It’s no secret that the past 12 months plus have been plagued with upheaval and devastation. The COVID-19 pandemic continues to affect everything, from the way we live to the way we work. In the business world, small-to-medium sized businesses (SMBs) were arguably hit the hardest, reporting steep declines in capital and annual revenue figures.
Now, as we near the second half of 2021, it is critical that SMBs understand the two biggest challenges that lie ahead and start to work toward overcoming them. Those challenges are: how to pivot marketing efforts as the industry experiences seismic shifts in its migration away from third-party cookies and how to navigate increased advertising competition in core channels like Facebook and Google. Let’s unpack what we mean a bit further and explore how SMBs can innovate in the months ahead to look to come out on top in the post-pandemic era.
What the sunsetting of third-party cookies means for SMB marketing efforts.
When looking specifically at marketing efforts, it’s important to acknowledge the cookie conversation, specifically the effect that the sunsetting of third-party cookies will have on the overall business landscape. The marketing industry’s shift to first-party cookies is increasing competition within the walled gardens of major channels like Facebook and Google. What does this mean exactly, and what should SMB marketers be on the lookout for?
There will be a significant impact on Return on Marketing investments. SMB marketers will have to shift their mindsets from calculating the Return on Marketing Investment based on just the first conversion (or sale) to lifetime-driven value calculations. Simply put, they will need to increase their focus on retention marketing and getting first-time purchasers to purchase again. For example, the increased competition within Google’s walled gardens may lead to the average cost per click, or CPC, for a retail category like Home Decor to increase by as much as 80% year-over-year in May 2022, according to NetElixir projections.
Why SMBs were left out of the first-party cookie conversations, and how we can rectify it.
Unlike larger enterprises, SMBs have limited team resources. Most marketing team sizes range from one to three members. The pandemic has brought in an unprecedented level of uncertainty in terms of business environment and consumer behavior shifts. Most SMBs have struggled to survive and thrive during these challenging times, which means that they have had limited to zero bandwidth to try to involve themselves in first-party conversations. Only after Apple’s IDFA privacy update in late April of this year did some SMBs start directing their attention towards this topic.
Now, they can no longer afford to put off the conversations. To be able to compete and win in the cookieless world, SMBs must identify digital marketing partners that specialize in each channel and have the required expertise, technology and experience to help them win within the walled gardens.
How SMBs can drive innovation in the post-pandemic era and come out on top moving forward.
The shift to the first-party cookie world offers a unique opportunity for SMBs to build stronger customer relationships. SMBs are starting to engage in permission marketing whereby they earn the right to market from their engaged customers. The area of permission marketing can be a hotbed for innovation. Through it, SMBs can not only tell their brand stories more convincingly, but they can actually strive to build their community of followers and evangelists who believe in their brand purpose and can help them propagate their stories.
Every disruptive change brings with it an enormous opportunity to re-think the way forward. The pandemic led to mass disruption in the digital ecosystem. SMB leaders that are nimble, have the growth mindset and that have a stronger partner ecosystem to support them can catapult to a different orbit of growth. Now is the time to embrace this once in a lifetime opportunity with both hands and take action.
Udayan Bose is the Founder & CEO of NetElixir. Udayan Bose founded NetElixir with a vision to provide online marketers worldwide with a paid search campaign optimization solution capable of delivering magical performance. Udayan recognized the potential of search marketing as an essential advertising channel in 2004. Having experienced first-hand the complexity involved in running a profitable paid search campaign, he was driven to develop a system that delivers predictable and efficient campaign performance, allowing marketers to fully leverage the power of paid search as a high value sales generator.
SMBs retention marketing stock photo by Vitalii Vodolazskyi/Shutterstock