The COVID-19 Effect on Marketing

Welcome to the Dove Direct Print and Marketing Blog. Today's post, "The COVID-19 Effect on Marketing," uncovers newly acquired data regarding the pandemic's impact on the marketing sector. Data collection is at best a snapshot in time, and at worst a moving target that will likely see a host of inaccuracies, anomalies, and revisions. However, in this climate, we find it useful to check, double-check, and then check again, as the data changes day-to-day, if not week to week. Our first question; what is the pandemic's impact on various business and marketing initiatives?

Our Quote of the Day:

"The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.  - Peter Drucker

The COVID-19 crisis is causing economic turbulence with brands and marketers predicting smaller budgets aimed at achieving higher goals. Digital marketing and SEO investments have become top choices as marketers prepare to reduce spending in the most expensive areas such as paid media and employee headcount.

Making the Correct Budget Cuts

In this unprecedented pandemic anomaly, it is a considerable task for CEOs, CMOs, and other C-level executives to ascertain and execute increases and cuts to any budget. For starters, the following three data points illustrate how marketers are thinking about budgets:

• 65% of marketers anticipate a decrease in their annual marketing budget
• 86% of marketers predict that their marketing goals will be harder to reach
• More than half of marketers believe that SEO is more important during this time
  
  

It is essential to keep in mind that advertisers and brands that did not maintain marketing and advertising budgets during the great recession of 2008 lost marketshare when the economy stabilized, and consumer confidence returned to acceptable GDP levels. One needs to look no further than GM, Chrysler, Ford, Toyota, and others who succumbed by pulling advertising while Hyundai and Kia increased advertising spends and, subsequently, marketshare.

Conclusion? If the 2008 recession is any indicator, brands that continue marketing and advertising, generally speaking, enjoy accelerated growth coming out of an economic downturn versus those that cut and run.

Recession-Proof Marketing Investments

Based on the survey question, "How would a global recession impact your marketing strategy?" There is good news and bad news.

First, the bad news as 58% of marketers surveyed stated they would lower their budgets. That move detracts from the overall economic status. Here's the good news. 34% said they would increase investment in low-cost channels like SEO.

The majority of marketers expect to lower their budgets. However, it is unclear if those who plan to reduce also represent 34% who are looking to increase SEO investments. The following describes how marketers are looking at budgets:

• 58% will lower their budgets
• 34% will specifically invest more in lower-cost channels such as SEO
• 29% will raise the bar for ROI marketing
• 28% will reduce investments in high-cost media such as paid media
• 25% will reduce team sizes (employee headcount)
• 23% Will invest more in digital marketing
  
  

Conclusion: Anywhere from 23 to 34% depict areas where investments will increase, i.e., SEO, ROI, and digital marketing. The remaining 66% are, for the most part, exiting the competitive marketing landscape, while waiting it out. This alone presents an opportunity for those who understand that going dark with advertising and marketing is a recipe for disaster, and possibly could lead to bankruptcies.

Now SEO is More Important

Search Engine Optimization is rapidly becoming more critical during this pandemic. For one, all marketers and brands need consumers to find them on the internet. More than 30 million small businesses may also need to depend on digital marketing, where SEO is a significant game-changer, especially for those organizations that cannot afford direct mail marketing.

That said, let's take a look at how marketers surveyed view SEO with the question: "Will SEO be more or less important during this time?"

• 34% stated it will increase slightly
• 29% stated it will increase steeply
• 20% said no, it will remain the same
• 13% unsure
• 3% stated it will decrease slightly
• 2% said it will decrease greatly

SEO Performance in 2019

SEO is not new, but as this report suggests, it is now a top priority. For reference sake, let's take a look at how SEO performed in 2019, according to the same group of respondents, based on the question: "What were your top-performing online channels in 2019?"

• 66% organic search (where SEO shines)
• 50% paid search
• 50% email marketing
• 36% content marketing (social media and blogs)
• 26% digital advertising
• 18% paid media
• 14% organic social media
• 11% webinar
• 8% affiliates

You should note that the remaining categories, such as influencer marketing, syndicate, SMS/Text, push notifications, and in-application messaging, all came in lower than 5%.

This data suggests that the best opportunity resides with SEO organic search results. The 34% balance can go to other platforms such as email marketing, which is also a low-cost medium that may represent better reach and value for brands and marketers.

The Net-Net

Marketers plan to reduce overall ad spending, while simultaneously increasing investments in low cost/high ROI channels such as SEO. Forrester presents a value estimate of SEO versus ad placements. When spending $1.3 million on SEO (organic search), the approximate value is equal to spending $12 million on ad placements. That's a 90% increase in value, which is a no-brainer for any marketer.

While this report deals with digital marketing spend projections, marketers should also evaluate traditional mediums. For one, the volume of internet users will impact internet speed, and digital advertising alone may not be sufficient to engage enough targets for a specified campaign. Social media has also become a presentation scroll-for-all-kinds of content, making it more challenging to reach enough targets to justify the spend. To that end, we will explore alternative marketing channels that perform an integral role in attracting users to digital, and sooner or later, to brick and mortar destinations. We hope that you found value in this post, and we thank you for reading "The COVID-19 Effect on Marketing!"

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