How have Organic and Paid Channels Changed? What About Consumer Behavior?

Introduction

Right from the dawn of the digital era, marketers have focused on organic and paid channels to market their products and services. Organic channels are those which strive to acquire customers naturally. For instance, a user searches for a specific keyword, your website appears among the results, and he/she clicks on it, and maybe you get a legit conversion. On the other hand, the purpose of paid channels is to bring customers artificially through paid ads. For example, you pay for your ad to appear at the top of your search screen; a user sees that ad first, and if he/she finds it interesting, clicks on it and lands on your page. However, the number of conversions you might get through paid channels is difficult to gauge.

Research and surveys have shown that customers acquired through organic channels tend to stay longer than those acquired through paid channels. The reason is simple – those coming to you organically know what and who they are looking for. However, those coming through paid ads happened to just stumble on your ad and click on your link. But most of them may either be people who didn’t know about your company before then or those who might not be specifically looking for your products. But one thing is for sure: paid campaigns surely increase your click-through rate (CTR), and that then, in a way, may boost your organic rankings.

The entire pandemic situation has had a worldwide impact on how marketers are using organic and paid channels. Interestingly, most of it is determined by online customer behavioural patterns. In a webinar, Vandana Chaudhry, Head of Enterprise, Deliveroo, Australia; Saket Toshniwal, Head of CRM, Lovoo; and Preeti Mundra, Head of Marketing & Partnerships, Liv. Digital Lifestyle Bank spoke to Yash Reddy, Chief Business Officer (APAC & EMEA), Moengage, about the differences in consumer behaviour before and during COVID-19 and the changes brought about in organic and paid marketing strategies.

COVID-19 and Changes in Consumer Behavior

There is no denying that online consumer behaviour has changed significantly after the onslaught of the pandemic. This is not just limited to a particular region, country, or geography; this is a global trend that can be seen everywhere. There are multiple reasons for it, one of the major ones being countrywide lockdowns, due to which most people are constrained within their homes. Another reason is that many businesses worldwide have suffered huge losses as their offices and operations are shut. Owing to this, many people have either lost their jobs or have suffered huge salary cuts.

All this has made people rethink their priorities and spend money on things they need rather than those they want or desire. As a result, people can now be seen spending more on basics rather than luxury or recreational items. This, however, doesn’t mean that they are not treating themselves to small comforts every now and then, but the frequency has definitely reduced.

Vandana Chaudhry from Deliveroo, Australia’s food delivery service, said that they could see more lunch orders on their app. People are working from home and obviously have no time to cook fresh lunches for their families. She also adds that this is due to the current “Work from Home” trend, and these numbers will go down once the offices open. But on the other hand, there is also a significant spike in order for healthy meals (organic and vegan options) and comfort foods (ice creams, cakes, etc.). This may be because now people have time to sit back and introspect about their health and also to enjoy some cheat days in between. It will be quite interesting to analyse which of these behavioural trends are short-term and which ones are long-term.

Lovoo, an online dating app, has seen a good growth in customers acquired through organic channels vis-à-vis paid ones during the pandemic. Saket Toshniwal, who works with Lovoo, shared some interesting insights. He said that since their app has a strong community of loyal users, it pulls new users organically. And this number is much higher than the leads they have been getting through paid searches.

The bottom line is that customer behaviour is the major driving factor in devising organic and paid marketing strategies. Digital marketers across the world, therefore, study online consumer behaviour very closely before finalising the company’s marketing plan.

The “Banker’s-eye View” on Changing Consumer Behaviour

When it comes to examining and analysing online patterns of consumer behaviour, bankers can undoubtedly provide valuable insights. This is because most digital transactions happen through banking platforms or secured gateways. Therefore, the kind of exposure they have to people’s transactional data is unparalleled.

Preeti Mundra from Liv. Digital Lifestyle Bank gave an interesting “banker’s-eye view” of this whole changing scenario. She emphasised how people are now focused more on saving money for a rainy day rather than spending it on items they can do without. So while more money is being spent on things like groceries, clothes, and even entertainment platforms, such as Netflix, the amount spent on travel and leisure and even real estate has been dipping.

The changed lifestyle has severely impacted people’s way of looking at things. They are now filtering between needs and wants and are spending more wisely. What marketers need to do, therefore, is to understand the psychologies of their consumers and sell accordingly. The thing to remember here is organic channels are always more effective in the long run. However, paid channels shouldn’t be underestimated because they give quicker results and impact the long-term organic strategy.