How to increase sales? Which is the most effective marketing medium?
02/03/2011
Each year marketing managers need to allocate spend between different forms of advertising, but how do you decide which is best?
The most common method is to use last years’ figures with a bit added on. But the rise in importance of online advertising has changed this, and how do you decide how much to allocate online?
The answer should be to analyse the return from different markets and allocate accordingly. But this takes time. It should always be done, but a good starting point is to look at other data and see what others have found. This shows that online advertising is now the medium of choice for generating sales.
An extensive study by a car manufacturer in 2008 showed that marketing investments in online search marketing around model names generated a large 24% increase in sales, and investments in search marketing on generic keywords generated an outstanding 30% increase in sales. This compared to just 4% from TV advertising around model names or 3% for a press launch. Rebranding and updating the design of advertising materials helped sales by 3%. Traditional press advertising had one of the lowest impacts at just 1.5%.
The above shows conclusively how important online search marketing is for sales generation of a major player in the car industry.
Results of marketing spend by UK marketers in last quarter of 2010 show that even when economic budgets are cut, spend on internet marketing is increased with even more drastic cuts in offline and PR advertising.
The actual report (BDO Bellweather) stated that “Direct marketing, internet advertising and paid search were the only disciplines to see a rise in spend during the period, albeit at a slower rate. The report suggests that this is due to marketers looking for methods with more “predictable return” on investment, fuelling growth for these channels.
In contrast, budgets were revised down across sales promotion, main media and all other marketing, including PR and events.”
When economic conditions are tight this forces marketing managers to look more closely at the actual ROI and longer term ‘brand awareness’ and less certain forms of advertising such as PR and magazine adverts lose out, along with rebranding and new designs. It is therefore no surprise that spend on internet advertising, specifically paid search and natural search increases when the economy is less favourable.
Which is the most effective marketing medium in an economic crisis?
Cornish WebServices recommend that in times of cash shortage or poor economic outlook, that marketing spend is pushed onto the most beneficial areas of paid search (for fast results) and natural search (for best medium and long term return on investment).
