Yesterday was sort of a write-off. Like many others, I spent a valuable day watching history unfold in stunned disbelief as over $1.2trillion dollars was written-off in losses. The day was full of fear and like an infectious virus, that fear went pandemic. The troubles are real and though the sky is not actually going to fall, something wicked is most certainly coming this way. So now what? While many are searching for a plan, the search marketing community has been planning for this phase of search.

Stuff Happens
Here is the obvious part. There is going to be enormous pain felt around the world no matter what happens in the United States later this week. Everybody is going to feel it in one way or another but that pain will not be shared equally by all. Some businesses will cease to exist and some businesses will fare better than their peers. Some might even see benefits on a horizon that appears bleak to other observers.

Stuffs Been Happening
Within the Internet marketing community, discussions around the economic downturn have been taking place for over a year now. People have been thinking about it and sharing their thoughts in print, video and by voice. Each of the major online marketing media outlets have carried numerous stories outlining factors and issues, advising preemptive action and offering strategies for businesses involved in search and web marketing.

As a business service “sector”, web marketers (particularly search marketers) are better positioned than most others to weather through the worsening turbulence. Web marketers adapted to a global business environment nearly a decade before most other small to medium sized businesses did and the very smart ones have spent the past year expanding their client bases in Europe, Asia and South America. Because access to the Internet is relatively inexpensive, search and Internet marketers staked out the most cost-effective advertising environment long ago and are now often undisputed experts in their fields. Even if the sky is crashing for others, the sector is positioned in what should remain a relatively sunny place.

Hope on the Horizons
The crisis facing the integrated global financial world is one of credit. Money is not as easily available. It is as simple as that. Fluctuations of the stock markets are poor barometers of the actual problem though they do show the emotional reactions of investors. Though this post opened with the scary figure of a $1.2trillion dollar loss, the markets have recovered nearly half that in positive trading today. We’re in a time of great fluidity, which is almost ironic considering the problem involves liquidity.

Three Faced Crisis for Techies
For workers in the tech sector, the financial crisis has three immediate faces. The first is very personal. Some of us work as contractors. The only retirement plans we have are those we accumulate ourselves through 401Ks and RRSPs. Many who are not contractors have equity stakes in the firms we work for or have worked for in the form of shares or options to buy shares. As the markets retract, our retirement savings diminish. Fortunately, most of us are decades away from the traditional age of retirement. Though we might have to put in a few more years in the future than we anticipated a few years back, retirement savings invested in diverse markets will almost certainly be healthy by then. (note: there are certainly notable exceptions to this hopeful generalization)

The second face is far less personal but far more frightening. The very stability of some businesses, especially those in the United States and UK, is immediately threatened. Business relies on credit. Many businesses survive on their lines of credit. Steady numbers on the accounts receivable side of the ledger used to be enough to collateralize a life-saving line of credit. Today, even businesses with the most stellar credit histories are having hard times finding financing to bridge gaps between potential revenues and actual income. Those who can still access credit are paying more for it. This is the reason the US Congress is debating a bailout package for Wall St.. The credit market needed to be opened up for today. That’s why yesterday was so traumatic. Many businesses will experience major problems because of a lack of credit. Imagine what the conditions will be like in mid-October and moving into the holiday season if a bailout is again rejected on Thursday when Congress next meets. This affects everything from pay cheques to service debts.

The third face of the crisis involves financing development or finding fresh capital. It is going to be far harder for start-ups and those seeking capitalization. We’ve been here before and the tech world survived the drought. This drought however is bigger than tech. When the dot-com bubble burst in 2000, the money literally dried up. Shortly thereafter, Overture came along with it’s weird bid-per-click system and Google innovated that into the extremely successful pay-per-click advertising market we know today. Something will happen to stimulate the economy and the tech world is obviously positioned well to (a) create that something and (b) reap early benefits.

DO SOMETHING!
The credit problem was obvious for a long time but apparently only for a few. Warren Buffett warned of it three years ago. Currency speculator George Soros saw it coming in the lead-up to the invasion of Iraq almost seven years ago and started dumping greenbacks. Some smart search marketers saw it coming a few years ago. I recall when one extremely astute President of a very well known SEO firm discovered Enquisite over a year ago, her first action was to study search terms relating to mortgage failure, personal and business bankruptcy and debt relief. She saw the financial crisis coming and was obviously making plans at that time to guide her clients and firm through it. Today, that company is on its strongest footing ever.

Here are a few other things search marketing businesses are doing or at least thinking about to prepare for and weather the coming months.

High Interest Avoidance
Many firms I know of have limited or even cut the use of company credit cards in order to avoid any double digit interest payments. These companies are focusing on reducing high interest debt as quickly as possible. Travel is being curtailed and key employees who absolutely need to continue traveling are being asked to reduce their expenses as significantly as possible. Knock down high interest debt immediately to remove an ugly millstone from your neck.

Relationships Rule
Shore up your relationships with existing clients. Your current client base is the most important asset your business owns. These people are golden gods and should be treated as such. The trick is knowing how best to honour your current clients beyond doing the best work possible for them. This is where good customer relationship/retention management software is essential. There are many brands such as Salesforce and Maximizer out there. Use them. They keep you in touch with your clients by providing you a method to record every interaction and cross-reference data in numerous ways. Customer relationship/retention management software is also good to help you tighten up your own operation. CRM software helps your project managers keep track of accounts and properly utilize resources, a critically important role when resources are stretched.

World Wide Networking
Every smart search marketing firm is looking offshore for new accounts. The market in the Unites States is currently too shaky and uncertain to be certain about. This is not to say that America is going out of business. It is not. It is a warning that a number of things are going to continue happening which make American businesses more difficult to deal with and account for as clients.

Currencies of Choice
The US dollar is no longer the default currency of the web. Where search marketing firms once quoted primarily in American dollars, most companies now phrase fees in whichever local or global currency suits their clients’ locations and tastes. It is a smart move both politically and financially. With the rapid fluctuations in the value of the US dollar, service firms need to base their quotes on a currency that provides solid value. Movement away from the greenback is going to be an escalating issue in reaction to the current crisis.

The Devalued Dollar
The American dollar is going to be devalued against other currencies. No matter what happens later this week, the devaluation of the greenback is a certainty. The bailout, if enacted, will be financed through the sale of Treasury bonds. That means the US Treasury will basically print more money thus lowering the value of bills already in circulation. Even if the bailout package is not enacted, America’s debts, both personal and public, are absurdly high. As the past few weeks have demonstrated, the country and its consumers are ill equipped to settle those debts to the satisfaction of their creditors. Now creditors are not lending any more money and the economy is grinding away without lubrication. While it will not likely take a car-trunk full of bills to buy a loaf of bread, costs are going to appear to rise as the relative value of each actual dollar decreases.

Worldwide Ripples
When seeking international clients, consider the way the crisis will affect your prospective client’s national economy and how that will affect them. The financial crisis is already spreading around the world. The global financial system is complexly integrated and a problem in one place (especially such a major problem) has repercussions everywhere else. That’s why AIG had to be rescued while others have been allowed to fail. As the credit crunch spreads around the world, some countries will fare better than others. Japan, for example, is in a precarious position because of its reliance on shipping, exports and global investments. As the American dollar falls, the Yen becomes stronger and Japanese goods suddenly cost more on American store shelves. Canada has a similar but less pronounced problem in that the main market for our commodities and service industries is shrinking while the cost of those services and commodities continues to rise relative to the value of their currency. Go Euro?

Transition a Sign of the Times
You might have noticed a great deal of movement in the search marketing community lately. Some firms are clearly bulking up while others are conglomerating. Businesses are taking measures to shore up their bottom lines and find synergies with other companies to serve a larger stable of clients with a wider variety of services.

Smart Assembly Required
Smart building is important right now for firms looking to grow their client lists. Keep your core competencies strong but be ready (and fully prepared) for clients to ask you to venture into other areas relating to search marketing. For instance, Metamend has spent the past year developing a best-of-breed reputation management division. Similarly, we are using our design and marketing knowledge to help clients turn increased site traffic into increased actual revenue with our newly minted conversion optimization services.

In Conclusion, the World has Changed
The economic downturn is no longer said to be coming. It is here, it is brutal and it is real. There is no clever way for most individuals, businesses or nations to escape it though some might be clever enough to mitigate its effects and find a path to prosperity in difficult times. Most of us will survive and be relatively undamaged a few years from now when stability and sanity reassert themselves. When it does, America will no longer be the sole super-power. A three-way or perhaps even four-way balance of power will emerge with Europe, North America, China and the South American regional influence of Brazil and Venezuela being the major players. The insanely fun, wild ride we have enjoyed in North America since the mid 1980’s is done. If we’re lucky, we’ll get back to the pragmatic pace of the 1950’s and 60’s while avoiding the stupidity of the 70’s.

For us at Metamend, being based primarily in Canada is highly beneficial at this time. Because Canada’s banking system is traditionally far more conservative than America’s, we expect to feel ancillary effects rather than direct effects. Though we are deeply concerned about the future and how our local, national and North American economies are going to come out of the crisis, our business is not threatened and our staff members are not overwrought with worries about dealing with escalating personal debt. Personally, more than a few of us are concerned about our own long-term retirement plans but we have the benefit of the amazingly resilient Canadian equities markets in which many RRSPs (registered retirement savings plans) are invested. Things feel fairly stable from where we are sitting.

This sense of stability comes partially because we are based in Canada and partially because we have spent the past year working on the assumption a North American economic downturn was inevitable. We prepared by planning a slow but steady expansion, seeking new markets, and introducing services we believe web-based consumers will want and need. Several of our friends and competitors have as well. Though we’re all going to feel the effects of whatever we want to call the downturn, the search marketing community will come through it and thrive as an industry.

What the industry looks like when we all come out the other end of this downturn is going to be as different as our sense of global society likely will be. By the time this downturn turns upwards again, the small search marketing firm will be long gone. By then the sector will be populated by full service digital marketing agencies offering highly refined and professional services. Indeed, those are the ones most likely to thrive and survive. The future is fascinating.