Welcome back to the Marketing Freaks podcast! In this week’s episode Jon is joined by our Head of Client Services, Dan to delve into the pressing challenges many businesses are faced with during the current economic climate. They shed light on how this has an effect in the digital marketing industry today and explore strategies to maximise efficiency in the face of a tightened Marketing budget.
In these uncertain times, businesses across the globe are grappling with economic hardships. Clients are understandably seeking ways to optimise their marketing efforts and ensure every penny spent delivers the utmost impact.
Subscribe links:
How to Maximise Marketing Efficiency in Challenging Times
A lot of businesses are questioning “Do we just turn everything off?” The simple answer to that is no! Here’s why:
One of the key things to factor in during these challenging times is that by keeping your paid media campaigns running, you are maintaining visibility. It’s also a good time to switch that fearful mindset into a “let’s seize this opportunity” mentality.
Economic crises often create shifts in consumer behaviour and market dynamics. By staying active in the paid media space, businesses have a chance to identify and capitalise on emerging opportunities. They can adapt their messaging, target new customer segments, or leverage different platforms to reach potential customers who may be more receptive during this period.
While some businesses may choose to reduce or halt their paid media activities, it presents an opportunity for others to gain a competitive edge. With fewer competitors in the advertising space, businesses that maintain their paid media presence can potentially capture a larger share of the market and expand their customer base. You can keep an eye on your competitors via the ads library.
Whilst it’s essential to be mindful of your Marketing budget during an economic crisis, completely turning off paid media can potentially hinder a business’s growth and limit its ability to seize opportunities.
So if you’re wondering what your business can do to become more efficient with spending whilst remaining profitable, take a listen to this week’s episode!
Enjoy!
TRANSCRIPT
Jon: Hello everybody, and welcome back to the Marketing Freaks Podcast. In this week’s episode, I’m joined by Dan and we’re going to be talking about the topic of “Making sure your ad spend is as efficient as it possibly can be”. Now, given the current economic climate, a lot of companies and businesses in the UK are looking at cutting back spend, and Marketing budget are tightening, right? So how do you do that? If you’ve been tasked with that… how do you do that in the most efficient and considered way possible, to still get the best long-term results from your campaigns? That’s what we’re going to be talking about and very much hope that this is useful for anyone who has that task on their desk at the moment. If you do find this one helpful, please do come and subscribe on Apple Podcasts, Spotify, all the usual places. If you really, really, really, really, really like it, please do leave a review on Apple Podcasts, because that really massively helps us too. So, any love you can give us is always appreciated and let’s get started with the episode.
All right, Dan. We’re going to be talking about what is often, I think, the opposite of what most people talk about. And historically with performance marketing and Facebook ads, Meta ads, PPC, things like that, everything’s always about scale.
Dan: It’s the sexy word isn’t it?
Jon: Grow, grow, grow. Yeah, it is. It’s the thing that everyone likes to talk about. We’re going to be talking about cutting spend back, or rather finding efficiencies in spend. Which I think at the moment, given the economic climate is a really important topic to discuss. Yeah. Because there’s a lot of businesses who are tightening up on budgets, paying a bit more additional attention or scrutiny to how their Marketing budget is being spent. And sometimes, scale is the thing the business needs. And that’s a very valid thing and everyone loves to get involved with that. Sometimes the business needs to find efficiencies or cut costs and it’s still a very, very valid task.
Dan: It is still important. And I think you should always be looking for efficiencies, even when you are scaling anyway.
Jon: Yeah.
Dan: So it is just kind of taking that step back if you do need to have those difficult conversations internally to kind of find the right efficiencies that aren’t knee jerk reactions that actually have a negative impact on the business overall.
Jon: Yeah, exactly. And a lot of people do, I think. I guess the context of this is if you are cutting back spend, things aren’t going as planned.
Dan: Yep. We’re all having a rough year right?
Jon: Which is never kind of what anyone wants, right? But, you have to be able to deal with it properly. I think a lot of people fall into a yeah, like knee jerk reaction, you know? If they’ve got to cut finance say “Sorry, you’ve got to cut your ad spend by 30%”, so just dial everything back by 30% or sometimes just pause the ad spend or you know… there are loads of scenarios, but you have to consider it really carefully because if you get it right, and let’s say we’ve got this 30% figure that we need to cut back, if you get the right 30% and you can identify areas that aren’t being particularly efficient, then you can potentially get the same amount of revenue from less spend. Which is a massive win because the business then has Marketing budget freed up for other areas, it can reinvest in what’s working or, you know, that’s a really good thing. But it’s about finding the right areas.
Dan: Yeah, exactly.
Jon: Um, but as an agency, it’s weird because every brief we get is typically about growth or scale.
Dan: Yeah. You never really, I mean I’ve been here for four years, I don’t think we’ve ever had anything where it’s like, can you help me find the most efficient way to run these campaigns? I’ve got this budget left for the rest of the year. We don’t really ever get that.
Jon: No.
Dan: Which is interesting.
Jon: It’s rare. Yeah. It’s rare. It is rare. To give one example, I guess from the, I think from quite early on running this business, we’ve got a brief in for a PC audit and, the owner was, or the owner of the business was questioning the cost of this audit. Let’s say it was like just an example, let’s say it’s $4,000 for an audit or something like that. The owner was questioning it, but last month, last month alone, this particular account had wasted $8,000 on a keyword that was completely, completely irrelevant <laugh>. And you’re like…
Dan: The value of just finding that straight away is
Jon: That’s a good return and well worth spending a bit of money on. Because next month you won’t waste the $8,000 and then that’s $8,000 that could be spent on the campaigns that are delivering a return or other activity.
Dan: And it’s like the other way thing you’ve mentioned on one of the podcasts, but…
Jon: No one wants to spend money on this stuff.
Dan: Yeah. And you’ve mentioned this on the podcast before, um, with an example. You had a client, like a booking company and you identified just a select amount of keywords that actually drove pipeline revenue.
Jon: Yeah.
Dan: So it’s like looking at that as efficient in that order as well would make such a difference. Like, look, only focus on these, you can cut back on these saving you X amount of money.
Jon: Yep.
Dan: But you’re gonna make the same amount of revenue.
Jon: Yep.
Dan: And like you said, we can invest that into another channel that’s going well, another part of the business.
Jon: Yep.
Dan: Or bank it if it just needs to be banked and put into a black hole somewhere.
Jon: Yeah, that’s a really good point. With B2B, that’s a very B2B or lead gen specific thing, isn’t it? Because if you are, let’s say you’re tasked with cutting back spend. If you don’t have pipeline data, you don’t know what keywords or search terms are driving pipeline value and rev like eventual revenue, then you’re just looking at form completion volume, which is often the opposite to what’s driving lead quality and value. So having the right data in front of you first thing, isn’t it? Because otherwise you’re gonna make decisions. You could cut off terms that don’t look great on the surface, but they’re actually the terms that generate the best stuff. So the right data is important. Before we started talking on air, you mentioned the difficulty around P-Max, which I think if we’re talking about data, this is an important point because automated campaigns, we’ll talk about P-Max as an example. Previously let’s say 5, 6, 7 years ago, it was actually quite easy to find areas of wasted spend.
Dan: Oh yeah.
Jon: Because you go into your search terms report, look at your terms that spent over a certain amount of money, got over a certain amount of clicks, generated no conversions.
Dan: It was quite black and white at times.
Jon: Exactly. Exactly. Kind of. But that, you know, there’s a good starting point. At least with P-Max you don’t get that level of insight.
Dan: No.
Jon: So finding areas of wasted spend when your view on the data is decreased is difficult. Yeah.
Dan:And it’s a lot. Yeah. Like you said, it’s difficult, it’s a lot harder, but it’s like looking in the right areas and I think that’s why it’s important sometimes if we have, it’d be great for us to get a briefed on looking for efficiency on P-Max. Because we were talking earlier about looking at your product data. There’s so many products that have impressions, X amount of spend. No conversions. Do that task straight away. You’ll find there’s probably about 20% of the products actually are converting for you.
Jon: Yeah.
Dan: X amount or not. You might still wanna spend some money on them for awareness, but you could start re-looking at how you are being most efficient with that spend. And it’s just, it’s just being smarter and looking at different things in a different way probably with automation. And I think the difficult thing with AI on automated campaigns is how long do you give something and how long do you, when do you stop trusting the machine versus your own intuition? On efficiency. And I think that’s the big pivot with those campaigns.
Jon: Yeah. Definitely. By that you mean so trusting the machine as in there’s a learning period behind the campaigns?
Dan: Exactly.
Jon: You’re feeding it the right data and you trust the fact that Yeah, eventually it’s gonna come good cuz they, it is um, step by step by step isn’t it?
Dan: Yeah.
Jon: In terms of ROAS or performance…
Dan: There was a thread on Twitter the other day, um, which essentially was saying,
Jon: Or a thread on threads
Dan: Or a thread on threads now. Yeah. It was basically, I think I spent about $8,000. Um, it was an advantage shopping plus campaign on Facebook. So their version of P-Max. And nearly 50% of the budget had gone onto one creative, it was converting well, but the ROAS was a lot lower, well a bit lower than other ads that hadn’t got as much spend.
Jon: Okay.
Dan: And you’re looking at that and you’re going, is that making the best use of my Marketing budget? 50% is going into this one creative, my return’s not as good as some of these could be. But when do you go, well, meta knows that this ad long term is gonna be the best option for me versus I might just wanna put the brakes on that a little bit and to see if I can get a better return. And be more efficient elsewhere.
Jon: Yeah.
Dan: And it’s really difficult because you’re kind of being told by all these reps and everything to like trust the system. This will, machines are more, machines know more than us, but sometimes you just look at it and it looks so obvious that you need to make a decision.
Jon: Yeah.
Dan: That’s also where your spend can just run away from you in these periods. And if your Marketing budget’s being cut back.
Jon: Yeah.
Dan: It’s really important to have somebody that understands those campaigns, understands when to put the brakes on essentially.
Jon: Yeah. But this is where experience kicks in.
Dan: Exactly.
Jon: And knowing and that balance between your gut feel, your experience and how to play the game in terms of playing to meta’s benefits. Right. Yeah, exactly. And learning process because you’ve got a decision, haven’t you? You go, Right. Well if it’s taking 50% of the budget is driving conversions, but these other ads, they haven’t had as much share yet… but they’re still driving some, do you switch off this thing “the banker”, like the steady Eddy, it’s going all right. At least it’s doing something. Meta really likes it. Clearly. Or do you bend that and go with these ones that on the surface with less data look better, but would they
Dan: Long-term scale?
Jon: Yeah.
Dan: Yeah.
Jon: Which is tricky isn’t it? It’s, it’s actually quite a tough decision to make. I think if you’re running campaigns, you’ve got loads of creative that’s spending loads of money and not converting, that’s easier isn’t it?
Dan: It’s easier. Yeah.
Jon: Yeah. Because like
Dan: Right. Well it’s when you’re like, what will happen if I turn this off? And it’s kind of like it’s when do you trust the system versus trust your, your gut essentially? So, it that that’s like you said, expertise is key there and like I think agencies are really well positioned from that point of view because they’re across a breadth of accounts.
Jon: See so much information.
Dan: Yeah. They’ve seen so much information and you know, they might be doing the same sort of exercise of being more, trying to be more efficient. Um, or even if even when you’re scaling, like you’re trying to find the best the winners and it’s the same approach if you’re being efficient.
Jon: Yeah.
Dan: So yeah. That’s why I think like we said at the start, it’s more people if they came to us like can you help me just streamline this down?
Jon: Yeah.
Dan: What would you recommend?
Jon: Yeah.
Dan: We could take an audit and do it and we’ve got such a wider range of what we can benchmark against.
Jon: Yep.
Dan: So I think that’s really important. And then I think the last point on the AI P-Max side of things is if you are doing it in house, they’re so easy to set up now if you’ve got limited knowledge, you go boom, boom, boom. Yep. That’s done. Let it run, and you keep pumping more and more money cause the robot looks really good. Yeah. We’ve seen it. A lot of it can just be branded and certain things and you may get to a certain point where you can’t, you’re trying to scale it and because it’s not really efficiently run or efficiently optimized in other areas, you can’t push it. But then you are like, oh, social’s not working, let’s turn that off and put more money into this shiny campaign that’s working. Suddenly you’ve tried to be efficient but you’re actually, your overall growth is actually declining because of it.
Jon: Yep.
Dan: Because you just don’t understand. You don’t understand what you are looking at to be and actually it’s wasted spend cuz it’s brand. They probably would’ve converted at some point anyway.
Jon: Yeah.
Dan: Is it the most efficient use of the spend, again, even if it looks on paper the best performer?
Jon: Yeah. Probably not.
Dan: For your finance team for example. Just understanding those nuances. In that whole process of where can we cut back 30%? To your example earlier.
Jon: I do think there is a level of, what’s the word, try and pick the word carefully. Irresponsibility in how campaigns types like P-Max have been marketed. Because it, it’s been pushed in the “really easy to run campaign”
Dan: “Everything in one”
Jon: Yeah. “It’s all in one place”, “Don’t worry about it”, “just tell us what you want”, “Give us some money, we’ll go and get it for you”. And it’s very clever because chances are it’s gonna deliver on the surface some good looking results. Because it kind of cannibalizes brand terms.
Dan: Yeah.
Jon: And you have to be, you know, getting an actual scalable P-Max campaign is very different to just getting something running and having some surface level numbers. So it’s, there are probably quite a lot of businesses that are spending money on P-Max campaigns that on the surface look really good but aren’t.
Dan: Exactly like it’s not. Is the new customer acquisition growing?
Jon: Yeah. Yeah,
Dan: Debatable. Yeah
Jon: Exactly. So
Dan: Yeah and it’s just understanding it and having the experience to know what leavers to pull on it to… again if you’re cutting back spend like okay, how do we make this more efficient? Right. We’re running brand, do we exclude the brand terms which you can do easily now from this because, actually that’s covered from other activity and it’s just, it’s just coming up with that step back strategy on everything. Like what do we need to do to cut back this 30% but still be successful? And focus on the right things.
Jon: Definitely.
Dan: And that shiny number, it might say a ROAS of 30 <laugh>.
Jon: Yeah.
Dan: But it’s hard enough to explain to some people about the nuances on that. If you tell finance you’re turning off a campaign with a ROAS of 30, they’re like…
Jon: Why are you doing that? Yeah.
Dan: Why are you doing that? Because it’s just they don’t understand. Yeah. It’s important that you have people that can understand
Jon: Understand the intricate details of it.
Dan: Yeah, inticate detail and articulate it easily for everyone understand. When you’re making that cut as well.
Jon: Yep. Definitely Other common areas of wasted spend. I think one of the big things that often turns up when we are getting a new account or if we’re running an audit are people spreading themselves too thin.
Dan: Yeah.
Jon: By that I mean either there’s tons of campaigns spending two pounds a day, therefore none of them are getting out of a learning process. There’s not enough data going through anything and therefore none of them get a chance to do anything, right. That’s mistake number one. Mistake number two is, so you’ve got 20 campaigns running, you see this quite a lot actually 20 campaigns running, but only one or two of them have actually got a good return. And those two have got plenty of search impression share left or audience availability left. Therefore stop spending on those spend on money max out those then start broadening out. And I think that’s a really, really big thing. Yeah. Really, really big thing.
Dan: Yeah. It’s kind of just, we see it all the time. Cause I think you want to cover, especially if you’ve got sales teams or different markets or there’s other business goals where you’re like we need to do this, this and this. It’s really easy to make a Google ads structure get really broadened out really quickly if there’s a lot of stakeholders involved.
Jon: Yeah.
Dan: So like you said, it’s like the goal of this is performance marketing, like the performance, unless you’ve got some awareness goal, but most of the time it comes down to a MQL number. So cost per MQL or a ROAS or cost per acquisition. And like I said, if those two campaigns are not being efficiently run, so we know if we can’t answer the question, “what’s the most we can spend on this campaign at an efficient return?” and if we’re not maxing that out, why? That’s where the Marketing budget should be going. Not, Oh let’s try this over here but we’re only we’ll do it half assed and do it. We have 10 pounds a day, because somebody wants to focus on this area for example. I think it’s like you said, doubling down on
Jon: Spend the most you can spend on what’s working until you hit that ceiling.
Dan: Until you see that curve going down before
Jon: You start running loads of other stuff. Exactly. Um, it’s simple really isn’t it? It’s just budget, discipline.
Dan: It’s the same with channels as well. Like oh we need to go over there and go onto TikTok cuz everyone’s doing it. We need to go onto, oh this is going on lets go on social. It’s like if you’ve got one or two channels that are working really well, are you maximizing the full potential of what you’re already running there? If you are, cool. Look at other channels. If you’re not, and you’re cutting back from an efficiency point of view, where’s the winners in those platforms? And just double down on those.
Jon: Yeah. I think all of this has to come with the caveat that experimentation is good. There’s such a fine line, isn’t there?
Dan: Yeah. Yeah. Because I’m a big believer you’ve just always, even if you’re cutting back on spend, have a percentage of your Marketing budget allocated to testing experimentation because otherwise you’re gonna never, you’re gonna stand still and when you get to the period where you do want to push it again, you’re kind of like, well where do we start?
Jon: But then that’s intentionally spent on activity that might not generate a positive return.
Dan: Exactly.
Jon: Yeah. Definitely. And then if you’re running P-Max or, yeah, P-Max shopping or like any dynamic ads on meta with a catalog, making sure that, you know, if you’ve got 10,000 products in your catalog, focus on the ones that sell. Because so much of that spend will be going to products that don’t really sell might have a really low value, therefore they’re never gonna generate a positive return. So being selective over the products you promote, if you’ve got a decent volume of them, is relatively easy to segment them out on both platforms. That’s an obvious one as well, isn’t it?
Dan: They’re called, Zombie products.
Jon: Zombie Products.
Dan: The phrases they use these days, which is just like, they’re just sleepwalking, they’re just, they’re around, they’re not doing anything.
Jon: The Dawn of the Dead,
Dan: Exactly. You know, what’s their purpose? Um, so yeah, like you don’t have to, like you said, just because you’ve got 10,000 products, you don’t have to run them all.
Jon: It’s the same as like, um, like if you’re advertising the US you don’t have to advertise to every state.
Dan: No. If you know on your GA4 data, there’s four states that convert probably 80% of your revenue, why are you going after like some of the ones that have like 1% of your overall revenue? At a time when you’re trying to be more efficient and cut back. Like, go where the people are the people that like your product. The people that convert and get the most out of what you know. And that, that’s the other thing with this right.
Jon: Focus
Dan: When you’re cutting back or you’re trying to be more efficient, it’s focus and going after what you really know and understand. And are you getting everything you can out of those areas.
Jon: Yeah. Yeah, definitely. But I think that sums it up nicely is the focus on what’s working. But the difficulty is that balance between if you just go and take a hacksaw to an account, you’re probably gonna do yourself more harm than good because you’ll cut the learning process if you don’t want to kind of sacrifice your budget for the learning process. And it’s really intricate, isn’t it? It’s really difficult.
Dan: Like, just talking about it can be quite simple. How we say like, “do this and do this” but actually when you get into the nitty gritty, there are trade offs in certain areas when you’re making those bigger decisions anyway.
Jon: I think the main point is, it’s like just be very well considered. If you have to cut budget, be considered about it. Be thoughtful about it and try and cut areas that are inefficient. Be careful
Dan: We always have conversations where we really analytically step back and go, what are the ones that we need to scale?
Jon: Yeah you do this when you scale, don’t you?
Dan: You do this when you scale but you never do it the other way. But actually it’s, the process is very similar. It’s the same thing. It’s the same thing. You’re just going the other way. So it’s like, it’s just that probably being even more refined. Like instead of like carrying a campaign that has got a decent return, it’s like, well let’s just focus on the next layer up instead. It’s just doing the exact same process and analytical thinking that you would if you were scaling, but it’s just, it’s not as sexy and no one wants to really.
Jon: It’s not as fun is it?
Dan: No one wants to be moving backwards. They wanna be moving forwards, but sometimes,
Jon: Which is understandable.
Dan: Needs must. Yep. The way we are at the moment.
Jon: It’s still a valuable thing for the business.
Dan: Exactly. And if you can prove that value, the conversations you can then have when you can ramp up again.
Jon: Yep. And you will be, be in a better position to do it won’t you. Obviously if anyone’s listening to this wants a hand, let us know. I think the best way to deal with this, if you go, if you’re going to outsource it or work with an agency partner, is an audit. It’s a second pair of eyes and it’s a look… Here’s how we’d recommend you approach it. And that can be implemented in-house or with a current agency or anything like that. So if anyone does have any questions about it and would like to talk to us, then please do feel free. Well thanks Dan.
Dan: Cheers, Jon
Jon: And thanks everyone for listening for… Why Can I never ever say that?
Dan: You’ve done it so many time
Jon: Thank you everybody for listening. See you on the next episode. Cheers.
Thank you so much for listening. If you enjoyed that episode, please do come and subscribe. Join us for future episodes where we talk about the ins and outs of running paid media and driving improved conversions and revenue for your business. See you next time.
To learn how Overdrive Digital can help you make the most of your Marketing Budget, get in touch today.
