Today is an unprecedented period in history. The coronavirus has shifted the performance marketing landscape for everyone. And these times call for us to understand the past, think creatively, and re-imagine how to adapt and continue moving forward in the performance marketing industry.
We’re here to help.
CAKE is rolling out initiatives such as offering free 24/7 support for ALL customers, and we are committed to help you and the community to navigate through these unique and evolving challenges.
Insights to consider in the wake of the coronavirus
Based on lessons learned from past economic downturns, current data, and our industry knowledge, we’d like to share insights that might be useful to you.
Additionally, CAKE works with hundreds of companies around the globe, so we’re in a unique position to view how the coronavirus is impacting performance marketing. We’ll continue to share insights as the situation evolves.
For now, here are suggestions to consider:
- Explore new verticals – Unfortunately, the impact of the coronavirus will result in a downturn for some industries. However, this creates opportunities for other verticals as well.
For example, the USA Chamber of Commerce reported industries that are currently thriving include grocery stores, landscaping/yard care, and delivery services. Health and wellness products such as yoga mats and at-home fitness apps have experienced significant sales spikes as consumers are working-out at home. And similar to the 2008 economic downturn, expect financial services offers to be in high demand as consumers are more concerned about cash flow, foreclosure, credit repair, etc.
Below is a chart from a March 18 Business Insider article that shows a high-level view of the impact of the coronavirus on various industries. The data is from Moody’s Investors Service global report.
Essentially, there might be less money to invest in some areas, however as the economy shifts, so do the needs of consumers.
- Keep in mind the short- and long-term impact – In the short-term, measurement strategies and goals should be adjusted.
It’s also a chance to prepare for the next upswing. Take the time to nurture long-term relationships and build a solid foundation for your business by diversifying your campaigns, which prepares you to be ready to capitalize when things settle down.
It is sensible to consider changing the focus towards vertical markets less affected by the economic downturn now, but remember there is still plenty of room in the future for building resilient affiliate marketing and lead distribution campaigns across multiple industries.
So, continue to monitor industry trends and updates. For retail, follow Coresight Research’s monthly reports. These deliver updates on U.S. and UK retail sales, U.S. retail traffic and in-store metrics, select U.S. retailers’ same-store sales, and key global consumer indicators.
For example, consumers have become more cautious about shopping in public places and turning more to online shopping.
As social distancing and shelter-in-place policies take hold, people are spending more time indoors, leading to a boost in e-commerce. In the U.S., e-commerce ad spending jumped from $4.8 million in the week of Feb. 17 to $9.6 million during the week of March 9, according to MediaRadar.
- Adapt to change – The current environment continues to shift at a rapid pace. Being able to adapt to these changes is key. As venture capital firm Sequoia Capital shared in an early March note to its investors, “Having weathered every business downturn for nearly 50 years, we’ve learned an important lesson – nobody ever regrets making fast and decisive adjustments to changing circumstances.”
This view can be applied to your digital marketing strategy. Stay nimble, but consider avoiding marketing spend reductions. Brands that maintain or even increase ad spend during an economic downturn (when competitors are cutting back) can improve market share and ROI at a lower cost than during good economic times. So, if possible, now is not the time to cut ad spend in digital marketing programs.
However understandably, this may not always be doable. In that case, here is why advertisers should consider shifting digital marketing more specifically to performance marketing.
Why performance marketing now?
A major advantage of digital marketing in general, besides that it does not require face-to-face interaction and the current spike in audiences online, is the fact that it’s measurable. Marketers can monitor and analyze insights into which campaigns and channels help achieve results, from the top of the funnel through conversion, which in turn boosts ROI.
However, though digital marketing continues to be strong, ad spend projections have recently been lowered. EMarketer reduced its 2020 global ad spend forecast, revising estimates down from $712 billion to $691.7 billion due to the coronavirus effect on media and commerce.
When advertising budgets are reduced and scrutinized, marketers will still be under pressure to run campaigns that produce results. Therefore, organizations will be looking to diversify ad spend, focusing on the channels that have the lowest CPA, lower risk, and high ROI.
This is where performance marketing becomes more relevant in the digital marketing mix.
According to the Performance Marketing Association (PMA):
Performance Marketing is defined as a comprehensive term that refers to online marketing and advertising programs in which advertisers and marketing companies are paid when a specific action is completed: such as a sale, lead, or click.
So, due to its very nature, performance marketing (which encompasses affiliate marketing and lead distribution) includes some of the most resilient online channels out there. They are proven, cost-effective channels that pay only when there is performance, so demanding accountability, they are less risky.
Aligned with the trend towards more people buying online, the impact will be that affiliate business models are particularly well placed to benefit.
Bringing it all together as a community
Our community has never been more important and we are here to help you stay ahead in an uncertain environment by being readily available to answer your questions, plus provide support and guidance. We’re committed to help you and your business, though obviously the very top priority is to stay safe and look out for yourself, family, friends, coworkers, and others who may need extra assistance.
In these uncertain times, CAKE is well-positioned to continue powering your performance marketing programs, with our promise of stability and reliability. In fact, CAKE was originally established to address needs stemming from the 2008 financial crisis. We listened to the market, responded with what was required, and grew into the largest performance marketing software vendor.
With the recent acquisition of CAKE by Constellation, a $20-billion international provider of market-leading software and services, we’ve further extended our financial stability. Plus, we are well-prepared and committed to continue delivering the industry’s most reliable and scalable infrastructure to help drive your continued success. We are fully operational and have taken measures to ensure that there is no disruption to the CAKE platform or the level of service you require.
Thank you for your partnership. We are here for you now, and in the future. Please feel free to share your thoughts, questions, and suggestions by reaching out to our team here.