What Can the Recession Teach Us?

I’ve seen some pretty interesting things in 13 years of online marketing. This industry is at once rewarding, innovative, and frustrating. But the current recession has taught me more about people, work, and this industry than I’ve learned at any other point in my career.

This recession is different that the 2000 dot-com bubble burst. It’s impacting how we behave personally and professionally. We’re being more responsible and looking closer at everything we do, including the world of search.

Search Isn’t an Island

Remember when your agency tried to talk to you about a study showing the relationship between search and display? You thought search was a “nice to have” and decided to pass. In retrospect, this probably wasn’t the best idea.

Once the economy started to tank, clients trimmed underperforming display media. CTRs and conversions were down, so logically it made sense to get rid of such expenses and put that money into either search or your pocket. If only you had done the study and understood what a mistake this would be.

You built a model that supported goals based on certain spend levels. As you added this money to your paid search budget, performance went down. Maybe you used that extra money to expand into keywords and categories that didn’t convert as well.

Like any form of marketing, search can have trouble surviving when not reinforced by other channels. Search needs some level of display and offline in order to drive demand. Without this, there is no way to help drive up search volume, or push people to search for specific promotions. Search isn’t an island, and no single marketing service is either.

You Shouldn’t Have Ignored SEO

When the second wave of the recession hit, clients finally considered cutting the sacred cow of search. Despite performance, people needed to save money somehow, and looked to pull back on search advertising. They understood, however, that they needed some search presence, and so revisited the list of SEO recommendations sitting on their desks.

All of a sudden, meta tags and link building were in vogue again. The challenge was that marketers had immediate goals, and SEO wasn’t working fast enough.

Imagine what would have happened had you embraced SEO all those years ago? What if you didn’t pass on organic for not being as immediate and sexy as paid search?

If you had already pursued SEO, you could more easily cut budget and not see such a dramatic drop once you turned off paid search. With an SEO foundation in place, you would’ve been able to more effectively take a fraction of your newly cut paid search budget and put it into SEO.

Are you leveraging paid inclusion, the illegitimate love child of paid and organic? Yes, it’s only available on Yahoo, and may disappear if the Microsoft-Yahoo deal goes through, but at a fraction of paid search costs it’s worth the investment.

Don’t Panic and Change Your Business Model

The biggest recession mistake people make is forgetting about the business model that made them successful. Businesses are trying to find ways to grab every penny, in some cases to the detriment of their long-term success.

Business models should allow companies to make their fair share for the work they put in with a performance model included where appropriate. Ideally, some money is better than no money. However, the models in place have actually worked for all parties for quite some time.

My colleague, Matt Greitzer, wrote an article in which he talks about the advertising historical examinations in Steven Fox’s “The Mirror Makers.” Greitzer recounts the following story:

“Prior to N.W. Ayer’s (later absorbed by Publicis) open contract, ad agencies were in the arbitrage business, maximizing the spread between what they were paid by advertisers and what they paid out to publishers. Ad agencies were the very first ad networks. That the ad network model is over 150 years old blows my mind. So, too, does Ayer’s open contract, which fixes the commission on media spend at a flat 15 percent. That the standard agency commission model is as old as the transcontinental railroad is a fact of which I was not previously aware.”

We can’t survive forever on the same old business models, but let’s not let this recession wipe away all the work and success we’ve had. Companies shouldn’t go into survival mode and mortgage their future. Innovative companies must survive this time, not fold under the pressures a model that isn’t sustainable long-term.

We must find new ways to work with partners, but be warned. If you go down a pure performance-based road to survive the short-term recession, you may never go back.

We All Still Lack the Courage to be Different

“OK, search, you always ask for more budget, claiming to be better at a fraction of the cost. Prove it!” If there was ever a time for a marketer to utter such a phrase, now is the time.

Surprisingly, nobody has aggressively tried to test the “organic search savings” theory out and cut just one or two print ads to fund an already successful search program. To be fair, we’re seeing that traditional marketing is taking a hit as well, just not at the same rate as online.

In a recent meeting with a big-name client that had a fairly small search budget, we were told they wanted to hold off on doing search and take that money to do one (that’s right, one) more TV spot.

In light of unemployment numbers, it’s difficult to be a risk-taker. But because you can fund a strong search program without depleting your entire offline budget, it’s a risk worth taking.

Nothing Replaces a Good, Responsive Partner

Always pay attention to the details. Make sure there is some level of value and learning happening every time you meet with someone. Don’t panic about numbers and then display that panic to clients. It isn’t always about selling more services or pushing for renewals.

Companies that stay on top of their clients by providing value, insight, and service, regardless of the climate, will survive. Hopefully this recession will help us all revisit customer service.

Dr. Martin Luther King Jr. once put forth that “the ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” While the search industry hardly qualifies as something deserving of an MLK quote, it fits to a degree.

We’re all dealing with issues that impact our professional and personal lives. What will set people apart during this time is learning what doesn’t work, adapting to it, and making sure to not repeat it once the good times return. The storm clouds won’t always be overhead, but maybe we’ll have our umbrellas ready for the next time it rains.

Join us for Search Engine Strategies San Jose, August 10-14, 2009, at the McEnery Convention Center.

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