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When the going gets tough, go online


Every cloud has a silver lining. Especially if the cloud is economic meltdown and the silver lining is delivered digitally. Robelen Bajar follows the rainbow.

I don’t know about you but I am sick of the daily media diet of economic doomsday prophecies. It’s not only in the news, it’s also in my inbox, it’s in my daily dose of Facebook and Twitter feeds and has now invaded many dinner-table conversations. It’s as if we’re willing ourselves into recession. And I’ve had enough.

Thankfully, I am not alone. A November 2008 Melbourne IT customer survey of 1,141 small business owners in Australia & New Zealand revealed that, despite prolific reports of economic gloom, they remain optimistic about the future – thanks to the internet.

Of the 814 small businesses surveyed in Australia, 66 percent planned to increase their online marketing activities in the next twelve months. This result was mirrored in New Zealand and seems to be a sentiment that is shared worldwide. In the UK, online is the only media predicted to grow in 2009, with search advertising expected to be the main driver for growth. A survey by MarketingProfs of 600 US marketers in October 2008 found that 60 percent planned to increase their online advertising spend in reaction to the downturn.

There is much debate among US pundits about the rate of growth in online ad spending in the midst of a recession – from a measly three percent to a highly optimistic 19 percent growth in 2009. But there is one thing they agree on: online advertising is a safe, sensible and cost-efficient alternative when allocating a shrinking marketing budget.

On the home turf, the Melbourne IT survey showed that small businesses plan to invest their marketing dollars in turning their websites into lead generation machines through search marketing to attract qualified prospects and site improvements that enhance customer experience. Presumably the latter involves web 2.0 features, such as blogs, videos, podcasts, social networks and applications that engage customers and open their hearts, as well as their wallets.

And they’re probably on to something. The Customer Shopping Experience Report released in the US in September last year showed that consumer expectations have risen in step with the development of social networks and blogs as well as examples set by online innovators such as Google and Facebook. We have simply been spoilt by all the widgets and applications so readily available in social networks that we question why our local florist still doesn’t have a website or why we still need to take a number at the supermarket deli. Personally, I’d like them all to be my friends on Facebook or Twitter and send my orders via live feed.

Non-believers will be surprised to learn that, according to the Melbourne IT survey, internet/search engines ranked as the second highest source of leads behind relationship marketing such as word-of-mouth, networking and face-to-face. It ranked ahead of traditional forms of B2B marketing, including direct mail, print and directory advertising, as well as telemarketing. More interestingly, almost 25 percent are looking to the internet as a way to access the previously out-of-reach international markets. And according to analysts both in the US and the UK, trends like these are likely to continue.

Analysts in the US are already talking about the maturation of the online shopping channel and pointing to its anaemic growth in November 2008 as a clear sign, pointing out that the weak economy merely accentuated the already declining sales growth. That may be so in their market, but in Australia we’re just getting started. In the Melbourne IT survey, over 28 percent of Australian small businesses surveyed said they did not invest in online marketing at all in 2008, while 41 percent spent between 1-20 percent of their marketing budget online and less than 10 percent spent between 21-40 percent. Only seven percent allocated between 80-100 percent of their budget to online marketing. Clearly, Australian small businesses have so far only engaged in toe-dipping.

There is no doubt online marketing delivers more measurable, highly targeted and accountable results than traditional forms of marketing. With clever use of web 2.0, the internet gives marketers a greater ability to keep customers interested, happy and spending more. And, depending on your industry, a dollar for a qualified lead (and sometimes even less), is money well spent. Recession or not.

Robelen Bajar is Group Marketing Manager at Melbourne IT, which helps entrepreneurs start, grow and manage their businesses online.