Economic Recession… and Online Boom?
By Anna Johnson on October 6th, 2008In a recent Search Engine Watch article, Erik Qualman makes some predications about how ecommerce and online advertising will fair during the current or impending (depending on where you live) economic recession.
Among other things, he predicts that online advertising may actually benefit as more companies shift their ad budgets online. But although online ad expenditure may increase as a share of total marketing budgets… the actual spend on Internet advertising may grow only marginally, plateau, or even decline somewhat.
Let’s face it. Many companies will simply have less money to spend, whether it’s on broadcast media or television.
Similarly, some online retailers may see more people shop on their websites. For retailers with ‘bricks-and-mortar’ stores, growth in online sales may not be enough to offset a decline in off-line sales. Pure-play ecommerce stores may, on the other hand, achieve a boost in sales.
Again, however, many consumers may just spend less. When it comes to buying ‘necessities’ they may well choose to shop online rather than offline.
But when it comes to ‘nice to haves’ they may simply cut or reduce their spending. Which means that online sellers of ‘nice to have’ products may also feel the pinch of the recession.
Regrettably, I don’t have any figures on how ‘how to’ information products tend to perform at times like this. Instinctively, I’d think that low-priced info. products aimed at helping people AVOID any of the pain associated with tough times are likely to do better, overall, than high-priced products aimed at helping people GAIN the pleasure associated with boom times.
That may mean we all start rethinking what we sell and/or how we sell it. For instance, we offer a course on how to build wealth and achieve financial security at http://www.investmentsuccessformula.com It might be wise for us to think about how to reposition that course so that the emphasis is on ensuring financial security now… Or it might be better if we shifted our attention to other products and services that are more naturally inclined to do well right now.
Or perhaps it’s a time when we – and YOU – simply focus on better serving our existing, valuable, loyal customers and subscribers. If the 80-20 rule holds true, about 20 percent of customers are responsible for 80 percent of sales. It may well be that, depending on what you sell, while you lose some of the 80 percent… your 20 percent will keep on buying… PROVIDED that you keep on delivering value.
While I don’t suggest any business owner let themselves become a ‘victim’ to the recession, I don’t think ignoring it is a wise move either. Depending on your business, it may be a time to rethink some of your strategies – either to avoid or to capitalize on current events.
Source: Erik Qualman, “Economic Depression 2.0″, October 2, 2008, Search Engine Watch
