Media costs have risen across virtually all major ad platforms, from Google and Meta to Amazon and TikTok. Even traditional media is expected to increase another 2%, with television set to see a 15% increase. Small businesses advertising on digital platforms and traditional media have felt the pinch as a result.
First, why are digital ad prices rising? Inflation is the easy answer, but it doesn’t stand alone as a scapegoat here.
- Platforms like Facebook and Google benefitted from the 2020-21 pandemic, where most of us were trapped at home scrolling through our feeds. Many advertisers pulled back, especially those that rely on travel, in-store visits, or anywhere packed crowds used to gather. This meant more ad inventory, a bigger audience, and fewer advertisers to fight over them. That combination reversed when people returned to work and advertisers returned to the scene.
- Apple’s 2021 privacy changes have shaken the market, making it more difficult to understand the effectiveness of marketing to the half of the population using i-devices.
- New and developing platforms, like TikTok, are seen as good alternatives to rising costs while capturing a potentially new audience, but these platforms haven’t yet proven to be successful replacements for traditional channels.
Marketing analytics dashboards continue to show that advertisers are paying more and getting less. What should business owners do now to get the most out of their digital marketing?
Business Insider calculates the latest ad increases at +61%YoY for Meta (that’s Facebook and Instagram), 161% for TikTok, Google display up 75% and Google cost per click (CPC) ads up 14%. If your budget stays the same year over year, you’re getting that much less in reach each year. Plan accordingly and increase budget to maintain your position.
Know your digital ad return on investment.
For many small businesses, tracking ad effectiveness can sometimes take a back seat to launching the ads. In times like these, knowing more about your ROI can save you money and help you focus your spending in areas where you know it will pay off.
Tracking and reporting are important to determining your advertising ROI. One channel may bring you more traffic while another results in more conversions or sales. Understand the role each channel plays in getting prospects to your website, and how they may work together. More on that next.
Know the effectiveness of your digital ads.
Dive deep into analytics to understand which of your campaigns influences the others. It is rare that, as consumers, we buy based on a single advertising message. Check Google Analytics for your assisted conversions report – that will show you which other marketing channels helped contribute to your marketing success, but did not serve as the last click that led them to a purchase or contact. You wouldn’t want to throw out a key support tactic that is helping your other marketing tactics get the job done. When ad costs increase, it can be tempting to pull back and reduce the number of marketing channels you use. Instead, focus on making your marketing more effective and impactful, and you’ll see gains without sacrificing quality.
Test digital ad messages as the economy pivots.
Becoming more efficient with your digital ads is an ongoing process, one that is particularly important as costs increase. There will always be trial and error with marketing messages – you should always be testing. As you find the ones that resonate most with your audience, you should start pushing winners more and test a little less frequently.
Don’t neglect your search engine optimization.
Good SEO can help bring valuable organic traffic to your site. That’s traffic you don’t have to pay for by the click. As search engines like Google recognize your site as a valuable place to send your audience, your relevance score for paid search increases. That brings your paid ad costs down. Search engine optimization is a long-term investment in leading relevant traffic to your website.
Know you’re in good company.
Your competitors are all in the same boat. Costs are up for everyone, so you’re on a level playing field with your competition. That may not feel better on the expense side of the equation, but it also comes with some opportunity.
Check for opportunities to get ahead.
Finally, there are many case studies about advertising in a recession. Brands now often see recessions the way investors do: When the market panics it can be a good time to buy in and make bigger gains. It can be tempting to pull back on advertising when costs rise and competitors get nervous. Adding marketing budget during these times can seem counterintuitive, but also it can be a pathway to gaining more market share against your competition.
Ready to take advantage of rising costs? Let’s talk.