Long-Term Business Growth, Same Ad Spend

An impending recession. Rising inflation rates. Supply chain strain. Constantly shifting consumer behaviors. And a fluctuating economy. With so much uncertainty in today’s ecommerce landscape, many businesses are cutting back on marketing – and neglecting their long-term business growth in the process.

In fact, according to ROI Revolution’s 2023 State of Digital Marketing Survey, only 42.1% of businesses are increasing their marketing budget this year, compared to 53.7% increasing their budget in 2022.

But what about your brand’s long-term success? Reactively cutting budget in the short term can have detrimental impacts to your growth down the road. On top of that, your competitors are likely pulling back on their marketing budgets right now, which means that right now, your brand has a great opportunity to get in front of your target audience with less noise.

Instead of decreasing your marketing budget, here are some things you can do to position your brand for long-term business growth, success, and profitability.

Don’t neglect the upper funnel

30% of PPC performance is driven by brand messaging and awareness. If you cut upper-funnel spend now, you’ll harm your brand’s long-term growth – especially if you cut at a time when many of your competitors are cutting back, which opens up the marketplace for your brand to stand out.

Short-term profitability wins can’t always be prioritized over positioning your business for long-term success.

During the last economic downturn, 63% of brands saw ROI improvements by increasing their ad spend. That trend also happened during the early phases of the COVID-19 pandemic.

Paid social is naturally more upper-funnel, and the gut instinct for many businesses is to proactively pull back here – but that’s dangerous. Be intentionally reactive to performance trends. Cutting back too early will dry up your funnel and hurt your growth goals down the road.

Reallocate your budget strategically

It may sound like a dream, but it is possible to grow your ecommerce revenue without increasing your ad spend by strategically reallocating your marketing budget.

Take a high-level look at where your budget goes across channels. Do you have any low-performing campaigns where your ad spend is being wasted? How can you take those same ad dollars and apply them to some of your top-performing campaigns to make them even more successful?

If you’re reallocating your ad spend, you don’t necessarily have to put it into another channel or campaign. Why not amplify your investment in paid search, social media, or email/SMS by making strategic optimizations to convert more of the traffic you’re already getting? If you put those low-performing ad dollars into optimizing for conversion rates, you can make your dollars work smarter by gaining more conversions without having to spend more on ads at all.

On average, the brands we partner with on paid search and conversion rate optimization are able to increase ROI by 11x in just one month! To learn more, read our blog on reallocating your budget to get more conversions.

Stay on top of the latest in digital marketing

In a constantly shifting landscape, having a thorough understanding of what’s going on and why can help your business make the best decisions. Not sure where to start? Here are some of our top resources about the state of digital marketing today:

Tying it all together: Achieve long-term business growth without increasing your ad spend

Warren Buffett has said to “be fearful when others are greedy, and greedy when others are fearful.” At a time when many of your competitors are cutting back on their marketing budgets, your brand can stand out by maintaining investment and building awareness among your ideal customers.

But identifying opportunities to reallocate your budget or to focus on the upper funnel isn’t always easy. With a team of ecommerce experts by your side who are in the weeds with digital marketing every day, your business can thrive beyond what you currently imagine to be possible. To explore untapped opportunities for your brand to save money and grow profitably, send a message to our team today.

Sources

ROI Revolution, 2023 State of Digital Marketing Survey.
Marketing Dive, Marketers gain ROI during recession by increasing media spend, study says.