Why the ROI on digital is higher than ever in the current environment

digital cashflow, ROI

Over the past year or so the unprecedented conditions have accelerated a shift in online behaviour in record time. With people spending more time online, reduced competition with competitors and more online sales, the return on investment for digital is higher than ever.

eCommerce is on the rise

In April 2020, online sales in Australia grew by more than 26 per cent compared to March 2020 and by a huge 76 per cent when compared to the previous year. Brands like Australian online furniture retailer Temple & Webster nearly doubled their sales in the first five months of 2020. Globally, Amazon recorded $386 billion in revenue in 2020, a massive 38 per cent increase compared to 2019.

While the shift towards eCommerce can largely be tracked to people being prevented from visiting brick and mortar stores, at least initially, what we’re likely to see is a continued trend towards purchasing online, now that traditional shoppers have been exposed to the convenience and ease of online.

People are spending more time online

In the past year, people all over the world have spent more time online to purchase goods and services, connect with people, and entertain themselves. That trend will likely usher in a more permanent change to online behaviour.

Greater online penetration means more potential eyeballs on your website and more chances to engage via social. Brands need to meet their potential customers where they are – and that’s online.

There is less competition online

At the beginning of the pandemic, many brands made snap decisions out of fear, anticipating a decline and cutting their advertising spend. In retrospect, many of those brands are now realising that decision may have been hasty and are now playing catch up.

Successful advertising is born out of consistency. Pausing advertising, even temporarily, can have long term impacts to overall performance and efficiency. It can take several months to return to or exceed former results.

This is a prime opportunity for brands to compete more effectively online. Any investment in search, SEM or social is likely to perform well, while the costs will come down. Facebook and Google love consistency and will reward those brands which push on with advertising in this period. If you are running SEO, now is the time to build ground over the competitors who have stopped or reduced spend. If you are running paid ads – the competitive landscape has lessened and there is still plenty of search demand.

What’s next?

Maintaining or increasing the investment in digital will see brands through the downturn and prevent them from trying to claw back hard-won ground at a later stage. Now is a good time to review your marketing and advertising strategy to identify and take hold of any opportunities the current environment may bring.