Who Will Serve the Low End of the Small Business Market?
August 1, 2017 | Contributed by: Greg Sterling
One of the perpetual debates in “local” is about the viability of digital marketing products and services for low-budget small businesses. I was having this discussion with Scorpion today. There are plenty of vendors, media publishers and agencies serving the $1K monthly (and above) segment of the market. But what’s available for those unwilling or unable to spend at those levels?
Many providers and vendors shun the low end as high churning, unprofitable and difficult to serve overall.
David Mihm recently released the “Local Marketing Stack,” an infographic that cleverly uses the London Underground as a metaphor for the hierarchy of SMB needs and services. It’s a kind of reverse product roadmap:
- Zone One involves basic operational issues and setup considerations.
- Zone Two is websites, etc.
- Zone Three is presence syndication and reviews, and so on until . . .
- Zone Six, which includes apps, chatbots and beacons
While there are plenty of domain registrars, hosting companies and free listings-scan providers, there’s a gap between the “be everywhere your customers are” advice SMBs hear all the time and the capacity of the lower-end of the market to afford to do that. Accordingly, it’s mostly a DIY world below some budget threshold of, say, $500 or so per month.
More than 90 percent of US businesses fall into the sub-5 employee headcount pool. Facebook is aggressively courting these folks with some success. Google has a harder time with paid search because of the ecosystem of third party resellers and partners that take a cut of the media spend. However, Acquisio asserts that it is possible to deliver paid-search to the low end of the market at scale with automation. However, most service providers are not currently doing it — or doing it well.
As we contemplate the next phase of the SMB digital marketing ecosystem (in the cloud), it’s worth considering what will the lower-end solutions be and who will provide them? Will it be industry specific suppliers or vendors of other products that move into marketing services? Will it be point solutions providers that can deliver very specific “solutions” at very low cost at low overhead (see, e.g., Andrew Shotland’s Locadium ($5 per month) and David Mihm’s Tidings.)
Will the platforms themselves (Google, MSFT, Apple, Facebook) be the ones who serve this market rather than third party agencies, publishers or marketing companies? Or will it be a scattering of small local and regional agencies that repackage and utilize third party tools and deliver customer service face-to-face?
In the past I’ve argued that machine learning and automation may enable a product like AdWords Express to work much more effectively on a DIY basis. There may also be other “automated” solutions that perform with the help of very sophisticated technology and data on the back end. Accordingly, will technology eventually solve this “low budget” problem?
I’d love to hear your thoughts or arguments about the above.