Paid Advertising During Uncertain Times

The Key To Paid Advertising During These Uncertain Times: Stay The Course


If the current COVID-19 coronavirus situation has you feeling like it’s time to jump ship on paid advertising on Google and elsewhere, you’re not alone—but your best opportunity may actually be in staying strong, and not giving in to the fear.

As we deal with the ongoing fallout of the COVID-19 virus on our lives and our businesses, many industries are seeing (and may still see) a significant drop-off in web activity, particularly search volume. Industries like hospitality have been particularly hard hit, but everyone from schools to restaurants are also seeing business decline.

At Altos, we spend considerable time keeping up with the digital advertising industry—and while we may be in the middle of a situation the likes of which our industry has never seen before, the basics of the supply and demand market remain the same.

With that in mind, our forecast for the state of digital advertising over the coming weeks leads us to believe that staying the course with your advertising spend may actually be the key to long-term success moving forward.

What’s going to happen over the coming weeks?

Over the past two weeks, we’ve seen a significant drop in search volume and web activity across many industries—meaning there have been fewer available impressions available for advertisers (a significant drop in supply). But with many businesses still running their ad campaigns (continued demand) as they had been, cost-per-click for digital advertising has been driven up as competition increases—basically, more demand for less supply (available impressions and clicks).

Moving forward, we anticipate this trend will continue in the short-term. Prices will continue to increase for clicks, while impressions and total clicks will continue to decline as more people engage in social distancing.

What does this mean for advertisers?

As competition for shrinking impressions increases (and, as a result, cost-per-click increases), many companies will decide to pause or halt their advertising campaigns on Google or social media platforms like Facebook, Instagram, or Pinterest. That’s a pretty natural response…but we believe it will also open up fresh opportunities for those willing to stick it out.

As more businesses pull their ads from digital platforms over the coming days and weeks, competition for that reduced impression share will eventually bottom out. As a result, cost-per-click should drop down—not just from the elevated levels we’re seeing now and in the immediate future—we also believe they will drop below historical levels.

I think you can see where we’re going with this. With that in mind, let’s focus on what you can do to position your ads for maximum impact during this time.

So what should advertisers do?

In the short term, as CPCs increase, the wisest decision would be to monitor your max cost-per-click bids in all of the advertising campaigns you are running. Limit the max cost-per-click so that you don’t burn through your entire budget in a short period of time, or pay too much for a small volume of clicks that will upset your cost-per-acquisition. The objective should be to maintain impression share, but not to fret declining click volume or click-through-rate. Maintaining ad spend sustainability is key in this stage.

As more competitors begin pausing their campaigns and cost-per-click starts to decline, maintaining or even increasing your max cost-per-click bidding can take advantage of the decrease in competition and help capture an increase in market share. At this point, the goal should be to maximize impression share and click-through-rate.

Not only will you be positioned ahead of the curve when business starts returning to normal; you will have increased your market share and have had some time of significantly higher click-through-rate. On a platform like Google Ads where historical click-through-rate can impact Quality Score, this can be a bonus for your campaigns moving forward.

Need guidance? We’re here to help.

These are challenging times for any business, and getting through to the other side in good shape is going to take some critical thinking and a smart strategy. Fortunately, we’re well-positioned to help your digital advertising efforts get through COVID-19 on stable footing...potentially even better positioned for success than before.

Not every industry is the same. At Altos, we know that every client’s needs are different and provide specifically-tailored solutions to those needs. For many of our clients, the forecast outlined above highlights a strategy we believe will allow many companies to weather this storm and emerge successful on the other side.

If you have questions about your paid advertising campaigns or would like to discuss strategic options for surviving and thriving through social distancing, get in touch.