Are we really, as the government and Big Business would like us to think, in a recession? Or is the current economic spiral something more serious, ominous and possibly longer lasting than the average, run-of-the-mill, periodic recession or market readjustment?
Consider these items:
– Major financial institutions on the order of Washington Mutual, Wachovia, and Citibank have not almost simultaneously tanked since 1929-30.
– Likewise, core companies like Ford and GM have never skated this close to bankruptcy since the last Great Depression.
– Nearly ten percent of the American workforce is currently unemployed. During the deepest part of the Great Depression, which was three or four years after the 1929 market crash, the number barely reached 14 percent.
– On what might eventually go down in history as Black Monday, January 27, 2009, American employers announced plans to fire between 55,000 and 70,000 workers (depending on which news source one believed.) Either number qualifies as a modern-era one-day record.
– Chain-store bankruptcies and liquidations are at an all time high.
– GM is far from alone in posting staggering losses. Though significantly less than GM’s estimated $1 billion-a-month hemorrhaging, companies like Delta Airlines and Phillips Electronics, with losses of over $500 million a month in Q4 2008, are not exactly rolling in clover. Nor is their financial performance that atypical.
– E-business is not immune. Roughly 10,000 people who were getting checks from Google last Halloween are not getting them any more. And while Google disputes labor organization claims that these people were employees, the fact remains that they were getting paid to perform services and now they’re not. Meanwhile, Q4 earnings at eBay were off 31 percent. Even gaming giant EA is faltering, though their situation is apparently not so bleak that they had to include football folk hero John Madden, with his multi-gizillion-dollar contract, in the 10 percent of their workforce being pink slipped.
So regardless of whether you label it a recession, a depression, a market adjustment, a catastrophe, or simply deep doodoo, the economic environment at this particular moment in time means that all but a relative handful of very fortunate business people are having to search longer to find, and fight harder to land, new customers.
At the same time, most businesses are facing sales and profit declines that make it almost impossible to start expensive new marketing campaigns or even maintain existing ones.
To expand that point, let’s look at a very simple, round-numbered, pre-crash/post-crash scenario.
MyCompanyHopesToSurvive.com Paid Search Results December 15-January 15, 2008
1000 hits @ $1 each, total cost: $1000
200 sales from hits averaging $100 each, total revenue: $20000
Average profit margin, 25%
Gross Profit: $5000
ROI on $1000 paid-linking program: $4000
MyCompanyHopesToSurvive.com Paid Search Results December 15-January 15, 2009
1000 hits @ $1 each, total cost: $1000
100 sales from hits averaging $70 each, total revenue: $7000
Average profit margin, 17%
Gross Profit: $1190
ROI on $1000 paid-linking program: $100
OK, the current-year numbers aren’t very good, but they could be worse. At least MyCompanyHopesToSurvive.com isn’t in the red, which is more than many companies can say. On the other hand, MCHTS’s mythical operator probably isn’t dining out very often these days.
Though you may find it hard to believe after reading all this, we’re really not trying to depress you with an unremitting load of doom and gloom here. Prosperity may not be just around the corner, but it is out there somewhere and most of us will, somehow, live to see it.
What we are trying to point out is that we’re currently living in hard times and that historically, in all communities ancient and modern, the best and most effective way to get through bad periods is by leaning on each other and together fighting our way toward a better tomorrow.
Those of us doing business on the web are part of the e-commerce community, a community — like all business communities right now — which has many members who are hurting and a significant number who are seriously at risk.
To get through the next months, or perhaps years, of decreased consumer spending and belt tightening, we have to link hands and pull together. Except that in cyberspace there are no hands to hold, so we have to link sites instead.
Linking today is still, as it always has been, the most cost effective and widely practiced way of attracting qualified (i.e. interested in the product) potential customers to a website. What’s changed from the “old days” (like even six months ago) is that the value proposition offered by reciprocal link exchanging is now more compelling than ever.
Ethical reciprocal linking is still the only way to promote your website without any risk of losing either money, or search-engine ranking.
Hey, that’s so important let’s repeat it in boldface.
Ethical reciprocal linking, such as that enabled by LinksManager and detailed in our FAQs, user guides and linking school articles, is still the only way to promote your website without any risk of losing either money or search-engine ranking.
Paid search, banner ads, display ads, newspaper ads, public relations campaigns, even printing up business cards … all those things cost money. And if they fail to generate business, or don’t generate enough business to cover their cost, you’ve lost real dollars.
A link between your site and another site can fail completely, fall flat on its virtual face, never generate a single sale … and it still won’t have cost you a dime. And chances are it will still be active when business improves and will, at that time, finally start driving sales to your site.
That’s something else paid campaigns can’t deliver. Once they’re over and the money has been flushed, they can’t come back to help you. They have to be paid for and relaunched all over again, assuming you’re still in business.
Everything considered, now might be an excellent time to re-evaluate your linking program and think of ways to expand it by adding links or categories, changing some home page links to deep links, improving your anchor text or adding special features like LinkBlogs and Linklets.
And if you have any friends who are looking for ways to promote their sites without going nuts or into debt, please let them know they can experience the force of linking without cost or commitment by taking advantage of our 30-day free trial.