Posts Tagged ‘Downturn’

Will the Economic Downturn Affect Small Businesses? a New Perspective

The recent sub-prime mortgage crisis and the interlinked subsequent turmoil in the financial markets has generated many concerns in businesses and the general outlook on the economy. The question we want to answer is: will it affect small businesses?

There is no easy answer to this question. But let’s examine the different drivers at play.

On one hand, we have a mortgage market that’s become a lot tighter. This will make it increasingly harder for people to get mortgages. Traditionally, borrowing against your home has been one of the most common ways of funding a new businesses (according to a survey conducted by the Federation of Small Business 25% of start ups use bank loans as their main source of funding, while 49% use bank overdrafts). So these facts would indicate that the credit crunch will have a knock-on effect on small businesses by affecting entrepreneurs’ ability to raise funding.

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Online Marketing to Succed the Economic Downturn

World economy is going through one of its worst crisis in history, with many experts predicting a global economical recession, countries approving multi-billion dollars bailout programs to help their economies to survive and companies having to cut down their costs to avoid bankruptcy.

When companies start to think about cutting down on their expenditures, one of the first things that comes to CEO's and Managing director's minds is to reduce or even cancel their marketing campaigns budgets.

On the other hand CMOs (chief marketing officers) think the opposite; they believe that during an economic down turn is precisely the time when marketing plays an important role. By stopping a marketing campaign you lose contact with your clients and you stop understanding your costumer needs.

An alternative to all these problems is Online Marketing, as the name already suggests Online Marketing is any type of marketing that is done via the Internet; email marketing campaigns, search engine marketing or search engine optimisation campaigns, social media marketing, blog marketing or any other form that you could think of that involves the use of the Internet as a source to promote your brand, products or services.

Why is Online Marketing so important during an economical downturn?

I'm far from an economic expert but there 4 factors that put online marketing ahead of other marketing techniques during a down economy:

1 - Measurement

One of the biggest problems with traditional marketing campaigns is the lack of good measuring methods, with online marketing is a completely different ball game. All you need is a good web analytics package, Google Analytics for instance, to track, measure, document the effect and justify your marketing investments to you boss.

2 - Immediate Effect

It is almost impossible to know how effective a TV commercial or another type offline advertisement is. While online marketing methods have a direct value on sales; especially when we talk about search engine marketing and search engine optimisation.

3 - Good ROI

The success of a marketing campaign is measured by its ROI (return over investment); the higher the better; and there are few things beating online marketing nowadays. For every dollar spent on online marketing, marketers are making more than a dollar through sales or other conversions on their sites.

4 - Small Budgets

With online marketing you can start with a small budget and gradually increase it as you succeed, and believe me many multi-million dollar companies are basing their economic strategies around this simple principle nowadays.

The DMA estimates that expenditures with online marketing will maintain a significant growth in the coming year with more than 50% of U.S marketing dollars directed to Interactive marketing.

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