Should You Be Slashing Your Media Budget Now?
In many industries and across media formats, advertising budgets have been slashed reflecting the falling demand for things such as cars and many other product categories. With economic and job uncertainty at record levels, what should Higher Ed be doing?
First, there is no one-size-fits-all marketing or media budget maxim that applies to the many different types of higher education institutions and prospective student segments. This blog post zeros in on graduate programs which primarily target working professionals for career enhancement programs such as MBAs and MS degrees, whether offered through business schools or similar masters-level programs.
Are prospects still searching for these grad programs?
There is no doubt that the volume of people searching for graduate business-oriented programs is lower than before the COVID-19 virus started shutting down our economy in the second week of March. Search volumes for MBA programs plummeted during the first week of the COVID crisis but has been steadily increasing since then, although it has not yet returned to pre-COVID levels.
Looking at the impact of COVID on website traffic for the month of March, the story is very similar with year over year website visits down about 20% as compared with last year. The good news is that in recent weeks we’ve seen this traffic recovering so for many clients their website traffic has improved with traffic declines in the range of 10% from the same time last year.
How much should I be spending?
We are likewise seeing 20% fewer impressions in paid search than in the pre-COVID era. During the first two weeks of the pandemic in March, there was a sharp drop off in the total number of conversions (i.e. those searchers who competed an inquiry form requesting additional information) coupled with an increase in the average cost per click. This would seem to make it an easy decision that now is a great time to pause your media campaigns and wait for the dust to settle. However just as it would have been a mistake to pull all your money out of the equity markets at the low point of the market in March, the paid digital search market has recovered as well. In fact, (sadly) the Higher Ed digital search market looks to be healthier than most 401(k) statements at this point in time.
While the total number of searches in the market is an important indicator to assess, more important is to understand what’s happening to conversion rates, the total number of conversions and the efficiency of your media spend. Since the first few weeks of the COVID era, we have seen improving conversion rates and steady gains being made in the total number of conversions. Despite generally higher cost per clicks, we are seeing cost per conversions coming in at near pre-COVID efficiency levels. We see two other very strong and compelling reasons to stay in the digital market right now.
First, while impressions for the paid search market are down, impressions for display ads are up significantly, reflecting the increased browsing activity of many people working from home and those who tragically may be out of work. While display ads tend to convert at a lower rate and higher cost than search, they are still producing new prospects at a reasonable cost per conversion.
Secondly, we have seen the overall costs for Facebook drop significantly reflecting many other advertisers, perhaps non-Higher Ed marketers, pulling out of the market. Even if Facebook is not a primary lead generation channel in your current strategy, modest Facebook media spends can achieve significant gains in visibility and reach under the current market conditions.
What to do?
Just like no one knows when the stock market will fully bounce back, you need to stay in the market so that you don’t miss the significant gains when they come. We are encouraged by the improvements in performance our clients are experiencing across the paid digital media market. Anecdotally we are hearing from our clients that the prospects that are converting now appear to be as engaged and interested as any others pre COVID. In almost all cases the reduction in the total number of searchers is not having an adverse impact on our clients because Higher Ed media budgets tend to be below the aggregate size of the market to begin with so the reductions we are seeing are not adversely affecting them.
A few other important tips to remember:
- Make sure your paid ad copy and website copy reflect the current status of your distance learning initiatives.
- We are seeing signs of stronger interest in fully online and certificate programs so make sure these product categories are getting the right level of market visibility.
- Periods of declining website traffic are great opportunities to publish timely and relevant content. We’ve seen some great examples of schools producing thoughtful and engaging content on topics such as the effects of COVID-19 on commercial real estate and also in other Industry verticals.
Feel free to reach out to learn more about what we’re seeing across the marketplace and how these best practices may apply to your particular situation.
This is update #3 in an ongoing series of articles about the COVID-19 impact on higher education.
See our previous updates:
How Much Will Distance Learning Recede When Campuses Reopen?
How Coronavirus Is Impacting Digital Search