Marketers and paid media specialists regularly use eMarketer’s annual ad spend forecast to capitalize upon emerging market trends. eMarketer recently offered a $712.02 billion 2020 ad spend forecast, a 7.4% increase from 2019. But now, we live in a COVID-19 world, and eMarketer subsequently adjusted their forecast to only $691.70 billion, a whopping $20.3 billion drop in expected advertising expenditures in 2020.
As marketers began to identify and incorporate 2020 advertising trends into their professional toolkits, in addition to preparing for the changes Google introduced in January, no one could have anticipated a new virus ravaging the global economy. COVID-19 has indeed presented new challenges that seem almost impossibly overwhelming, and many marketers are legitimately wondering, how do we thrive in this period?
Businesses have responded to COVID-19 in a myriad of ways. Some have ramped up ad spend, while others have stopped running ads altogether. And while these uncertain times have forced us all to recalibrate our short- and long-term market expectations, the real tell for how to respond lies in the service or good that you provide.
The effects of COVID-19 vary and are industry-specific. Some businesses will thrive in the short-term, like toilet paper or fabric manufacturers. Some may even thrive in both the short- and long-term, such as companies that produce disinfectant products. But, many companies are facing uncertain futures, and to mitigate potential future losses, they need to act immediately and decisively.
Three types of businesses we've identified in a COVID-19 world:
Booming businesses: businesses that offer a product or service that's both high in demand and situated to meet that demand. These businesses are likely experiencing high growth rates.
Unfilled Glory businesses: businesses that offer a product or service that's high in demand but not situated to meet that demand. These businesses are likely experiencing supply and warehouse problems.
Bleeding businesses: companies that offer a product or service that's not in demand. These businesses will need to get into rebound mode.
You know your industry and can likely identify which category best describes your current situation. With this guide, we'll walk you through the steps you should take to ensure that you not only thrive during this period but emerge from it stronger than ever.
How will this guide help me?
One thing that all businesses have in common, no matter the industry, is customer data. By utilizing the customer data that you already have at your disposal, we'll show you how to apply it to campaigns using DataQ, our paid media intelligence tool, to build advanced audiences for strategic targeting.
By the end of this article, you will have an arsenal of proactive strategies at your disposal that can and will activate key audiences and identify the most relevant e-commerce metrics for you to focus on.
We'll go through each type of business listed above and discuss:
- Your current situation
- Factors to consider
- Key audiences to target
Your new business model moving forward should center around finding and focusing on your BEST customers.
Congrats! You're in high demand, AND you’re situated to meet those market demands. If your business falls in this category, now is the time to be aggressive and maximize on this demand.
To ensure that you build on this momentum, though, we suggest that you focus on two key factors:
- Customer acquisition cost (CAC)
- 12-month customer lifetime value (LTV)
Your Booming Plan
Not all customers are created equal. Customers vary in cost and they don’t all hold equal value. Weigh your CAC to target customers more strategically.
You have your high-, mid-, and low-value CACs. Each CAC level represents a customer value that should coincide with your 12-month LTV. If you use your CAC in tandem with your 12-month LTV, you will successfully attract the best-fit customers, remarket effectively to existing customers, and exclude customers that aren't a good fit.
Here's how to read and use customer acquisition costs:
High Value: Customers that have a high CAC are likely new to your brand and have an above-average LTV. Create an audience of high-value customers to use as a lookalike to continue attracting customers of the same caliber.
Mid Value: Customers that are in-between your high- and low-value CAC are likely existing/past purchasers. Create an audience of mid-value customers to use in your remarketing efforts.
Pro-tip: Take a look at your store's purchase frequency to schedule campaigns that coincide with that timeframe.
Low Value: Customers that are on the lower end are likely not good fits and should be used as exclusions in the previous two targeting efforts.
How to build your audiences in DataQ
DataQ comes with pre-built audiences that include the three customer groups described above.
Activate these audiences with our drag and drop features.
Sign up for a free 2-week trial to populate these templates with customer data from your eCommerce platform to strategically target them in campaigns.
Unfilled Glory Businesses
Your situation is not ideal; however, people are still interested in your brand, which offers you a unique opportunity. During this time of uncertainty and instability, you'll want to focus on existing and past customers.
To ensure that you keep loyal customers, we suggest that you focus on these factors:
- Past customers with high LTV.
- Customer service.
Your Unfilled Glory Plan
Utilize acquisition tactics that funnel toward a finite customer subset that allows your customer service to shine. We recommend that you focus on your high-value customers, who represent high LTV and high repurchase frequency.
Two tactics to accomplish this:
- Website Experience
Provide two paths, one for your loyal customers and one for guests. Having an experience dedicated to your loyal customers will show them how much you value their business and will offer opportunities to personalize their online shopping.
- Acquisition Campaigns
Only focus on remarketing to your high-value customers. It is essential to keep your high-value customers happy and thirsty for more. Still, now more than ever, it is critical to prevent these valuable customer subsets from churning.
Unfortunately for Bleeding Businesses, 2020 hasn’t started off well for you. We’re so sorry this has happened to you, but fear not, there is still hope for you! Since consumers, or the government, have identified your product or service as “non-essential,” you should focus on:
- Creating a strategy for the rebound
- Staying top of mind
- Hyper-focusing on your high-value customers
- And message refinement to address the current situation.
The Bleeding Plan.
Now it's more important than ever to be strategic with your ad spend to ensure that you stay top of mind, especially for your high-value customers.
To enact this plan, we recommend that you:
- Focus on branding. Create awareness by remarketing to customers with high LTV and above-store average purchase frequencies.
- Promote social responsibility and optimism given the current economic uncertainties. For example, if you're volunteering or contributing to your community in some capacity, showcase that! It'll remind customers why they love your brand and want to buy from you.
- Create lookalike audiences and target competitor keywords.
- Remarket to your high-value existing/past customers via email, Youtube, and Banners.
Your Long-Term Bleeding Plan
Prepare for the post-COVID 19 economic rebound. To do so, here are a few things that you should put together:
- Build your contact database to house emails and other pertinent information about your customers so that you're ready when the time comes.
Pro-tip: connect your eCommerce platform to DataQ to populate lists that include all customers in addition to niche lists like your top 1,000 customers, customers with high purchase frequencies and more.
- Drive high-quality traffic to your website. A few ways cost-effective ways to go about doing this are: blogging, posting on social media, email, online directory listings, and online ads.
- Create an awareness budget to your CAC for May and June. And also create a budget for the three months preceding this COVID-19 period as it will likely be more accessible to convert customers.
We know that these are trying times. We also know, given the new realities that we’re facing, many of you will be tempted to hit the brakes on ad campaigns. But you don’t have to pursue this seemingly attractive option in order to avoid negative long-term economic consequences for your business.
By identifying whether you’re a Booming, Unfilled Glory, or Bleeding business, we’ve provided you with tangible steps for successfully navigating this new business climate.
Take advantage of our free 14-day trial today so that you can learn firsthand how our features can help you activate your high-value audiences.