On Online Advertising. In an eMarketer.com study conducted during 2008, $13.5 billion was spent on online advertising with a bulk of it spent on search engine marketing. Just how much? Well based on the research, 88% of money spent went to paid search and 11% went towards organic search (SEO). Should these things change in the future, especially during a recession? With budgets being tightened and everyone trying to save some money, I would imagine that while search marketing efforts are going to increase, the focus shouldn’t be on throwing out paid search ads, but on your content and truly understanding how your site is being noticed by search engines.

As part of an integrated campaign, search marketing should play a crucial role, especially now during the recession. With more people getting online and using search engines like Google, Yahoo, and MSN Live Search, having your site appear near the top of the page when certain keyword phrases are typed can generate tremendous traffic to your website and can often lead to conversions/purchases. So what steps can you take in order to make the most out of this?

One of the first things that you should probably do to help avoid firing blindly into the Internet world is to have someone come in and conduct a search engine audit on your website. Based on my past experiences in working with a consultant, they review your site and let you know what’s good and what’s bad about it – from a search engine perspective. Then they go about and take a look at what keywords will work for your site and the competitiveness of each of them. They will generate statistics, trends, reports, etc. that will help you moving forward. There are a few companies that would conduct this audit for you so look them up. The beauty is that these keywords can be used both for SEO and SEM placements.

But let’s look at search engine optimization for a second. This is probably the first place you should look when trying to promote your site versus jumping over to search engine marketing and essentially “spraying and praying” that your text ads will strike a chord with someone and have them click on your site. It is a debateable topic whether paid search garners more traffic/conversion than organic search, but it would make sense to make sure that your “house is in order” before promoting it. By this I mean make sure that your content is exactly the way you want it? Is it specific enough that if someone types in a certain keyword, that the page will have enough information for them or will it result in them clicking further which is a bad thing? Does your site adhere to search engine optimization best practices? The more care you put into your content and your website design/development overall, the better your search results will be.

However, search engine advertising/marketing should not be overlooked. In fact, the technology behind it has grown over the past few years and there are ways to make sure that you are getting your money’s worth. Perhaps the greatest asset to SEM is the geo-targeting approach. If you are only wishing to reach folks in the west coast of the United States, then you can have your text ads show up for those people with IP addresses located in one of the several states in that region. This will help avoid your text ads showing up for people who might convert but you weren’t targeting – thus avoiding wasting money. Something else to think about when you’re managing your campaign is the time and effort (and possibly cost) associated with managing this SEM campaign. Unfortunately you can’t simply choose a keyword, insert your ad and let it run for the duration. Why? Because the keywords are done through an auction-like process. The higher you are willing to bid on a moment’s notice, the greater your frequency of being seen (impressions). It’s always a state of constant monitoring, but you don’t want to break the bank to be seen all the time. That would cost thousands of dollars (depending on the keyword). One option is to check out a web marketing management solution that may wind up saving you some money overall – like Yield Software. These companies will help you monitor your campaigns and allow you to manage it on your own. So they give you the tools, you shape its path.

It should be important to note that when you’re looking at the keywords and the bidding price, if you have enough content on your site relating to that keyword, you should focus on doing organic search or SEO. The less competitive the word or phrase you’re targeting, the more you should go with SEM. I once heard an analogy “SEM is like renting your home while SEO is owning your home”. This definitely holds true. With a strong SEO strategy, your website/landing page can be the leading “authority” on certain keywords but if you’re only focusing on a temporary campaign or not sure about the effectiveness on a specific page, then you might want to also consider SEM. However, do NOT think that these are mutually exclusive. These should be woven together to help form a cohesive strategy in driving traffic to your site and when done correctly, can help bring you success during these times.

Like I have said previously, now IS a good time to do great things for the future.

I have read tons of advice around the web and I have come up with five things that have worked for me in past economic downturns.

1.)  Manage Your Cash Flow. People always say that cash is king. It is true and for a small business it is the difference between life and death. Crack open your accounting software and really look back at your previous year and how your cash went in and out. See if you noticed there were time periods were business picks up or is really slow. You need to prepare for things to be slower in the good periods and really slow in the normally slow periods. It is harder to get business lines of credit these days if you need to bridge for 60-90 days. But sometimes when you have employees and must make payroll, you gotta have the option. Having a good cash position makes you look good to a bank and having confidence you can pay it back will keep you going through this period.

2.) Launch new products or services. Now is the perfect time to test the market for new ideas. A recession gives you the opportunity to step back, rethink and review all sectors of your operation. While many are just thinking about staying quiet and surviving, you should consider launching a new product or service not currently offered in your market. Use the time to test out what is working and what doesn’t. This will help you diversify your products, services or industries so you don’t have too many eggs in one basket. Not only that but you will have launched something that has value during a tough time which means selling during good times will be super easy.

3.) Avoid death by frivolous discretionary spending. Think of all the little expenses $10-100 that you spent in 2008 on things. They are like little cash flow paper cuts that can bleed you dry. In good times many people most people don’t really look hard at expenses because they are profitable and can afford it in the name of “doing business”. It is time seriously evaluate all expenses and more effective use of free services and alternatives to accomplish the same things you did before.

4.) Take customer service to a new level. Great, you still have customers. Love them 10X more than you ever have before. They know that now is the time when they can look at alternatives and you seem too aloof or don’t seem to value their business, they are gone. Take nothing for granted. Make sure your pricing is competitive, your service is exceptional and your attitude reflects how much you value their business.

Also, open up that Rolodex and call dormant customers and see what you can do to bring them back. Sometimes it takes as little as just asking to restart a relationship. Resurrecting a past customer is less expensive than finding and breaking in a new one. One other thing – Ask your customers for referrals.

5.) What ever else you do, don’t stop marketing. Most companies that are cutting the budget sacrifice marketing first. WRONG MOVE. You should never stop marketing. In fact in quiet times like these when people are afraid to spend money you SHOULD BE LOUDER. And for those out there that think sales and marketing are the same thing – they aren’t. Low cost but effective things you can do to market and have conversations with people are to attend networking functions, spruce up your Web site and leverage social media effectively. You can also go the traditional route by sending out post cards or put out a new sign in front of your office if that applies to you.

What’s in your brain?

So do you have any things you are doing with your business to ride out this challenging economic period? Please share in the comments below.

True, I am a little crazy, but I always try and see the positive side of things. Let me explain…

Recessions are the best time to start a business

It seems counter-intuitive but starting a business during a recession is probably one of the best choices you can make. Someone with the determination and right frame of mind can be successful taking advantage of low overhead, no employees,
outsourcing and using the internet to your advantage for marketing.

But what if I fail? So, you fail. Would you rather be that person who tried to do something new and started a new business, didn’t get it right and lost a bit of money in the process. OR The person who did nothing and stayed broke?

2009 is gonna be a year of starting businesses that will grow and last well into the next decade. Want proof? Companies started in previous recessions: Google, Wikipedia, Microsoft, HP, Hyatt, IHOP, Burger King, FexEx, MTV and CNN to name a few you might recognize.

This period in our history is about new transforming disruption and not about new great depression

I was reading this post from Scott D. Anthony on Innoblog about what he calls “The Great Disruption” and I absolutely agree. We are going through a shift and transition where the economic challenges are a result of not executing and preparing for this coming shift.

According to Scott:

“Why the Great Disruption? In the Great Depression, demand, output and wages declined across the board. Today’s times are different. It isn’t just that demand is sagging. It’s that change is ripping through markets at unprecedented pace. Competitive advantage that took decades to build disappears seemingly overnight.

The Great Disruption didn’t start in 2008. Over the past decade, technological improvements have made starting and scaling businesses easier than ever. The rise of China, India, Brazil, and Russia mean market leaders have to deal with more sharp-elbowed competitors than ever before. And industries are frantically converging and colliding.

Certainly the pace of change has accelerated over the past few months, but leaders in media, retail, defense, health care, automotive, and high-tech can attest that they have been grappling with the Great Disruption for some time.

The Great Disruption creates real challenges for managers who have made a career out of focused execution.”

What will you be doing in 2009 to prepare for “The Great Disruption”?

People’s sense of entitlement is gone for the most part

When I used to live in “cubicle land” many co-workers had some really bad attitudes. Many acted as if management should appreciate the fact that they showed up and graced the office with their presence.

Many of those people have probably gotten a shock to their system over the last few years and if it hasn’t hit them yet, it soon will. And oh yeah, a paycheck is a thing you get for actually doing work and you should appreciate the fact you have a job and can have the kind of life you do.

Many might be experiencing this for the first time and I believe that since we are in the debt hangover and we must live within our means and pay off the bills we have accumulated. This means that many people you might be hiring for your business might have lost theirs over the last year and are probably happy to have a job. You know the saying “it’s a recession when your neighbor loses their job, it’s a depression when you lose your job”.

People are eager to work and there will be less of a greed and “it’s all about me” so you can find quality people at a reasonable cost.

New Year, Clean Slate. Clean Slate, Fresh Start.

When the clock struck 12:00am and you rang in the New Year, look at 2009 as a clean slate and a fresh start.

So have a great New Years Day and look forward to this year ahead of us. I guarantee when I am writing on Dec 31, 2009 that things will be much better than they were in 2008 and you will be looking forward to an awesome 2010.

I asked Guy Kawasaki to advise Small Business owners on the talk of recession in the economy that is dominating the news.