Just like many industries, digital advertising is looking at significant revenue losses amid the economic fallout of the COVID-19 pandemic. According to eMarketer, growth in digital ad spending will come in at around 1.7 percent this year — a big difference from the original projection of nearly 17 percent — with Google and Facebook seeing some of the greatest losses.
For now, spending is expected to bounce back in 2021 and continue growing throughout 2022, but the current drop might be giving some marketers pause about where to allocate budgets. Thankfully, digital advertising remains a good investment as long as you invest in the right areas.
Industry weighs heavily on marketing spend
When it comes to digital advertising, all spenders are not created equal. Travel, retail, and auto are the main drivers behind the decrease in ad spending, according to Variety, which makes sense considering how the pandemic has hit the economy.
This drop in spending makes for an attention-grabbing headline, but it’s important to remember that other industries and markets are doing well, with some even seeing a boost in revenue.
The e-learning market, for example, is set to rake in more than $375 billion USD by 2026, thanks in part to its surge in adoption after the coronavirus pandemic forced schools to close. Companies shifting to a remote model has been a boon for other software markets like video conferencing and cybersecurity. With schools closed and offices empty, companies are still investing in B2B software, even if slightly less than they were pre-COVID.
Lead generation remains a good investment
While there are fewer statistics about how COVID-19 has specifically affected lead generation, it’s safe to say that outsourcing some of your lead generation remains a good investment, as long as you’re partnering with trustworthy agencies. According to HubSpot, lead generation remains the top priority for marketers in 2020. In many ways, the pandemic has simply intensified the need for lead generation services.
- With many companies now operating on a distributed workforce model and with travel restrictions and stay-at-home orders in place in various cities, sales teams have fewer opportunities to sell face-to-face.
- Reaching people on the phone might be more difficult since many office phones now forward to people’s personal mobile devices.
- Potential buyers with children home from school may prefer to research software purchases on their own time and may be less inclined to speak directly with a vendor early in their search.
- Given the initial heavy impact on businesses earlier in the year, many marketing departments might be racing to make up for lost revenue while lockdown restrictions start to ease in some parts of the world. Buying marketing qualified leads (MQLs) from a reputable partner is a good way to supplement internal marketing efforts and fill more pipeline.
For marketers looking to make up for lost business earlier in the year, lead generation offers a good opportunity. But, as always, choosing the right partner is imperative to seeing good results.
The times they are a-changin’, so look for agencies that are changing, too
Aside from impacts on the client side that might make partnering with a lead gen provider more appealing, the pandemic has also had serious impacts on the agency side that can benefit marketers. According to Marketing Week, a survey of different marketing agencies around the world revealed that lead generation industries are coping with the pandemic by being more flexible with client needs and by offering creative new services.
Of the companies surveyed, 29 percent said they were exploring new ways to support clients, and 12 percent reported taking on more tasks in-house. This translates to higher quality leads for clients, sometimes at a lower cost.
The same is true here at TechnologyAdvice. When asked how his team has responded to client needs during the pandemic, Senior Manager of Client Success John Fleming said, “We’ve been able to address our clients’ changing needs in this challenging environment through diversification in marketing tactics, leveraging our US-based call centers for dedicated outreach, and launching our new machine learning platform.”
John also spoke to some different ways companies can push themselves to go above and beyond for clients. “We might look at any given campaign and apply arbitrary constraints to challenge our thought process,” he said. “For example, ‘If we had half as much time to fulfill this campaign, what would we do?’”
The way marketing and lead generation agencies are responding to the pandemic varies greatly across companies, so tech marketers would be wise to ask agencies about how they’ve shifted practices when vetting potential partners. Finding a partner who takes a creative and adaptive approach can make all the difference between successful and disappointing campaigns.
PPC ads are rebounding while email sees a boost
One major callout from the new eMarketer report is that spending on search ads was down, at least for Google. Part of this was due to the blow dealt to the travel industry, but reduced conversion rates also played a role. That seems to be changing now, according to data from WordStream.
Image credit: WordStream
Judging from this graph, paid search conversions started ticking up again halfway through April, with search conversions on Bing seeing the biggest gains. When asked when companies should resume digital ad spending, WordStream Senior Account Manager Holly Niemiec said, “Now!”
Though not covered in eMarketer’s report, email is having a bit of a moment right now. According to research from Campaign Monitor, send volume remained nearly unchanged, increasing 0.06 percent between March 2019 and March 2020. This isn’t exactly earth-shattering news, but the increase in open rates is worth noting.
Email open rates have been going up year-over-year, but the early months of 2020 saw big open rate increases on a monthly basis as well. Between February and March, for example, open rates increased by as much as 16 percent.
Email is slated to grow even more over the long term, with Radicati projecting the number of email users to grow to over 4 billion by 2022, with many users maintaining more than one email address. This is good news for B2B marketers looking to gain more top-of-the-funnel (TOFU) leads, as paid email campaigns like content syndication and sponsored newsletters stand to offer good ROI if current trends and projections hold.
The future remains uncertain
Perhaps one of the most concerning aspects of the coronavirus pandemic for businesses is the uncertainty. According to ProPublica, scientists are confident that pharmaceutical companies will be able to develop a vaccine, but when that will happen and how effective it will be once it arrives remains up in the air.
Source: Marketing Week
Referring back to the Marketing Week survey above, marketing agency leaders were also unsure about how long the business impacts of COVID-19 will last. The majority of respondents, 35 percent, said they expect the effects to last anywhere from six to twelve months, but 31 percent also said they expected impacts to last no longer than six months.
Unfortunately, none of this is very reassuring for businesses looking for answers on how to proceed next, but one thing remains clear — when planning digital marketing spend, marketers should think long term about how they will weather the storm. You want to reduce unnecessary spending to prepare for bigger hits like the one we experienced earlier this year, but you also don’t want to neglect your pipeline.
Learning how to walk this tightrope will be a challenge for everyone, but continuing to invest in digital advertising and lead generation will likely remain a part of that balancing act.
Partner with TechnologyAdvice to help manage uncertainty
At TechnologyAdvice, our purpose is to create opportunities for buyers and sellers of business technology as well as our team members and community. We know it’s challenging to choose who to partner with right now because we’ve faced the same challenges. If you think lead generation or digital advertising might be right for your business, explore our Solutions page to learn more.