Learning to Lead: Takeaways From Our 2020 Leadership Development Program
October 26, 2020 |
September 26, 2020
It’s no exaggeration to say that the last six months have been some of the most turbulent, unpredictable times that many of us have ever experienced, and may ever experience. So much so, that the phrase “unprecedented times” has become a cliche associated with the COVID-19 pandemic.
For many businesses, 2020 has been a time of pruning. Strategies and processes that once defined companies stopped working—seemingly overnight. Entire industries were made irrelevant, and many still haven’t recovered.
On the other hand, for some businesses, 2020 has been a time of incredible harvest. Industries sprang up, businesses prospered, new billionaires emerged, and sales records were broken. Many on the backs of technological innovations and digital marketing strategies, like pay-per-click (PPC) ads.
Renowned sales coach Zig Ziglar once said that “Success occurs when opportunity meets preparedness.” The year 2020, for these prepared businesses, has been that time of opportunity.
In his book, The Wealth of Nations, Adam Smith introduced the world to the concept of supply and demand (the same year that a fledgling group of 13 colonies signed a declaration that severed their connection to Great Britain). To summarize his concept: the available amount of a product or service and the market desire for it regulates its price, known as supply and demand. This concept is evident when looking at the PPC ad market for the last few months.
For those unfamiliar with how PPC ads work, they are, in essence, a marketplace that only charges the advertiser when someone clicks on their ad.
An always in flux bidding system determines the ad marketplace’s current pricing. In other words, if an advertiser wishes to bid for a specific keyword related to their ad, it may have cost $1 a few days ago, $.75 today, and maybe $1.50 a couple of days from now.
The price you, as an advertiser, pay per click and your ad’s competitive position are algorithmically determined based on a number of market factors that can essentially be broken down into two groups, such as (but not limited to) the following:
External Pricing Factors (outside of your control)
Internal Pricing Factors (within your control)
Most years, it’s pretty easy to estimate the average price of certain keywords and create a solid budget around key results. But, just like we saw in every arena, 2020 HAD to be different.
I doubt Adam Smith had the 2020 PPC ad market in mind as he wrote his seminal work, but it has provided a great example of how some companies were able to take advantage of the “invisible hand” of COVID-19.
Companies that continued advertising over the last 4-5 months saw first-hand the benefit of less supply in the ad market, as many competitors stopped digital advertising due to forces outside of their control. Simultaneously, they experienced more demand as a large percentage of the workforce suddenly became “work from home” status, and people began spending a LOT more time online.
This led to the PPC marketers’ dream: reduced ad costs and higher impressions, which meant more clicks, and ultimately, more conversions for these companies.
It’s important to note here that, while 2020 seems to have had vastly different effects across different industries, much of the challenges or opportunities that companies have faced are very nuanced. Meaning that, what has worked for one company, may not work for another, and a disruption that affects two companies in the same industry may not even impact a third.
For instance, many business-to-consumer (B2C) businesses who chose to continue advertising amid the COVID-19 pandemic saw an increase in their reach, clicks to their website, even revenues as a result, but this was not prescriptive. For many companies, increasing advertising or continuing to advertise during the pandemic was an impossibility due to factors outside of their control.
In times like these, there are no easy answers. Whether your business saw success or challenges over the last few months, Bob Dylan put it best: “The times, they are a-changin’ (again).”
Whether your business was in the prune or harvest camp, it’s important to start thinking now about the post-COVID landscape.
For companies that have seen unparalleled growth over the last few months, understand that this good fortune won’t continue forever. As the popular saying goes: “what goes up, must come down.” We’ve grown used to phrases like “new normal” but, as restrictions ease and more companies re-start their ads and bring employees back to the office, it will likely mean reductions in your return on ad spend (ROAS) and the effectiveness of certain ad campaigns.
With a staggering $20 billion decrease in expected ad spend across industries in 2020, it may be years until we see this gap close. Assuming COVID-19 case numbers continue to settle, the economy normalizes, and things are generally going well now, it may not be the time to overleverage your company or make unnecessary investments.
For companies that have suffered at the unpredictable hand of coronavirus, our prayers are with you. Optimistically, the coming months will return to some semblance of normalcy. Here are a few things to consider when deciding to restart your digital marketing and advertising as they do.
A list of past customer emails or saved audience lists you accumulated prior to discontinuing your digital marketing efforts can be a great resource when getting your post-COVID-19 marketing started. Previous customers are 70% more likely to convert than new customers. If ever there was a time to rely on the relationship capital you’ve built with prior clients, it’s now.
Certain industries will open sooner than others and (barring state and federal legislation) a good indicator of increasing demand are consumer trends. Tools like Google Trends can give you insights into how people are searching. Compare current numbers to those before COVID-19, and you should be able to make inferences into the trending habits of customers in your industry based on their keyword searches. Is interest getting back to the level it was before coronavirus? It might be time to start advertising again.
If you haven’t been advertising for months and still are uncertain of when to restart, don’t forget that it doesn’t have to be all or nothing. Easing back into digital marketing might be the best way to get key insights into your industry and start to test the market. Top-of-the-funnel advertising strategies, like brand awareness campaigns, are a great way to re-engage your target market and remind them that they can still rely on your business for goods and services. Additionally, it will allow you to start tracking key performance indicators (KPIs) to help make critical business decisions as the economy begins to rebound.
The decision to restart your advertising and digital marketing is not easy, especially with so much uncertainty still present. Make calculated, conservative changes to things like advertising budget and marketing decisions as you slowly ramp up. When the consumer data tells you that it’s time, put the hammer down, but don’t feel rushed.
Luckily, you don’t have to do it alone. PHOS Creative is here to help you interpret this data and make informed decisions about the future (post-COVID-19 or not). Contact our experienced team to help.