Negative headlines to the contrary, there is sufficient historic evidence to suggest that the bad economic times we are mired in at the moment will pass. In the meantime, how can a real estate developer (or for that matter, any marketer affected by the current downturn) stay the course and position for success when the pendulum inevitably swings back?
The short answer: market smarter. In the Internet age, that's never been easier or more affordable.
According to Jack Abbott, CEO and chief client advocate of Interactivate Inc., when the economy goes south, it's axiomatic that the marketing budget is the first to come under scrutiny.
"Because any program that can't be measured is vulnerable," he said, "branding initiatives often take a backburner to anything that will drive traffic. But the traffic doesn't want to be driven or pushed anymore, and the marketing environment today is significantly different from the one we dealt with during the last downturn."
He added, though, that the leads are still out there.
"People are still buying homes and everything else they've always bought," he said, "but media outlets have fragmented into thousands of channels. With fewer marketing dollars to spend, you're faced with either spreading your reach paper-thin at the expense of frequency or condensing your efforts to a few tactics. Either way, you become less visible."
Making matters worse, there's more competition than ever before vying for the same eyeballs, and those eyeballs are tired of being bombarded with irrelevant, disruptive messages. So what's a smart marketer to do?
Abbott cautioned marketers from going dark. As volumes of case studies from past recessions attest, going marketing-dark is a mistake.
"Marketers who disappear from the marketplace do serious, sometimes irreparable damage to their brand and their bottom line," he said. "While you're out of play, your competitors gain share at a noncompetitive rate. When you want back in, you'll pay a premium to regain it."
Abbott recommended that marketing executives should evaluate the organization's marketing plan and red-line everything that has consistently failed to deliver or can't be measured.
"You probably don't want to completely abandon branding initiatives," he said, "but you might consider cutting back to essential programs and tweak the messaging to include a more promotional pull with a measurable response mechanism. Your goal is to free up funds so you can test programs that can be executed quickly, measured accurately and adjusted easily."
In the end, and at the beginning, online lead generation is the name of the game. According to International Data Corp., online lead generation has been growing at 71 percent year to year, at the expense of traditional marketing channels. And there are good reasons why paid search engine marketing programs like pay per click (PPC) continue to siphon ad spend: Paid search works; you can get in and out of it quickly, adjust campaigns easily and control the expense. Even better, consumers love search because they control the experience.
Unfortunately, the success of search marketing is driving costs up as more advertisers bid for the same top-performing keywords. If you're a builder bidding on the keyword phrase "new homes," be prepared to pay anywhere from $5 to $8 per click, with no guarantee that those clicks are new prospects, quality prospects, bored kids or an unscrupulous competitor's offshore click fraud perpetrator.
At the end of the day, for every quality lead your PPC campaign delivers, you've also paid for a lot of junk clicks. Factor in non-unique clicks, agency markup and campaign management fees, and that $8 lead could end up costing you $10 or $15 dollars. With a marketing budget that's already tight, can you afford to waste that kind of money?
Abbott noted that millions of searchers key in millions of almost unique search phrases each day. Many of them are looking for new homes. How can you make sure they find yours? Grab the long tail. Researchers have noticed that the percentage of longer search phrases (as opposed to one or two words) keeps going up. In 2004, more than 40 percent of searchers used three or more terms; by the last quarter of 2007, the average Google query consisted of four words for the first time ever.
"Consumers have figured out that the more precise their search query, the more likely the engine will serve up relevant results," Abbott said. "What you as a marketer can extrapolate is demonstrable evidence that the long tail theory is valid, that there is indeed profit potential in marketing to the 80 percent of searchers who are entering nearly unique phrases."
With a typical PPC program, you compete for the same high-demand, high-cost keywords and you pay for every click, including multiple visits by the same person and fraudulent clicks. You may receive a high volume of traffic, but quantity is no guarantee of quality. By contrast, a long-tail, leads-on-demand model is based on the premise that the more precisely your keywords match searchers' queries, the more likely they are to click on your ad and become quality leads. You'll also be pulling traffic from the dozens of smaller niche engines, effectively extending your reach for free.
"Instead of paying per term," said Abbott, "you pay an average price per click (as determined by Google and Yahoo! and updated weekly) using your top 30 to 40 keywords as the basis. Your campaign is built around hundreds of keywords and phrases determined by a software program. Regardless of what words are clicked on, you pay only the average and you pay only for each new unique visitor, eliminating the wasted cost of multiple clicks by the same visitor and the risk of click fraud. You can also apply the intelligence gained analyzing your leads-on-demand campaign to optimize your other marketing initiatives, creating customized landing pages, targeted e-mails and better conversion paths on your Web site."
Bad economies don't last. Abbott encouraged marketing professionals to weather this one with a leaner plan that emphasizes lead generation programs focused on quality not quantity, measurable programs and efficient buys that extend your reach and your marketing dollars.
Donovan is vice president of Interactivate Inc., a San Diego-based integrated strategic marketing company with a branch office in Irvine.