Search Marketing in a Recession

There’s an old joke Economists find highly amusing:


  • ‘A recession is when your neighbor loses his job, and a depression is when you lose your job’

It ain’t sounding so funny these days…


But wait. It’s not that bad for search marketers, depending on how the industry deals with it as a whole, and how independent practitioners and companies deal with the current economic climate on a micro level.


From a business perspective:

Traditionally, marketing budgets are cut during a recession. But search marketing is not traditional marketing.


Search marketing is basically virtual point of sale display marketing, but far more relevant and targeted:


  • PPC enables an ad to be displayed for the exact term a consumer is utilizing to search for a product, service or information at the exact time of interest.
  • Efficient SEO ensures a businesses visibility on its brand name in the search engines, and its visibility on highly relevant and targeted converting phrases which are of personal interest to their target market, particularly if they are geo-targeted.

Even if businesses stop or cut-back on advertising on TV and radio or in print, many already have a web site. This is the time for them to maximize their internet exposure.


People still need goods and services in a recession. Mayhap not as many as they would like to have, but wants and needs are very different animals. If people are strapped for cash, if filling their car is becoming a burden, if their job situation means they need to sell their car, if they are at home due to job loss, the fact is that for reasons of both necessity and time to kill they may very well be online a lot more. If they are, they are (apart from fluff internet use) most likely going to be looking for certain goods and services they can purchase online and have delivered via the postal service.


What is it we do again? Bingo…


And we’re not the only ones that know it. While SEO is still a mystery for many, its use, benefits and potential profitability in terms of ROI are becoming more and more well known:


  • According to research supplied by PRstore early this month, more than 25 percent of new orders from their 40+ markets nationwide are for website design, and sales of related products, such as search engine optimization (SEO), are also up. 1


Apart from the obvious benefits of being able to search for a product or service as well as related reviews online which save time and money in terms of opportunity cost and actual transaction costs, there is also the issue of immediate gratification:


  • When people are stressed about money and concerned about their next pay check, the impulse-buy phenomenon in almost all types of purchases (apart from luxury purchases) is heightened. If a consumer knows they actually need something but may not be able to pay for it next month or the month after, they are in many cases more likely to purchase it as soon as possible with the cash they do have to off-set the possibility or likelihood that they may not be able to do so in the coming months.


While this is not a great outlook for the consumer, it does offer a great deal of fodder for effective SEM practitioners who are targeting the right words, with usable targeted landing pages that offer a good user experience, support and great returns policies; both from a PPC and an organic search perspective.


The impulse-buy behavior doesn’t stop after month one – people continually ‘need things’ in our consumer society, and if money is short they are more likely to purchase immediately they have the cash if they perceive the purchase to be necessity. A new dish-washer is certainly not a ‘necessity’ in general economic terms, but I know few housewives in middle class America who wouldn’t consider it to be so if their old one packed up. This is not a commentary of our society, and personally with three kids under 8, a fulltime job and a blog I love, my dishwasher, my washing machine and my tumble dryer are pretty darn necessary – while we can afford them… There is no dichotomy in that statement; if I had to choose between ‘extras’ for the kids in my weekly shopping bill or getting a new washing machine after 3 months, I’d get the washer – no contest. Maybe not my perfect washer, but it would sure be good enough to last me a year with the warranty. My mind-set may not be perfect, it may be warped by our society, but it’s what I grew up with. If I had to start washing by hand for some reason, I’d do it – right now I don’t. And yes, I recycle.


While it is true that people tend to focus on saving and conserving money during an economic downturn, saving behavior is greatly influenced by their levels of consumer confidence in the economy; and consumer confidence is fed by business confidence.


If businesses shore up, cut back on inventory holdings, slash prices and go belly-up, consumers get the willies and save harder. Most businesses are price takers, so it’s up to the industries to get together and keep themselves solvent by forming price strategy and inventory (supplier) agreements. If they can effectively do this, appease the consumer by enabling purchase with discounts, but upholding inventory levels within reason, not only is their industry more likely to survive, but the consumer confidence in their market will increase, as will the consumers independant incremental appreciation of economic stability.


The problem with a credit crunch is that it feeds right down to a supplier level. The raw materials suppliers can’t get the bucks on a monthly basis to purchase the inventory they need to make the products their manufacturers or retailers need; or the interest rate is prohibitively high and they are limited due to cost. The lack of supply of these ‘raw’ materials causes a shortage for the retailers. Consumers see a shortage of goods and panic. These shortages in the business sphere can usually work themselves out in a few months, the problem is that the precipitate consumer panic creates a tidal wave of concern that is usually at least 50% unfounded, and that in turn knocks back on the businesses who, after severe shortages, suddenly have (despite a shortage of goods in a normal market) an excess of supply as consumers aren’t buying… they cut purchases from the suppliers, who are already struggling with credit and interest rate problems, compounding the suppliers issues as they try to pay for what they owe, and the suppliers may go bang… It ain’t no fun being a first-point supplier in a recession, which is why they are so very cautious. And that is the vicious cycle in a (totally blase) nut-shell… It’s not necessary, but it is a fact – mob mentality rules in a recession… Industries, businesses, households and individuals need to think for themselves.


Sorry, got side-tracked…


Businesses need to market their goods, especially in a recession – assuming you aren’t Ferrari… If you are, you shouldn’t be too bugged by the recession anyway – if someone has the money to buy your vehicle, they are unlikely to be hit too hard, unless they were invested in AIG…There’s always the exceptions to the rule, eh? But the economy is not ruled by the stock market; it is influenced by it to a great extent… but wall street in many cases and to a great degree doesn’t impact on the SMEs for many months… the collapse of banks is an entirely different story.


I don’t live in the states, but I agree with Trump’s statement that this may well be a cleansing – and in my view; about time… but that statement of mine is entirely economically biased, and as a wife, mother and employee – my heart goes out to the American people. I will say as an ex-economist I don’t think it’s going to be all that bad, and give it 9 months, the DJ will be back up past the 11.5K mark and employment will be above current levels. Prove me wrong 🙂 I hope you do.


Laura’s SEMI-thought Conclusion:


Here’s a random thought…if SEMPO, SES, SMX etc were to contact all registered members and do a membership drive to boost numbers, and then band together to actually target mass audience portals including TV, radio and the internet promoting SEM services, it would be in the interest of the industry as a whole.


If registered members were allowed to provide geo-targeted hourly rates on specific web portals hosted by these ‘authority sites’  for specific services in a transparent manner, it might not only clear up some of the mystique, but also serve to drive demand for the services we provide as a whole.


I wish I had the money to start a portal service for SEM services on a geo-targeted basis around North America, facilitated by some overt advertising to businesses on a mass level. I don’t, but I think it would work, and I hope it happens.


This is a totally un-thought out thought – but I think further thought (thought over-load) would grant it both merit and substance… this is just a blog post. If I got you err.. thinking, I did my job. Thanks so much for reading.


Let’s think about it logically, and wait for the data.

1. PRstore (HitSearch Ltd)


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