It may seem counterintuitive to invest in digital marketing during the COVID-19 crisis. Revenues are declining, costs are rising, and an overwhelming number of consumers are choosing to save their money rather than spend on discretionary items. For many business owners, this seems like a good time to preserve cash and ride out the storm.
I am going to argue that for those businesses who do cut their digital spending, they are missing the opportunity of a lifetime. Here’s why.
Digital Advertising Rates are at a Relative Historical Low
Over the past 10 years, digital advertising on Google, Facebook and Instagram has skyrocketed to all-time highs. It became increasingly expensive to compete for high-value keywords in just about every market category. In fact, in 2019 we would usually advise small businesses with under $1000/month budget to not even bother with ads and instead focus this on other areas with a more immediate impact and ROI.
Then came the COVID-19 market crash of March 2020 and the game changed entirely. Everyone from major players like Coke and McDonald’s pulled vast amounts of advertising dollars from the market while small businesses cut their budgets completely. Even Google cut its own marketing budget by half. This represents billions of dollars wiped out from the digital advertising space in a matter of a month.
As such the competition for high-value keywords has plummeted and so have the rates. On average I am seeing the cost/click of our keywords drop by about half. That $1000 budget that in 2019 I said was not worth it, just doubled in value. Now it’s worth it.
Brand Exposure is the Key to Survival
On average, a consumer needs to see a brand name at least 3-5 times before they develop any awareness or recollection of that brand in the near future. You may have an amazing product, the best staff on the planet and a really catchy slogan, but without brand exposure, you will remain in obscurity.
With digital advertising rates plummeting small businesses now have the opportunity to take a small budget and get a much larger amount of brand exposures. With a highly targeted ad campaign, a brand that was once obscure in the digital arena can now become a much larger player.
This is your opportunity to make a play at a much larger piece of the pie. The advertising rates will likely never be this low again.
So, What is My ROI?
This is the first question that clients ask me when I propose a paid digital marketing strategy, and it is a good question. You want to make sure that every dollar you spend comes back at least 4-6 times its original value. You want to know your short-term ROI. However, what small businesses often overlook is the long-term ROI.
The short-term term being, did that click on my ad turn into a sale? Did it make a profit?
The long-term ROI being, what is the lifetime value of each of my customers?
You need to know the lifetime value of your customer because this gives you a real assessment of the true ROI of your digital ads. And during the COVID-19 crisis, almost all of your digital spend will be focused on the long-term ROI, on your customer lifetime value. Not sure how to calculate the lifetime value of a customer? Contact Us and I will do it for you, at no cost.
How Can I Invest in Lifetime Value When I Have Declining Revenue?
Most businesses stay focused on short-term ROI as a way of keeping the lights on. The problem with that strategy is that you preserve cash when the economy is slow, and your customer base falls dramatically. When the economy is booming again you end up chasing the market upwards which means you will always pay a premium for your ads. When you lose customers during an economic downturn and pay a premium for your ads during a boom, you inevitably lose money.
A forward-thinking business asks the all-important question, “If I invest now, what will my return be over the next 1 year, 5 years, 10 years?” That is the type of long-term investing that separates the businesses who succeed from those who fail.
Now is the time to invest. Here is how to start.
Creating highly targeted ads that lead to a landing page and a conversion form. Get the potential customer’s email, any way that you can, and then slowly work them into a customer through a well thought out and well-executed email, social and retargeting conversion funnel strategy. This is the engine that will drive your future success. Not sure how to start? We can help you.
So what do I do Now?
There is no denying that COVID-19 has shaken up the game. Big companies are falling, medium companies are scared to make a move and small companies are scratching their heads wondering how to survive. We are all in the midst of a massive market shakeup. In the end, some businesses will be gone, some will fall to the bottom and others that were once on the bottom will find their way to the top. The forward-looking companies have the best chance of not only surviving but thriving in the post-COVID world.
As a small business, you now have a once-in-a-lifetime opportunity to push your brand to the top by getting smart, highly targeted, and extremely low-cost ads out and in front of your core audience. Formulate, strategize, execute, test and then adjust as needed to make your digital ads as effective as possible so that your brand becomes as recognizable as possible.
Will this strategy drive immediate sales? Probably not. Times are tough and sales will lag.
However, we know with absolute certainty that the economy will rebound, it is not a matter of “if”, it is a matter of “when”. For those who invest now, I can guarantee that if done right you will experience exponential growth in the very near future.
———-
Article Written by:
Dean Horsfield
Founder of Little Bear in the Forest | Digital Marketing Agency
Connect With Dean on LinkedIn 
