Moving more of your marketing budget online in a downturn can be a wise decision, because the internet is where your customers are heading. Google’s Head of Online in Australia explores why all businesses should be turning to search marketing in a downturn.
Deciding what to do with your marketing budget can be a challenge when a strong return on investment from every dollar you spend is critical. And while it may be hard to see today’s uncertain economic times as a moment of opportunity, the good news is that marketers have something at hand which they didn’t during past downturns: the web.
The internet has changed the way we socialise, do business and get information; it is also fundamentally changing the way we shop. There is no slowdown in consumers’ adoption of the digital world.
Today, online is where the customers are. According to Nielsen, almost 92 percent of Australians have home internet access, and 34 percent are online at work. Australians spend more time on the internet than on any other medium—an average of 16.1 hours each week, followed by 12.9 hours watching TV and 8.8 hours listening to the radio.
According to Nielsen, more than 11.9 million Australians use Google each month and almost three quarters of Australian internet users shop online. e-Marketer forecasts annual online sales of more than $31 billion nationally by 2011. This change in consumer behaviour is an opportunity which business owners are starting to recognise.
Australians searching before spending
The downturn is increasing the importance of digital in our lives because it helps us make better decisions, and saves time, money and travel. With an increasing amount of news and entertainment content online, the cost of internet access falling and its speed accelerating, the web is now a powerful tool for consumers.
In fact, Australians are using the internet as the first port of call when they set out to research, compare and ultimately buy products and services. A recent study by Monash’s Australian Centre for Retail Studies revealed that 50 percent of Australian shoppers investigate their purchases online before going to the bricks and mortar store to make their purchase. For instance, 67 percent of consumers research computer and gaming products and services online before making a final purchase. More than half of Australian consumers looking to buy furniture and homewares go online before heading in-store (55 per cent). Searches for local businesses are extremely popular—more Australians search for cafes, hairdressers and accountants than for Lara Bingle or Renee Zelwegger!
This trend is accelerated in the global financial downturn, with consumers becoming before discerning before they actually commit to spending their discretionary income. Accounting and tax-related search queries are 63 percent higher this year than last. Mobile queries are 82 percent higher this year than last. Office supplies searches are 36 percent higher in 2009.
But it’s not just consumers who are trying to ensure they get value for money right now, so are businesses. The internet enables companies big and small to market themselves to potential customers in a way that is flexible, targeted and cost-effective. It ensures bang for buck, which is crucial when every dollar counts.
And it is here that the internet comes into its own. In the past, the underlying principle of advertising was to shout it loud and shout it wide. Online marketing has changed these dynamics, by allowing organisations to target consumers who are actively showing an interest in their product or service.
Measurable media is a must in a downturn
In tough times, online advertising, and especially search marketing—with its measurability and no minimum spend—are good options for businesses with limited budgets. From accountants, to retailers and B2B service providers, we’re seeing all sorts of small businesses jump online to reach new customers in new markets.
There are several reasons for this. Firstly, search marketing campaigns are easy to set up. Unlike mass media ad campaigns, search advertisers need only draft three lines of ad text, and then bid on the search terms they’d like their ads to appear next to. These are the words that consumers will type into the Google search box when they are looking for products or services.
The internet allows advertisers to target their potential customers by geography and time of day. Advertisers can target a continent, a country or region if it suits them. This means that a travel company offering special last-minute weekend fares out of Sydney can ensure its ads only appear to those people searching from within New South Wales on the Thursday, Friday or Saturday.
For example, for Taren Point furniture store CoopersStore, which sells beautiful custom made timber tables, entertainment units and chairs furniture, the traffic that Google AdWords is now bringing to its website is double what the business was attracting last year, meaning that in this difficult financial climate, the company’s sales and leads are remaining strong.
With search marketing, advertisers only pay when a potential customer decides to click on their ad. As this is a deliberate decision, it’s far more likely to be rewarding for the advertiser. If a user types in the term ‘credit card’ in the search box, then it’s safe to conclude that they are interested in purchasing a credit card. What’s more, the cost is in the hands of each and every advertiser. It is entirely up to them how much they are willing to pay every time a consumer clicks on their ad.
The measurability of online media is also contributing to its growth. There are several free performance monitoring tools, such as Google Analytics and AdWords Conversion Tracking, that allow advertisers to see what proportion of their ads are being clicked on, how many users are entering and leaving their website, the average cost per click, and even the cost per purchase. This allows advertisers to track the direct results of online marketing activity to the last dollar.
By removing the guesswork and replacing it with actual numbers, search marketing puts the advertiser in control. It enables them to target their audience with precision, pay only for results and stay firmly in charge of costs. It turns advertising from an art into a science. It is no wonder that advertising on the internet is growing rapidly among both large and small Australian businesses.
Finally, the search habits of Australians act as a barometer for what’s on consumers’ minds, so can give business owners insights that are then used to create smarter marketing campaigns. For example, since the onset of the global financial crisis and the Rudd Government’s stimulus package, we have seen the number of Australians searching for tax and accountancy services online jump by 63 per cent^.
Head online – it’s where your customers are
But how fast is advertising spend heading online? Right now, it’s fair to say that Australian businesses aren’t getting the full benefits of online marketing. While it’s a rapidly growing part of the advertising world, it only represents around 10 percent of total advertising spend in this country. Since the average Australian spends 25 percent* of their media time on the internet, there is a long way to grow.
Every time a campaign goes ahead without an online component, it represents a missed opportunity to make use of one of the most targeted advertising media available today. Ignoring online is a bit like creating a TV commercial but forgetting the sound.
Investigate and experiment with what online advertising can do for you and feel confident in the fact that you can pause, cancel or resume your campaign at the click of a mouse. No other advertising medium is as flexible or measurable, which makes online perfect to try with little risk even in a downturn. By doing this, you’ll truly see returns from every dollar you invest.
—Julian Persaud is head of online for Google Australia. (www.google.com.au)
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