Economic Contraction & Interactive Marketing
Frak!! It’s getting tough out there, Apollo.
The economy is shrinking faster than the supply of Guinness in Ireland on a Saturday night. Economic cycles are typical, but this is something different, this looks more secular than cyclical - which means it probably won’t have a “V” shaped recovery and could continue for a while.
Which makes interactive/digital marketing a more vital business tool than ever.
The game has changed - and cost-effective ROI is even more important than usual. Interactive/digital marketing is simply the most cost-effective way to:
- Develop a profound understanding of what customers and potential customers want.
- Build customer relationships with by giving them what they want, such as useful content.
- Deliver a specific sales message to them.
A survey of of 175 CMO’s and marketing execs by Epsilon in August reports the following:
NEW YORK, NY — September 8, 2008 — Chief Marketing Officers at many of the biggest brands in the nation are seeing a major shift in the marketing landscape. Almost two-thirds (63%) of the 175 marketing executives surveyed see an increase in their spending on interactive/digital marketing while 59% report a decrease in traditional marketing spend.
The survey additionally describes the tough challenges that top CMOs face in this current economic climate: 65% say that the money spent on advertising as a whole will decrease due to the current economy. In contrast, 94% of CMOs and marketing executives agreed with the statement, ‘A tough economic period is precisely the time when marketing plays a key role.’
A contracting economy creates a demanding environment. It obviously makes it challenging to build revenues in an absolute sense. In an expanding economy the pie is growing larger and all you have to do to increase revenues is to maintain market share. Conversely, the pie gets smaller in a contracting economy and market share has to increase in order to maintain revenues.
Which makes it more important than ever to continue to play on offense as well as defense. It’s hard not to be affected negatively by the continuous doom and gloom and many businesses react by adopting a totally defensive stance, which is understandable. It makes sense to budget carefully and conservatively. But those that there are nimble, those that dare to continue to play offense, have an opportunity to build brand awareness, defend market share - and build customer relationships. Interactive/digital marketing gives those brave souls a excellent way to do so while remaining cash flow positive.
It’s one thing keep playing offense - but it’s another to be reckless. In a poor economy it’s more important than ever to be careful about how a marketing budget is deployed, to create the highest possible return on dollars spent. In a time when back-end results and matter more than 
front-end sizzle, interactive/digital marketing is an arena where results can be tracked and tactics fine-tuned. It’s an effective way to play offense, and to do so in a careful, accountable - and profitable - manner.
It’s undeniable that significant economic challenges lie ahead. But change always creates opportunities for those who adapt quickly and wisely. One way to adapt is to fully utilize the power of interactive/digital marketing. Another is to stock up on Guinness. They both loom large in my plans.
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