How to Build a Paid Media Strategy in a Down Economy
Based on Silvio Perez’s DEMAND session: “Building a Paid Media Strategy in a Down Economy.”
Was Sun Tzu, the famed Chinese military general and author of The Art of War, talking about paid media strategies when he said, “In the midst of chaos, there is also opportunity?”
No, but he could have been.
Despite the economic outlook, it’s not time to pump the brakes on paid media strategies.
In fact, now’s the time to look at 2023 and beyond as an opportunity to maximize your ad budget and increase performance while your contemporaries tighten their belts.
Case in point: Businesses that advertised aggressively during the 1980s recession had sales 256% higher than those who didn’t.
As we move into the new year, B2B marketers should batten down the hatches and carve out a paid media strategy that helps them thrive in a down economy.
In this article, we’ll explore three key ways you can do just that.
Why top advertisers think like investors and scientists
They say B2B marketers wear many hats—email guru, SEO wizard, content machine, and more. We’d say two other hats are necessary when the economy is in a tough spot: investor and scientist.
In a down economy, the advertisers who keep their companies’ growth engines running are the ones who think like investors and execute like scientists.
Think like an investor
Think of the all-time great investors—what do they have in common?
These investors:
- Take calculated risks
- Diversify
- Have stop-loss measures in place
- Never react emotionally
- See instability as an opportunity
The best B2B marketers embrace these traits and characteristics, especially during a down economy. For marketers, this can look like this:
- Instead of putting all the eggs in one basket, expand impact across channels to ensure that if one channel or tactic goes down, your entire strategy isn’t dead in the water.
- Rather than putting ads on a hamster wheel and letting them run forever, put stop-loss measures in place and use auto-pause rules to ensure you’re reducing inefficient spend.
- Instead of reacting emotionally to a high cost per lead (CPL), dig deep to understand how your strategy impacts revenue—and then freak out, if necessary.
Building a paid media strategy when times are tough requires shifting your mindset; try to see the instability not as a setback, but as an opportunity to get more exposure for less.
Execute like a scientist
This thinking has been largely lost on B2B marketers and paid media specialists. But those looking to weather the economic storm will embrace this data-driven approach and use it to make their paid media strategies sing.
Scientists formulate hypotheses and tell themselves, “If we do X, we think this will happen as measured by X, Y, Z.”
Here are tips from Silvio Perez’s DEMAND session “Building a Paid Media Strategy in a Down Economy”:
- Give your campaigns at least 90 days to measure success. This is especially true if you have longer sales cycles and can’t realistically turn opportunities into closed-won revenue at the snap of a finger.
- Instead of responding emotionally, look at your data and trends to understand performance; only then should you make the necessary adjustments.
- Execute your campaigns in a controlled manner. For example, set a firm flight date and a baseline for comparison to ensure you’re operating in an environment that gives you a clear POV into what’s working.
- Don’t be tied to your ideas and experiments—if something isn’t working, change it. Evolving doesn’t mean you failed; it just means you learned.
If you don’t understand your numbers and outcomes, you’re throwing spaghetti at the wall. You can’t afford this in a down economy. In 2023 and beyond, every dollar must work for you.
Brace for budget cuts
Nearly 30% of major advertisers say they’re cutting their budgets in 2023.
If the International Monetary Fund’s outlook for the economy in 2023 holds true—real GDP growth is slated to slow to 2.7% next year—budget cuts will almost certainly continue.
But, instead of accepting defeat and operating under the guise that “everyone’s in the same boat,” brace for impact. As French chemist Louise Pasteur said, “Luck favors the prepared.”
Here’s how to prepare for the impending budget cuts:
- Find the bloat
Do an audit of your spending and find the “bloat,” or inefficient spend.
Specifically, evaluate:
- Which campaigns aren’t impacting revenue?
- What technology isn’t providing actual value?
- Which team members, contractors, or agencies aren’t pulling their weight?
Look at these cogs in your marketing machine—campaigns, technology, and headcount—and ask yourself the tough question: Can you live without any of them?
If something isn’t driving a meaningful difference, the answer is probably a resounding yes.
While you’ll certainly come face-to-face with tough decisions, making them with conviction can be an effective way to get yourself back on track during a time when many B2B marketers are struggling to stay afloat.
- Adjust your strategy
One outcome that generally comes with all budget cuts is less coverage; you can’t tap into all the channels, tactics, or experiments that you’d like. This means you’ll likely need to adjust your strategy accordingly.
“Narrow your scope, and make sure that every dollar you spend is stretched in the most meaningful and impactful way,” Silvio says. “You want to focus on, ‘where can we be a big fish in a small pond?’”
- Plug your leaks
Say it loud for everyone in the back, Silvio: “The time for flying blind is over.”
In 2023, every dollar—no, every penny—will be on the line, so make sure you have the proper reporting, tracking and alerts in place.
Silvio said, “If it takes you six Salesforce reports and 30 minutes to answer basic questions—like, what’s my average cost per opportunity this month versus last month?—that’s a problem.”
Address these processes and operational inefficiencies now. Not only will this help you weather this economic downturn, but you’ll be prepared for the next one because you have a crystal-clear view of your efficiency metrics.
- Have a weekly war room
Business is a team sport, and you need all players in the game.
To keep your paid media strategy on track in 2023, schedule a weekly war room with relevant stakeholders to discuss new ideas, untapped channels, progress against KPIs, and challenges and blockers.
This meeting is essential and will play a massive role in your ability to respond quickly to budget cuts and come out ahead.
Say goodbye to TOFU, MOFU, and BOFU
Ask one hundred B2B marketers how they segment their content, and just about all of them will zero in on TOFU, MOFU, and BOFU.
For decades, creating content based on a lead’s spot in the funnel was the norm. There’s nothing wrong with this, and it still applies today, but during an economic downturn, it’s too narrow to keep you ahead.
Instead, look at your strategy in five stages:
- Create
At this stage, your goal is to build brand affinity and trust. This is demand creation in its purest form, and it’ll help you create desire and interest for your product or category.
The content at this stage should aim to deliver value without an ask. For example, you could post snippets of a webinar on LinkedIn or summarize a blog post on channels your ICP frequents, like Facebook or Reddit.
To measure this type of content, look at metrics like blended cost per opportunity, cost per consumption, and other leading indicators you’re creating raving fans.
- Capture
The capture stage attempts to convert in-market buyers, i.e., ones who know they have a problem and are looking for a solution.
The content angle here taps into audiences and channels with existing intent—think paid listings on Capterra, PPC ads, and remarketing.
To gauge the impact of this content, look at your pipe-to-spend ratio, direct cost per opportunity, and return on investment (ROI).
- Revive
Revival is all about reigniting closed-lost opportunities due to timing, budget, operational readiness, the competition, or some unknown factor.
This is super low-hanging fruit because these people already know you—to a certain extent— meaning it’ll likely cost you less in terms of funds and resources to get them one step closer to a sale.
Revival content will generally be more personalized since you’ve engaged with these clients before and understand their problems, challenges, and use cases. This could manifest as customer events, direct mail or LinkedIn Conversation ads.
Typical metrics to look at here are blended cpSQO and SQO created.
- Accelerate
How can you move deals faster? How can you help your Sales team close more deals? Asking yourself these questions can help you win business, offset budget cuts, and hit your goals in a down economy.
This content should center around social proof, and common objectives delivered in-feed on social or even during an event or dinner. Your goal is to help the prospect understand that your solution is the best.
For this content, one of the key metrics you should look at is the average time to close.
- Expand
Expansion is about driving more revenue from existing customers, i.e., increasing their lifetime value (CLTV or CLV).
Can you invite certain customers to events or dinners? Can you run 1:1 or 1:few campaigns on LinkedIn targeting specific companies? What about referrals?
When creating for expansion’s sake, look at referrals, renewals, and upsell revenue.
How I’d recommend you allocate your paid media budget
“If you have to drive pipeline today, you’ll want to start from the bottom and go up from there.”
Think about it:
Getting in front of 50 familiar prospects is significantly easier—and cheaper—than convincing a huge group of people who don’t even know they have a problem your product can solve.
That said, there are only so many deals in the pipeline, prospects to re-engage, and in-market prospects.
For those reasons, getting to the “create” stage as soon as possible is key. The sooner you can build your brand and dig a competitive moat filled with direct and referral traffic, the sooner you can ditch your over-reliance on paid ads.
During a down economy, that should be music to your ears.
A down economy doesn’t mean a drop in performance
In The Art of War, Sun Tzu said, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”
Again, he wasn’t talking about paid media strategies, but he could have been—just think of the economy and budget cuts as your enemies.
While the down economy and potential budget cuts will make for a challenging 2023, your paid media strategy doesn’t have to sputter.
If you know what to expect, prepare for the unknown, and shift your mindset, the next 365 days can serve as a launchpad to take your strategy to new heights.
