2024 THE YEAR OF BUSINESS PROFITABILITY
In light of the much-publicized “cost of living crisis” and an overarching general sense of economic malaise, clients are looking to focus budgets on consistent “always on” revenue-driving activities. Campaigns are laser-focused on driving sales and keeping ROAS high.
Post covid there were some giddy moments of “growth at all costs” and a false sense of relief and renewed vigour, that saw a flurry of marketing spending, and not all of it ended well. The sobering impact of 13 interest rate hikes in 15 months has caught up and put a damper on the economic mood and many companies are already impacted and are adjusting accordingly.
DIGITAL MARKETING STRATEGY FOR 2024
Strategically we need to realign with the market conditions and look at what will have the best impact on the goal to secure stability, sales, and profitability. The best way to do this is to unpack Return on Advertising Spend (ROAS). Revenue earning vs budget spent. However, the math will be different for each client. What is the true cost of your customer acquisition, and how much profit per sale, is the sale a one-off, or does it offer repeat business, and referrals, or what is the lifetime value of that customer? Having a specific ROAS or CPA target and sharing that with your agencies and team is a huge advantage.
Businesses that are just launching a new product or just beginning their journey may not have the data yet to get a set ROAS or cost per acquisition target, and if you are building a new brand or product, you must be prepared to invest in driving “awareness” and sales together.
WEIGHTING THE BUDGET TO BEST PERFORMING
Over time campaigns can become bloated with sluggish performance from a channel, campaign, ad group, or even keywords. It comes down to the details. What is the exact area of the digital activity that is driving accountable sales? Clean up campaigns, pause ones with a much higher cost per conversion, open up the ones that are winning, and remove any “nice to have” or secondary campaigns that were added over time – that have some traction but consistently don’t perform as well as others. Focus on the meat and potatoes and not the bearnaise sauce.
We have had huge success when taking over accounts by simply turning off campaigns that had low or average performance and allowing more budget to those that did perform. Simple changes can have a big impacts.
WHAT’S YOUR MONEY KEYWORD?
SCALE BACK WHEN QUIET – RAMP UP WHEN PEAK
when times are bad you MUST advertise”
This was surely coined by an Advertising Agency owner who needed to keep his wife in Manolo Blahnik shoes! It is only partially true – we all should advertise more wisely when things are seasonally quiet, or during periods that are slow for your sector. The platforms will happily spend your dollars 24/7 – no worries. If you set a daily budget – they will do their darndest to spend every cent and then some.
Google is extremely happy to spend way over daily budgets. Budgets should be nimble. Scale back in quieter periods and save, so you can ramp up during peak times. Black Friday should be off the charts this year.
We noticed an extended slowdown in the last Christmas period, it got super quiet, people wanted to disconnect and not be online and it seemed people took much longer breaks this year. Save your marketing $$ when things are slow and don’t just donate it to Zuckerberg and Google – they are doing fine. ????
CHANNEL ACCOUNTABILITY
The ANA study closely tracked the flow of dollars through the programmatic supply chain and found that only $0.36 of every dollar that enters a demand-side platform (DSP) reaches a consumer.
Where does it go?
- Around $0.29 goes toward fees to ad-tech intermediaries.
- Another $0.35 goes to low-quality media, including invalid traffic (IVT) and made-for-advertising (MFA), non-viewable and non-measurable inventory.
- While most supply-side platforms (SSPs) took less than 5% of the ad spend, one SSP in the study took close to 45 percent of media spend.
It’s ugly. But we already knew it wasn’t performing well – you only have to take one look at your analytics and traffic and marvel at the ludicrously high bounce rates and low time on the page to know something isn’t right here. Read more here.
REDUCE WASTE IN MARKETING
Look it’s not just programmatic that I have an issue with. It’s just so easy to waste money on Digital Marketing on all platforms. Google desperately wants you to. Google’s primary goal and the KPI of every Google staff member is to get them to spend more and improve their share value. Deceptive tactics, biased interface defaults, and hidden options, it’s a minefield. Google is constantly screaming “Limited by Budget” at you.
Meta isn’t, in my opinion, as blatant in pushing the “you need to spend more” agenda – although if you don’t spend enough, you can be permanently stuck in the learning phase – which is basically nowhere.
Spend what you need to get the result – if the ROAS is there, keep slowly increasing the budget.
When the team at PayPerClick goes on annual leave and their handover notes say, “DO NOT DO ANYTHING A GOOGLE REP TELLS YOU TO DO TO MY ACCOUNTS AND DO NOT, UNDER ANY CIRCUMSTANCES AUTO APPLY ANY GOOGLE RECOMMENDATIONS”.
It’s in all caps. Yes, it seems, everyone had to learn the hard way at least once.