During my entire tenure in the digital marketing industry, business at the tail end of February and the start of March this year has been the worst I have ever experienced ‘ and this is undoubtedly true for a lot of businesses across the board.
Given the major events currently playing out on the world stage, and against the lens of record growth many eCom businesses experienced during COVID, it is already safe to say that this year is shaping up to look very different.
Multiple factors have contributed to severe performance fluctuations, making it a worrying time for marketers and advertisers, and leaving many agencies open to the risk of losing clients.
With all the time and effort that is spent on developing strategies, schedules and campaigns, it is a tough pill to swallow for many marketers that the effectiveness of these strategies often comes down to factors well outside of their control, and how much money consumers have at their disposal.
The last few weeks have been a particularly dark time for many. The events of the Russia and Ukraine conflict have dominated global headlines, while at home we have seen rapidly increasing levels of inflation. The price of gas, electricity, and the fear that rents will soon increase, have created a climate of uncertainty. In marketing terms, this is not a good time for healthy conversion rates, and far from an ideal scenario for selling in general.
To compound this, performance on Facebook Ads has taken somewhat of a nosedive due to the major platform changes implemented in response to the iOS14 update. Notably, this includes removing interests, which means marketers have fewer data points with which to target people ‘ bad news for smaller advertisers who lack the data points of the larger players.
Effects on businesses and consumers
Universally, I have seen a 30% increase in CPMs [cost-per-thousand impressions], likely due to end of quarter competition increasing in the auction, as well as algorithm and product updates being rolled out from Facebook. While this might have a minimal effect on businesses with a relatively small budget, for those who have invested heavily in a high CPM spend, this increase is huge.
More generally, consumers are operating in a time of dramatically increased uncertainty and elevated fear about current and future circumstances. Digital marketers are familiar with crunching the data, but it is important to remember that each number correlates to a real person on the other end of the screen, who, for the most part, are dealing with the same fear that is also present in the market at large.
Uncertainty for marketers
It is often the natural reaction to look at these times of high performance fluctuation and assume you must be doing something terribly wrong.
It is therefore important for marketers to take stock of the wider picture, within their industry as well as nationally and globally, to get a clearer idea of how the macroeconomy is having an effect. The results we are seeing are not necessarily down to any mistakes we are making, but are instead highly correlating to these developing circumstances, which are largely outside of our control.
Your ads and your strategy might be the best they can possibly be, and in any other circumstances might otherwise be effective, but given the current situation, still may not lead to a conversion.
Overcoming advertising adversity
None of this means advertisers and marketers are powerless to do anything to change these results, however. As the popular saying goes, when times are good you should advertise. When times are bad you must advertise.
In times of increased uncertainty, such as the last few weeks, it is crucial to be able to pause, take stock of the situation, and analyse the data at your disposal so you can effectively adjust your approach. As in all business, the ability to pivot when things are not working out is crucial.
Facebook advertising, for example, is still an excellent fit for the vast majority of product businesses and will produce positive results ‘ if the right approach is taken. It simply requires figuring out an appropriate strategy, as there is no one-size-fits-all solution.
Whether the approach is ABO or CBO, or your leveraging Bidcaps & Costcaps I fundamentally believe there’s a different solution out there for every brand/account, sometimes it’s about persevering and pushing to find that route.
There are so many factors at play when it comes to fluctuations in expected performance, which is why it is so important to understand the circumstances that are outside of your control. Changes in the macroeconomy are always at play, and have knock-on effects across all sectors and industries.
Remember to take a pragmatic approach, and instead focus on what you can do, which ultimately comes down to being willing to test and try out new approaches to mitigate these external circumstances.