As the global economy slides into recession mode, most of us expect marketing budgets to slide as well. Whilst on-line marketing communication spending enjoys an underlying growth due to spend mix shift (on-line vs. offline spend), it is likely that many companies will choose to bank the spend.
A not so original hunch of mine is that the CPA model (cost per action, in on-line advertising and affiliate marketing) will emerge as a winner. First victim of any recession is the marcom budget and most dreaded is any contingency.
Although many marketing execs and top agencies have yet to embrace the CPA model, the demand for it will come naturally during 2-3 years to come. The simple reason for this is that it is predictable and very low risk (assuming ROI neutrality between search and affiliates).
Another interesting experience I have with CPA is that there is so much “blue ocean” or open market space that you can grow the margin$ runrate without losing revenue run rate (recruitment, mix expansion, creative experimentation etc). Very handy indeed in bad times.
So if you want to minimize risks and drive growth in both margin$ and revenue$, take an extra look at the CPA networks around.
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Survival Strategies for Downturn « The Online CMO by Philip Hallenborg // November 18, 2008 at 3:36 pm |
[...] In practice, it is virtually impossible to get senior level buy in on brand spend in this environment. In my view, the best levers to pull at this very time are the affiliate and email levers (in fairness Ramsey mentions email in his forth reco: Stay close to customers). I have previously commented on some interesting aspects of the CPA model in times of recession. [...]