To kick off the Local Search Association conference in Las Vegas, we saw lots of data on where SMBs are in the current environment of media transformation, and what it means for providers of local advertising.
Greg Sterling, Senior Analyst, Opus Research
Neal Polachek, Advisor, vSplash
According to the U.S. Small Business Administration, there are 27 million SMBs in the U.S.. Once you whittle that down to the addressable marketing (excluding solo businesses like eBay sellers), there are about 6 million storefronts that advertise.
That’s still a massive opportunity, and the reason why so many advertising providers have flooded into this market in the last decade. It’s now a saturated marketplace of search, print, broadcast, social, mobile, email, presence and reputation marketing.
Another trend is that SMBs are more challenged than ever. The big box movement has impacted the SMB retail sector and now that shift is happening in service industries like plumbing (ServePro), dental (Aspen Dental), and auto (YourMechaninc) to name a few.
Combine these factors and SMBs are challenged for time, new business acquisition, retention and lots of operational challenges. This has led to lots of “one-stop-shop” offerings and “trusted partner” rhetoric among local media sellers (or resellers).
But no 0ne has really cracked the code. Traditional media is an easier buy but a more opaque ROI proposition. Digital media is inversely hard to buy and manage, yet much clearer in tracking ROI. The latter is where the standards have moved.
This has led to familiar SEO issues, listings management and other things. Meanwhile, SMBs “aspirational” advertising use — via survey data — is often mismatched with what they’re actually doing. Mobile landing page optimization and Social media are a few examples.
Closing the gap between where they should be (or want to be) and where they are is a $3.2 billion opportunity according to vSplash data. This is easier said than done because of the oversupply and many sales calls that SMBs field on a weekly basis. Their guard is up.
One takeaways is that an easier path to the SMB wallet could be through some of the operational technologies that help them run their businesses. These tie in with marketing, customer relationship management, retention, and is less saturated on the supply side.
Neal Polachek points to Demand Force and Yodle as a few examples of some that have started to do this.This also relates closely to the”operational lock-in — a big area of opportunity in local that we covered last week and will be watching closely on an ongoing basis.