With rising interest rates, increased oil prices, and sky-high inflation, consumers are concerned about the future. Willingness to spend will vary by industry, but in general, marketers are seeing individuals tighten their purse strings.
In SEM, this is translating to year over year revenue softness for many brands. Companies in retail, travel, and financial services are having to adjust forecasts and performance expectations, which (don’t forget!) were made based on highly unusual performance figures in 2020 and 2021. Brands are left wondering how to assess their performance and what to do to maximize it given the current consumer situation.
As a demand-capture channel, search marketers have a unique ability to adapt and ensure that when consumers are raising their hands, they’re positioned to grab that interest in an efficient way. Below are three approaches your brand can take now to optimize within the current market situation.
1) Be intentional with your brand bidding strategies and goals.
Brand text is a key area where paid search campaigns are seeing softness. Consumers may be showing less loyalty in favor of finding the best price, or simply shopping less overall, especially in discretionary categories like apparel or travel. Whatever the reason, it’s important to keep a strong brand presence – but there may be opportunities to reduce spend without sacrificing visibility.
If you’re using just one type of bid strategy for brand terms, consider testing into different options to account for differences in competition and intent. A pure brand term containing just the name of your site shows high intent, is likely navigational, and probably has a fairly low CPC. These terms are often highly efficient and may be best suited for an impression-share-based bid strategy, knowing that consistent visibility is more valuable than hitting an exact, super-efficient ROAS target.
Brand terms that contain other information, like a category name, tend to perform very differently. Once a category or product type is added to the search, the SERP landscape often changes to include shopping ads or competing brands selling in the same category. Competition definitely changes for these keywords if your brand is both a retailer and a wholesaler. For these keywords, a return-focused bid strategy might make more sense and add efficiencies.
2) Understand the value propositions that matter now and communicate them effectively.
Too often, brands prioritize what they perceive as their most lucrative value proposition for ad copy. Instead, put the consumer at the center of your decisions. Think about (and research) what they may be most concerned with based on their current situation. Below are some considerations for different industries:
Inflation is driving prices higher – that’s true for nearly every retailer. Beyond promotions, communicate value-adds like free shipping that can help offset price increases. If you can’t compete on overall price, flexibility with returns, payment options, or local pickup can differentiate you from competitors.
Travel & Entertainment
April’s consumer confidence report indicated that “vacation intentions cooled.” Though they may be down from March, consumers are still excited to travel as the pandemic wanes. Flexible cancellation policies will assure travelers that they can change plans if their financial situation declines. Bundling options that offer savings can be a win-win, providing value for consumers and increasing order values for your brand.
For the past few years, mortgages and loan refinancing were in high demand, thanks to low interest rates. As interest rates rise, be aware of shifting consumer needs. Customers used to consistent stock market gains may be more interested in savings accounts to keep their balance steady while the market is more volatile. Additionally, college applications are rebounding, and with that, so should demand for student loans.
Grocery and CPG
Rising prices might lead customers to pursue cost-saving options, like buying in bulk or auto-reordering. If you have those options, make sure they’re showing up in the various search ad formats you use.
3) Expand your reach with pure broad match.
If you’ve hesitated to test back into pure broad match after Google deprecated broad match modifier (BMM), now may be the right time. When paired with an automated bidding strategy, we’ve found broad match to be an efficient way to enter new auctions and expand reach. With consumer needs and interests changing rapidly, the way they search and the parts of your business that resonate with them may also change. Pure broad and DSAs can help identify those opportunities without requiring extensive keyword builds.
Consumer needs will never stop ebbing and flowing based on what’s happening in their own lives and in the market more broadly, and marketers will always feel the impact, whether that’s positive or negative. Thankfully, SEM campaigns provide levers to adjust the cost side of the equation when the revenue side shifts, allowing you to keep marching toward efficient performance. By understanding which of those levers make sense when and keeping the customer at the center of your advertising, your brand can continue to perform despite challenging conditions.