8 Tips for Using Digital to Beat the Recession

What would you say if I told you a restaurant increases its staff during lean periods and cuts its staff during rush hours? You probably would say that is backwards. Similarly, companies today are spending 90% of their ad budget on non-online channels, even though customers spend close to half their time on the Web. This discrepancy is commonly called the digital divide.

Closing this digital divide is one of the largest opportunities marketers have today and many marketers are already realizing this. Global ad spend increased only a few percentage points in 2008, while the top 50 largest digital agencies, according to Ad Age, saw a combined revenue increase of 15.4%. The recession is amplifying this trend with many companies cutting all areas except for digital. Those cracking the digital code during the recession will be winners when the economy improves.

Adopting Digital Best Practices
As marketers cope with changing economic environments and rapidly evolving online venues, taking the appropriate approach with the digital medium will be critical to survival. To expand their brands’ digital presence in a meaningful way, marketers can adopt a number of best practices.

1. Lead with a great site. Many marketers get so caught up in digital advertising, lead generation, etc., that they forget about the ultimate destination for the traffic: their Web site. Companies that focus too much on what is going on outside of their sites risk neglecting the centerpiece of their experience.

Too many sites, particularly ad-selling media sites, deliver experiences that fail to attract repeat users and sub-optimize advertising revenue. By redesigning the site experience, moving video forward and focusing on more lucrative video advertising, one cable television site raised advertising revenue 100%.

Many companies are using the recession to redesign their site experiences. Anthony Bianchi, vice president at Janou Pakter, a search agency focused on recruiting creative talent, observed, ” Those agencies focused on designing experiences are far outpacing those focused on advertising.”

2. Reevaluate display ads and paid search. Consider whether search engine marketing efforts are fully integrated with an overall marketing strategy. Most search firms often claim that clients are getting positive ROI for certain keywords, ending the discussion. However, the UK’s IPA Search Group recently reported declining click-through rates and rising cost-per-clicks (CPC) from January 2008 to March 2009.

Today, with budgets tight, marketers must determine where they are getting the best ROI. Developing SEO, SEM, and multivariate testing, coupled with site experience improvements, can substantially improve ROI. SEO can help reduce the bleed from increased CPC’s while increasing acquisition through improved ranking and relevancy. Conducting multivariate testing on landing pages can improve site experience and guide marketers’ efforts.

3. Turn advertising into an experience. The digital realm offers possibilities that are difficult to execute in traditional media. Advertising itself can be positioned as a value-added experience, and the key is to provide content that enriches an audience’s interaction with and perception of the brand. For instance, Xbox presented an online world and gaming experience with the launch of Halo 3. Scientific instrument-maker Varian introduced the Varian Experience to showcase its products in a new light; it obviated expenditures on a major trade show and provided client data impossible to communicate from a magazine ad or a trade show booth. By expanding such advertising experiences over time, marketers achieve long-term ROI.

4. Integrate social media. Social media has exploded. The Conference Board recently found that 43% of Internet users utilize a social networking site, up from 27% last year. The social media sites (Facebook, MySpace, etc.) are consistently among the highest traffic sites online. Brands must fold sustainable social media into every campaign, not a one-off idea, to build awareness and loyalty as well as take advantage of viral potential. Major sites such as InforWorld have made social media the cornerstones of their site redesigns.

5. Make the product digital. To add value, consider making digital one of your products by creating new ways to experience a product or enhance its value. First, evaluate if there is a market opportunity to make a digital product based upon your brand. For instance, a respected source of financial information could develop an online desktop for financial advisors. Second, explore opportunities to integrate a Web experience into your product. Apple, for example, created interactive digital marketplaces (i.e. iTunes, the AppStore) as a value-add for iPhones and iPods.

While product creation is not always in the realm of marketers, it should be. What better way to way to create positive brand impressions than through a dedicated group of online customers.

6. Focus on the numbers. Ultimately, embracing digital is about driving business and revenue. With tools that capture clickthroughs, visits, costs, etc., marketers have greater opportunity than ever to demonstrate the value of their campaigns. Many companies do multivariate testing with products such as Autonomy Optimost to optimize offers. For instance, if searching for flights to Los Angeles, a landing page may differ depending on search terms or personal information. Over a period of time, offers change and optimize automatically. This technique increases conversion and creates an impact offline. By optimizing offers online for little time and money, marketers can apply newfound knowledge for subsequent direct marketing efforts, reducing costs and raising conversion rates.

To monitor the effectiveness of a comprehensive strategy, set up a marketing dashboard to understand which campaigns and mediums are delivering results and which are not. Experiment with the marketing mix to see how adding or removing certain elements can affect overall goals.

7. Don’t overcorrect for digital. With today’s focus on digital, it could be easy to abandon other marketing methods. However, digital should integrate with other mediums as part of a holistic approach. Digital can support other mediums as well as feed off of them to support an overarching strategy. Testing different media mixes to achieve optimal conversion is an excellent way to bring the measurability of digital to your entire marketing effort.

8. Save nostalgia for an episode of Mad Men. Nothing is quite as exciting as a 30-second spot or flawlessly executed print ad. Those will remain a cornerstone of any effective campaign, but the good ol ‘days are best left to an episode of “Mad Men.” Digital is here to stay and the recession promises to increase its role substantially. Nothing captures the disruption of digital quite so much as this video.

Embrace the potential of a meaningful digital experience and help your brands rise to the test.

Jeff Maling is president and chief experience officer for Roundarch.