With the world turning to online solutions due to several countries going into lockdown the price of advertising appears to be increasing. Google Ads is even more competitive than ever as companies that never used the platform are now actively seeking out customers and websites with high traffic are increasing their prices as demand for advertising space increases.
One of the main solutions to the currency pandemic for many businesses is to look for online solutions. The latest craze, or better put ‘demand’, for online advertising space is affecting both newcomers into the digital marketing space as well as for those that have been using digital marketing as part of their integrated marketing plan for quite some time.
Existing Businesses
Suddenly the competitor analysis for local and global businesses has changed. New entrants into their digital marketing space are popping up left, right, and centre. Suddenly the cost of a click for a keyword on paid ads service has risen by as much as 50% and traffic from these platforms has decreased while the budget has not changed.
Existing businesses are finding that for the same monthly budget, they are seeing not only less traffic but inevitably they are also bringing in fewer sales.
New Entrants
We can split new entrants into the digital marketing space into 2 groups. Those that reacted quickly to business closures as a result of government lockdown and those that started mid-way.
· Early adopters
Businesses that got in early will have seen the cost of advertising slowly increase making it difficult to judge whether or not their decision to advertise online is a successful one. As we passed through March when advertising costs were relatively stable, we are not in July and costs are through the roof. Each month the same ‘average cost’ for a keyword on Google or Bing has risen in most industry sectors.
Likewise, advertising costs on platforms that specialize in getting a business logo or advert onto a website with a high and loyal reader base is also on the rise.
Companies that were fast to react to lockdown statuses were privacy software providers, infographics companies with catalogues of infographics, video software, graphic design software providers, and generally companies that offer packaged solutions that act as an alternative to hiring someone to create these digital marketing tools.
We also saw a huge rise in crypto, finance, online casino, clothes, and food services. All services that online users can sign up for online whether it is an account for finance or entertainment or online delivery services.
This has made things very difficult for small businesses. For example, if you own and run a clothes store and decide to go online because your store has had to temporarily close due to lockdown, maybe you decide to try and sell online. Well, the issue here is all the large corporations with huge economies of scale have also ramped up their online delivery service advertising making it almost impossible for the little man to challenge in this digital marketing space.
· Latecomers
For those that got in late, the main barrier to entry is cost. It could be that a business has just decided to launch a digital marketing campaign, but after reviewing the costs, some of the most popular advertising platforms are just far too expensive.
Other issues, which will cover in the next section, is previous quotes from digital marketing companies may have changed due to the massive swing in digital marketing costs. For example, a marketing company may have provided a quote in March and in July the client decides to approve that quote.
The issue for the marketing company is now the cost implications involved with digital marketing compared to the date of the original quote have changed dramatically.
Marketing Companies Suffering
As quotes are continuously changing, marketing companies are also finding things difficult in the online marketing space. Quotes made just a couple of months ago are in danger of no longer being valid because the price of digital marketing on certain platforms has increased. Going back to the client and explaining costs have increased could result in losing the client altogether.
Not only this, so many business sectors – most notably travel - have completely shut down their marketing budget.
Some Small Businesses Are Succeeding
With the slow burn reopening of economies, there are tons of restaurants and services that are reopening. Some marketing companies have been very clever to spot new search phrases being used such as ‘restaurants open near me’ or ‘Italian restaurant open near me’.
Before lockdown, these search terms were popular minus the word ‘open’. However, now people are looking for restaurants that are guaranteed to be open. Therefore, to be successful in the online digital marketing field right now, certain industries are being inventive with the way they attract website traffic or advertise their services.
At this moment in time, it is difficult to predict what the future holds. Will the digital marketing industry eventually cool down? Maybe it will as more companies exit certain platforms due to budget restraints. This could see the costs start to reduce.
That said, maybe the current price level will remain and we will see less small businesses on these advertising platforms as those large corporations and brand name continue to increase their online advertising budgets to compete with other firms with large economies of scale.
One thing is for sure. We are in for a bumpy ride in the future and no matter whose predictions you read when covering the topic of the future of online marketing, we cannot be sure who is right and who is wrong. Us marketers just have to sit back and wait!