Coronavirus has affected all of us in ways we have yet to determine. It is difficult to work out how we should be marketing or whether we should be marketing in such uncertain times.
A few key industry sectors are booming like finance, news, and food. A few have mixed results like retail depending on whether you sell essentials or luxury goods. And quite a lot have bombed completely like travel, construction, and advertising (see statistic graphs on neilpatel.com). So why would you advertise now?
More people are online than ever
Think about what you are doing differently during these unique times. If you are a parent, you are likely to be juggling school work and business in addition to the usual household routine. If you are on furlough from a business that has been closed down you might find yourself with more time on your hands than usual. Many of us are developing new ways to work online and continue with our business.
According to Statista, globally time spent on social media has increased by 21%. While we are in lock-down we are spending more time than ever
- reading the news (36% increase),
- binging on Netflix (27% increase) and
- checking in with family and friends on messaging apps (22% increase)
It is the increase in spending free time on social media that is critical to a decision about continuing with paid social.
Lowest CPC for a long time
Across advertisers, in my own Facebook advertising campaigns, I am seeing cost per clicks that are lower than normal (at times as much as a 70% reduction). Statista is reporting a worldwide reduction in average CPC on Facebook from 0.11 cents in January to 0.09 cents in March.
It seems logical that advertising costs will fall during this period to attract more custom.
This great news for advertisers, however, there is one big caveat to this – if your website or app does not continue to convert at the same rate, a low CPC may not mean a lower cost per sale. This is worth checking if you are looking to advertise.
The competition may not be advertising
Facebook’s advertising revenue in 2019 was $70 billion, approximately 50% of global display ad revenue, according to a CNBC article. In Q4 2019, Facebook had more than 7 million advertisers, many of whom are likely to be small businesses. Cutting Facebook adverts is a quick way to reduce marketing spend for a small (or large) business.
A Needham analysis of Facebook’s advertising revenue in Q1 says it is likely to have been affected by two factors;
- the impact on industry sectors that are ‘at risk’ for example “travel, retail, consumer packaged goods and entertainment” which make up to 30%-45% of total revenue
- countries that are considered to be ‘hot-spots’ for the pandemic are some of Facebook’s largest sources of advertising income
While this may be bad news for Facebook and its share price, it could be good news for you as an advertiser if fewer of your competitors are advertising at the moment.
Can you still serve customers?
The combined factors of an increased audience, lower costs, and less competition means nothing to your advertising plans if you cannot continue to serve customers well. Your business must be able to deliver products or services despite the limitations of coronavirus or your advertising spend will be pouring money down the drain.
You must also be sensitive to current concerns about health & safety and the financial impact of the pandemic on consumers or business customers. Take particular care over what you are telling customers at this time.
A successful business is all about finding ways to reach new customers while meeting the demands of existing customers. Running a successful business is also about overcoming obstacles. Businesses will need to plan to make it through the uncharted waters of returning to normal trading in the next few years.
Despite feeling anxious about business during these unprecedented times, with a recession looming and worry about business recovery on any business owner’s mind, now might be the right time for your business to develop an advertising strategy to help you continue to serve your customers during and after the lockdown ends.