It's true. Size does matter when setting strategy for advertising campaigns. Focusing efforts where the largest market opportunity exists is certain to net the high ROI clients demand.
As the economy creeps back from recessionary levels, no market holds greater potential than the small and medium size business (SMB) market. Twenty-seven million companies, ranging in size from one to 500 employees, are exhibiting pent-up demand for goods and services postponed during the downturn. Add the Small Business Administration's report that found 80 percent of U.S. businesses have nine or less employees, and there is little doubt that SMBs are a very lucrative group to target.
Defining and engaging the market
The SMB group is far from homogenous. Effectively reaching this fragmented yet significant group requires a view into the differences among submarkets such as SOHO (small office/home office), sub-segments of companies with up to 100 employees, and the mid-sized market of 100 to 500 employees, each with different characteristics and buying behaviors. Most advertisers have developed distinct messaging and programs for their targets within these groups, but well-defined messaging is only one part of the equation. Locating and engaging this audience is the greater challenge.
While there are many means available to identify the SMB in the online environment, the most effective solution might not be the most obvious. SMBs don't have the luxury of time afforded to management at larger organizations, and they live and die by revenue generation. Sites that create tangible value in growing revenue take precedence over high-traffic sites with a different value proposition. Effectively targeting your message on sites where SMBs "work" will present your products and services while users are in a mindset more likely to relate to them.
Small business owners wear many hats. They are typically time and resource constrained, as they are worried about sales, making payroll, healthcare and benefits, credit, tax issues, and more. The value proposition that will move their attention away from their primary business concerns to a new product or service must be compelling or embedded in where they "work."
Targeting the market
Companies clearly targeting the SMB -- such as Intuit, American Express, and FedEx -- have developed the kinds of programs that are highly directed to this work environment. As a result, their mindshare among this audience has grown substantially. The reason why a person visits a website influences the likelihood of whether he or she views or ignores the accompanying advertising.
One common mistake that immediately isolates small business owners is targeted messages directed to titles such as IT, procurement, finance, etc. In smaller organizations, the business owner is the primary and often only decision maker. Until a company hits a critical mass of approximately 25 workers, job functions are likely to be focused between the business owners and one or two key staff. Since the largest group within the SMB market consists of single-employee firms, targeting by function rather than job title is crucial for success in this market.
A key benefit of online advertising is the ability to engage in highly personalized messaging and specific targeting that further increases success rates. Websites allowing segmentation according to demographics -- including vertical industry, geography, and company size -- are ideal for SMB advertising. According to the last U.S. Census, the top five industries with the largest percentage of SMBs are:
- Dentists
- Freelance writers
- Home appliance repair
- Chiropractors and other healthcare providers
- Real estate agents
Such information, coupled with the technical ability to target those industries, provides a powerful advertising tool.
Finding the right publishers
The first and most important point to consider is where the SMB audience gathers en masse. Determine what websites allow advertisers to reach multiple businesses with individual messages at once. For a bigger bang for your buck, target the sites that provide a real value proposition for the SMB and a means to help them grow revenue. Locate community sites where businesses are connecting and doing business with other businesses. Look for sites that provide business information to help advertisers and brands research, prospect, and connect directly with small businesses and their owners.
Many key SMB vendors such as Dell, AT&T, and American Express have created robust sites full of useful information that attracts communities of SMB users. In order to target the elusive yet massive SMB audience, follow SMB focused blogs and social media in order to stay on top of what's important and affecting the SMB community.
While size matters, when targeting SMBs, it's more important to find the right outlet or website where the needs of the audience will be met. Delivering your message in places where SMBs see their own ROI is sure to increase your advertising ROI as well.
Pam Springer is president and CEO of Manta.
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