Louis Venter, founder and CEO of MediaVision, explains how strategic investment in search during a downturn can pay off with a significant long-term impact on business.
At the end of 2022, as inflation reached a 41-year high, award-winning media analyst Ian Whittaker provided some useful insight into the changing ways in which boardrooms across the world now view advertising.
In an interview with Kantar, Whittaker said the global media market should expect to see growth because more boardrooms than ever before now assess advertising to be a true strategic benefit.
“There’s starting to be this change in conversation from advertising being seen as a cost to really being seen as an investment,” he said in the context of a global economic slowdown.
In my view, this is the outcome of not only inviting more CMOs into the C-suite, but of really utilising marketing evidence, which in the UK has been derived largely from the IPA’s impressive, multi-decade studies into how different businesses have invested throughout downturns.
Such studies suggest that reducing marketing expenditure during periods of high inflation or recession can harm brands in the short run and impede their growth and profitability in the long run.
In contrast, brands that refrain from making cuts may experience five times as many significant business effects – such as profit, share and penetration – and four-and-a-half times the annual market share growth.
Yet despite this, blindspots still exist because the IPA’s data only incorporates paid brand-building media, utilises no Google data, and – as useful as it might be – still relies on evidence that is sometimes decades old.
That is not to say the investment strategies being encouraged are incorrect, but media and advertising has changed since the IPA began collating its evidence, particularly in the past few years with the lockdown pivot to ecommerce, the rise of online-born brands, and the subsequent drive in performance marketing to assist its growth.
Indeed, as an online marketing specialist that has worked to evolve these markets, I feel that search, like its brand marketing counterparts, has a valuable investment argument to make – marketers just need to know how best to present it to the C-suite in the absence of multi-year econometric data.
Search has changed
First, it’s important marketers understand that search marketing has evolved substantially in recent years, but is often overlooked for its new and powerful capabilities. For example, the role of organic search to act as a reliable indicator of both market share and brand strength should be viewed as an essential business tool that impacts all marketing investments.
This concept was first introduced by Les Binet, Head of Effectiveness at Adam & Eve/DDB, in 2020. After testing and proving the theory across several categories, Binet also found that share of search is a valuable ‘early warning system’ because it accurately proxies market share data – but up to a year earlier.
Furthermore, Binet also discovered that all forms of advertising impact share of search, and that organic search is an effective way to track brand salience and consideration.
Crucially, however, seeing information quicker than the market means a brand can react to it, and therefore further refine channel investment. In a downturn, when budgets are tight and markets shrinking, that is enormously valuable.
Indeed, as inflation continues to have a significant impact on consumer spending and media prices, buyers in all markets are becoming increasingly strategic. As markets shrink, success is therefore primarily defined by market share; if a market cannot be expanded, then the only way to succeed is by taking a slice of the pie away from competitors.
For the search market, where the majority of searches are for products, this has three distinct elements marketers might use to persuade any sceptical boardroom.
First, if a brand is not visible it is going to lose out on revenue opportunities today while finding it harder to defend against a Google ranking in the future.
Second, non-branded product searches can attract new customers at the lowest cost per acquisition of any marketing channel, making them a valuable target for loyalty marketing during an economic upturn, especially if they were acquired during a downturn.
Third, and what will prick the ears of any finance director, organic search possesses a unique multiplier effect. This is because the organic search results at the top of Google get the majority of traffic, so when a market grows again post-recession, those high-ranking businesses will stand to multiply the benefit, while low-ranked businesses can only play catch-up.
An engine for growth
It is also valuable that marketers understand that SEO has evolved to not just operate reactively or proactively; but to work as a predictive tool able to spot future trends so that a business can better prepare and earn high rankings later.
This is the cutting edge of SEO, which uses real-time data and performance tools – such as a digital demand tracker – to anticipate consumer search behaviour, rather than optimising by reacting to past data or presumed annual trends.
In turn, that data can support a much broader digital strategy, and can even enable ecommerce brands to maximise the benefits of the whole customer demand cycle; the early warnings, scaling with demand, and optimising sales and margins.
That moves SEO beyond being a hygiene factor low on a boardroom's priority list towards a key investment channel that is able to work much harder for businesses during tough times.
Indeed, investigate what the cutting edge of search and SEO are really able to do, and marketers should find ample evidence that it is a real engine for growth that can be integrated across an entire organisation.
Founder and CEO