COVID-19 is hurting some companies, while others are making more sales than ever before. Alphabet (parent company of Google) commented in the Q1 2020 financial report: “While users’ search activity increased, their interests shifted to less commercial topics. In addition, our advertising revenues were negatively affected by reduced spending by our advertisers in response to the macroeconomic impact.”
Those numbers tell part of the story. That’s why we reached out to a few digital advertisers to ask for their perspective
To Pause Or Not To Pause, That’s The Advertising Question
With people stuck at home, there is a lot more time to engage with social media. As a result, some advertisers have decided to shift their budgets to social media.
“Spending on ad channels like Facebook, Instagram, and Twitter have increased because other ad budgets have been refocused on social media,” comments Isaac Hammelburger, founder of SearchPros.co. That’s why ad costs may not fall as much as you might have hoped. For example, companies who had planned to spend advertising dollars at events and conferences still need leads, so they are moving more of that budget to online advertising.
Other marketing firms paused advertising and focused their efforts on other marketing channels. “When it comes to advertising, our agency has been spending significantly less than ever before. However, we have invested heavily in our local SEO campaign throughout our website. The Google algorithm doesn’t stop, even during a worldwide pandemic. We did this because we wanted to come out ahead for the future,” says Brett Prentiss, co-founder of Instinct Marketing.
While some advertisers kept up their campaigns, others took a different approach. “I stopped digital advertising in April because I noticed a problem. There was increased activity in terms of engagement. However, conversions were falling, so it made sense to pause the campaigns,” commented Bruce Harpham, a content marketing examples based in Toronto.
Blink and You Missed It: The Fast Dynamics of Digital Advertising Costs
Unlike billboards and print media, digital advertising costs rapidly shift because these platforms rely on auctions. If you were expecting lower digital advertising costs for the rest of 2020, you might need to rethink your advertising budget.
“RPM’s have been significantly cheaper these past few months during the heat of the COVID-19 lockdowns. In particular, ads focused on brand awareness goals became much cheaper. Now RPM’s are back on the rise, so it is getting closer to the old, more expensive ad rates,” says Stacy Caprio, founder of Accelerated Growth Marketing.
Other advertisers found skyrocketing costs in digital advertising to be a significant challenge. “The cost per lead on LinkedIn before the quarantine was around $12. Now, cost per lead has reached $60 on LinkedIn,” explains Romana Kuts, PR & Communications Manager at GTM Plus. However, Kuts didn’t let those costs prevent her from using online advertising. Instead, she moved to Facebook advertising and achieved great results!
“Three months ago, I couldn’t find any leads on Facebook because the CPC was just too high. However, a few days ago, I set up a $100 campaign where I generated six leads at $16.6 each,” Kuts explained. Her approach reminds us that digital advertising platforms react to crises differently. If you suddenly lose results in one advertising platform, view this as an opportunity to move your budget elsewhere.
Broader Changes In The Digital Advertising Ecosystem
Despite rising unemployment and millions of people seeking relief programs, there have been a few bright spots for advertisers. Consumers are looking for hobbies, home comforts, and ways to live their lives safely at home.
Enter Matthew Burke, editorial director for Complete Guide To Archery. Usually, his business sees a lot of seasonal variation over time.
“Over the last twelve weeks, stores in all fifty states have either been forced to close, or been forced to limit the number of customers they can service dramatically. This has driven all of those customers online, looking for options that can be shipped directly to their homes. You can count on that sort of spike in online purchasing during the holiday months, but it’s very rare for it to happen in March, April, May, and June. That presented an incredible opportunity to reach new customers who usually do all their shopping in-store,” Burke explains.
The closure of traditional shopping options represents a massive opportunity for e-commerce and Internet businesses. Last year, bricks and mortar retailers accounting for 89% of US retail spending, according to eMarketer. If just 2-3% of those offline spending move to the online environment, it will mean a shift in billions of dollars.
“If you had told me that there would be millions of people out of work but that my sales would increase—by almost a third—I wouldn’t have believed you, but here we are, and we’re just trying to keep up,” says Burke.
Shifts in digital marketing are not limited to advertising alone. “Some clients have taken a long term view and increased their investment in content marketing. In my practice, I’ve started to publish more in-depth content articles like my guide to content marketing examples,” explains Harpham.
The pandemic crisis has also created more opportunities for marketers with more time on their hands. “I used to commute about 45 minutes each way daily. Now, I have 90 minutes back in my day! I’m using that time to work on a long term strategy – writing a book on SaaS growth strategies,” explains Bruce Harpham, a SaaS marketing consultant based in Toronto.
This Is A Perfect Time To Uncover Hidden Opportunities In Facebook Advertising
As the economy starts to show signs of recovery, digital advertising is coming to become more competitive. If you are worried about higher CPC costs, there is a way you can advertise at a more acceptable cost: borrow another company’s retargeting audience and advertise to them. For more tactical guidance on retargeting, check out our post: 11 Clever Retargeting Ideas You Probably Haven’t Thought Of. Repixel makes it easy, and you can rent some audiences for less than $100. Find out more about the available audiences by visiting our marketplace.