geared to safeguard businesses with access to capital markets, leaving SMBs to face troublesome times alone. The evolving landscape is bringing certain challenges to the forefront. The question of how to advertise, what to advertise, or whether to advertise at all, are among the greatest quandaries facing brands today.
Shutting Down vs. Perseverance or even AmplificationHow do we prepare for the long haul? What is the right course of action? Marketing budgets may appear to be an easy target for struggling businesses looking to make spending cuts, but empirical evidence clearly states that a cut in marketing activity is a short term fix that is sure to have long term repercussions. There is a reason why everyone from entertainers to business personalities to athletes to your favorite bakery to that niche candlemaker you order online from appears to be all over social media at the moment. Maintaining visibility in your market is essential for long term profitability and continued investment. In 2008, Millward Brown shared evidence that 60% of the brands that went dark during an economic downturn saw brand use decrease 24% and brand image decrease 28%. Kantar further estimates that brands that go dark during this recession to save costs will see a 39% reduction in brand awareness and delay recovery after the novel coronavirus, and only 8% of the 25,000 consumers surveyed said that they believed that brands should stop advertising. The Institute of Practitioners in Advertising also produced a study in 2008 that backed up these findings, stating that “Following a budget cut, a brand will continue to benefit from the marketing investment made over the previous few years. This will mitigate any short-term business effects and will result in a dangerously misleading increase in short-term profitability. The longer-term business harm will be more considerable, but will not be noticed at first.” The report also highlighted that “A brand judged to be on the way down, because it has fallen silent, will very rapidly see this manifested in word-of-mouth, which will accelerate the perception of failure.” One study looked at 600 companies during the 1980s recession. It showed that those that maintained or increased their advertising spend during that period had sales that were 256% higher than those that didn’t. It seems that going dark is no way forward. The studies and reports say perseverance in an economic downturn results in greater survival over the short-term shutdown. What we need is the opposite of the suspension of operation and even, amplification. In the end, focus on sales that lead to added revenue heals most wounds.
De-Risking Marketing SpendStill, the decision to continue marketing in this environment is a conundrum for most businesses: How do I fund it? Who will run it? Will they generate sales on a performance basis? Advertising can be daunting when you can’t predict how many customers will buy. We know that, with limited resources and a fast-changing environment, a return on ad spend (ROAS) is paramount and a unique approach to digital marketing is necessary. Too often businesses have to provide a budget to an agency or in-house specialist, with very little information to suggest what the return in sales might be. It is a rapid and dynamic setting. With the advent of digital marketing and the dominance of digital platforms, namely Google and Facebook, certainly, there is a performance-driven solution to market online. Performance marketing is attractive, but many agencies operate with high fees and stringent obligations that rarely generate continual growth in multiple markets. What businesses need is a partner aligned with their risk and their aspirations. Now is the time to think outside the box.
Choosing to DRVEDRVE is not an agency or a venture firm but a new hybrid investor. We combine capital with internal expertise to fund and run paid marketing budgets to generate online sales growth. Our partners benefit from our data-driven approach, automated systems, and our team of experts, that together create an actively scalable performance. High fees or budget limitations should not be prohibitive for online ready businesses big or small.
Different from the rest.Businesses that have partnered with us think of DRVE as an extension of their digital marketing team, as a self-funded entity focused on paid marketing, interfacing with all digital marketing aspects that drive online revenue growth. While an agency needs a budget to work with or a venture firm requires a board seat, we align ourselves with our program partners to deliver actual gain and actively seek new avenues to sustain that growth. We operate on a continuous basis, where our programs are repaid based on tracked online monthly sales and reinvested to compound growth.
A vested partner.As a stakeholder in your revenue gain, DRVE actively helps you to expand and acquire growth and as budgets perform, we renew or scale to meet your goals. You’ll have access to our marketing reports, analytics, and data. Primarily, you’ll have the money you need for a healthy long-term strategy during this economic crisis but secondarily, you’ll get some much-needed relief. You’ll have time to concentrate on product production, operations, customer experience, social media, PR, logistics, and future offline activities while we pay for, run, and acquire online sales for you.
A RecapWe all have a common foe in COVID-19, the response is on a different level to anything we’ve seen in previous recessions. Everyone is coming together to build a global community and businesses can and should do the same. Sales are key to survival, long-term solutions are what we need. For more information on eCommerce in the time of corona check out our breakout article Navigating eCommerce in Uncertain Times and our follow up News Room arrival Ecommerce & The Hero’s Journey. These combined with this blog post are a set that completes our compendium on how to survive and even thrive through global upheaval. We also recommend these articles on the subject:
- Performance Marketing in the Coronavirus Downturn
- Preparing your marketing plans for the Coronavirus downturn
- ‘It’s the recession on steroids’: Why brands need to think long-term amid the coronavirus pandemic
- The History Of Advertising In A Recession
FinallyThe next few months will most likely get worse. The only sensible course of action for any business that wants to maintain a presence through this recession is to put money into long-term brand building. It is clear that for those companies that can afford it, continuing to advertise through the crisis will be key to recovery and abiding growth. Use our capital and expertise to preserve and strive for your success. DRVE’s performance-based and data-driven approach delivers online sales that take businesses to new heights. For now, I’ll leave you with this quote:
“Never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” Rahm Emanuel, Former US Presidential Advisor to Obama and Mayor of Chicago