Wednesday, December 10, 2008

Economics Changing The Internet

This economic crisis may be the catalyst for change we really need. In tough economic times most companies will slash marketing and advertising budgets to weather the storm. This may not always be the best solution. A drastic change rather than a simple reduction will be required to survive. I believe those who will be able to prove themselves successful in this recession will be the ones that show us a better way of doing business. The best changes or innovations are often times inspired by desperate times. The traditional business model must change; organizations must alter their plans with the changing times if they want to succeed. In prosperous times we simply do not pay attention spending, it is human nature spend what you have. What happens when faced with a new reality, one that involves your entire budget and livelihood simply gone?

The typical approach to marketing has been to spend as much money as possible to blast ads in every location available and purchase as much traffic from paid search as your budget would support. It didn’t really matter how effective those tactics happen to be, it was just assumed that’s how you did it. There has been much debate in the industry over how to get the right message to the consumer at a time when they were receptive to making a purchase. Search recognized substantial growth as one of those indicators that a customer was interested in a particular item or subject. However, at a time when people are more cautious about their purchases, buying those keywords may not prove conversions at the previous rates. People may be performing the same search but not following through with the purchase having an obvious negative effect on the organization that now has to decide whether to continue spending in hopes that things will improve. Couple that challenge with the fact that even if a purchase is made, it is expected to be at the lowest possible price and you have a major catalyst for change. The basic economic facts do not add up for organizations to spend more money marketing than they can possibly make on the product.

While there is no historical data on internet behavior in a recession to guide us, there are new trends taking place and we should pay particular attention to them. Keep in mind we are shaping the future. Not since the beginning of the internet has there been a time of such change and never before have individuals played such an active role in the outcome. Consumers are no longer breaking out their credit cards to make impulse buys, they are spending more time researching brands and products, which means that organizations must meet their needs in new ways.

1 comment:

  1. Thank you so much for sharing this great blog.Very inspiring and helpful too.Hope you continue to share more of your ideas.I will definitely love to read. internet marketing

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