Archive

Self-Service Already Dominates SMB Digital Marketing: What’s Behind It?

Do business owners want to outsource their digital marketing to a single trusted partner or do they want to control it all in house? Data from LSA research partner Thrive Analytics reinforces the common industry view that a majority of traditional SMBs would rather work with a single trusted provider than multiple specialist firms or do it themselves.

Single trusted provider

I’m in personal agreement with this finding; this has been my anecdotal experience. It’s also consistent with other surveys I’ve developed or seen in the past from third party sources.

It makes logical and intuitive sense: even digitally sophisticated SMBs are time starved and don’t want to become experts on digital marketing. The analogy is financial management. Most people would prefer to have a professional manage their money and check in with that person periodically rather than have to do it themselves.

Yet there’s enough contrary data to raise questions about the above understanding and assumptions. In a survey I developed on behalf of YP in 2013 (among 1,200 SMBs) a substantial group (40%) said that they would prefer to do all their marketing in house. Single partner was selected by 48% of respondents (in the form of the second two answers combined).

SMBs digital marketing in house

In that same survey we discovered that most of the “management” of marketing was being done in house. This begs the question, what does it mean to self-manage print newspapers or yellow pages or TV? Nonetheless most of the digital marketing was being self-managed in-house.

This flies in the face of the “self-service isn’t here yet” meme that dominates local media industry discussions.

in house marketing management

Your immediate thought may be: these aren’t necessarily representative SMBs. However these respondents were sub-10 headcount firms with less than $5,000 to spend annually on marketing. In almost all respects they were the types of SMBs that would have used (and still were using) yellow pages, newspapers and other traditional media methods a few years ago.

These relatively low budgets (given the proliferation of channels) may be driving some of the self service/in-house management. However, I’ve always seen these findings as a proxy for frustration or distrust of vendors in the market: SMBs want to manage their marketing in house because they’ve been frustrated with past experiences with third party services. However I’ve always held the belief that they would rather actually use a trusted third party expert.

Yet earlier this week Local SEO firm BrightLocal published results of a late 2014 survey of 736 SMBs (mostly North Americans with some European responses). Most of these respondents had fewer than 10 employees and less than $1,000 to spend on marketing each month.

Here the large majority (64%) were also handling their digital marketing efforts themselves:

In-house digital marketing

What are we to conclude or infer from these data? First there appears to be a very large “self-service” population of SMBs already in the digital market. This doesn’t speak to whether they’re doing it effectively of course. Yet it exists, which is an important point.

It’s not clear whether they represent a group that has already “moved on” from third party service providers or is ripe for acquisition with a promise of greater efficiency and effectiveness. SMBs are notoriously price and cost sensitive and so that represents a challenge for third parties with significant overhead and margin requirements.

It’s not easy to reconcile the data showing a desire to work with a “single trusted provider” with these other data that show a desire for internal control and existing self-management. Of course any generalizations about the “SMB market” tend to be crude given the diversity of small businesses, their budgets and sophistication levels.

Perhaps the way to reconcile these data is the notion that presented with the right program — one that is both cost effective and can demonstrate ROI (no easy proposition where SMBs are concerned) — some number of these “in-house” SMBs would sign up with a third party provider. But for reasons of cost, ROI and other factors they simply haven’t met the right one or have stopped trying to find one.

It may also be that at it’s too difficult and unprofitable to service low-budget SMBs. This segment of the market may simply be relegated to self service by default because vendors cannot deliver meaningful or obvious ROI at lower budget levels. We have a session on this topic at our upcoming conference in April, LSA 15, which should be very interesting: “Serving the small budget advertiser.

How do you react to these seemingly contradictory data sets and can you see a way to reconcile them?

Leave a Reply

(Comment Guidelines)

*

Close

First Name

Last Name

Company Name

Email Address