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Thoughts On Pay-Per-Click During An Economic Downturn

Apr 23, 2020
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Thoughts On Pay-Per-Click During An Economic Downturn

The recent outbreak of COVID-19 has shattered lives and disrupted economies across the globe. Not unexpected, companies everywhere are looking to reduce spending as a safeguard against the unknown. Often marketing budgets are some of the first to feel the effects of these cost-cutting measures. However, sometimes these efforts can be misguided. One such area that is worth examining is pay-per-click advertising. 

Often we think of pay-per-click (PPC) as Google ads, but in reality, it can be any type of digital click-based advertising, including Facebook and LinkedIn ads. Due to the direct link between cost and result (ROI), this type of marketing is an easy target when it’s time to cut back on spending, but is that the right approach? Let’s explore the two ways I suggest you view this.

When To Stay The Course

So here is the deal, when sales are down, it’s usually not a good idea to cut back on the methods you use to attract sales. More often than not, all you are going to do is further reduce sales, thus reducing revenue. As you might imagine, this is a quick way to enter into a tailspin to the bottom. 

Ask yourself this, are sales impossible during this event (whatever is reducing sales), or are sales just diminished? If you are selling raincoats during a global drought, then feel free to skip ahead to the next session. However, if you are still capable of sales, even if reduced, consider how you will reach those clients if you eliminate your PPC marketing. 

If you can afford to continue your PPC marketing, I highly recommend it. One of the greatest aspects of PPC is the ability marketers have to craft a timely message that can be delivered directly to possible buyers. “We Are Still Open” and “Economic Relief Options” are both timely and impactful messages.      

If $30-$100 a day spent on PPC results in positive cash flow, then there is no mathematical reason to cut back. Think about it this way, if $1,000 a month of ads results in $3,000 of sales, then eliminating your ads to save money is not a savings of $1,000 but rather a loss of $2,000. In a time when funds are tight, who can afford to lose money intentionally? 

Changing Course

Understandably not all businesses will fair the same during an economic downturn. Different business models and various reasons for the downturn are two important factors. If you are capable of making sales but not able to make enough to justify your PPC spend I recommend refocusing your efforts. 

Keep in mind that at some point, things will return to normal. So, instead of trying to use PPC to capture new sales, you can cut back on your spend and work on targeting your brand name and a small but important aspect of your industry. This will save you money while at the same time keeping you top of mind with your future customers. 

How would this work? Let’s say you sell semi-trucks, and you usually spend your PPC money targeting truck brands and directing those clicks to various brand-focused landing pages. For the sake of this example, you are spending $150 a day on ads. If you needed to cut back, I would recommend spending $25 on ads that target your company name and $25 on your best-selling truck. That will result in a $100 per day savings and still ensure that your brand is out there. 

It really is that simple. However, if you are struggling to make the numbers work and would like someone to review your situation with you, I’m here to help. It would be my pleasure. 

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Jared Stanton

By Jared Stanton

Jared Stanton joined the SMA team in April 2017. He has worn a lot of hats during his time at SMA but has found his permanent niche running the company’s paid-per-click advertising campaigns. PPC allows Jared to make data-driven decisions in the best interest of his clients.

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