Upcoming BIA/Kelsey White Paper: Reshaping Local Business Marketing

BIA/Kelsey continues to engage market leaders in its coverage areas in order to collaborate on research reports. There’s one currently in the works, about optimizing SMB Marketing Efficacy, sponsored by Vendasta and written by our new associate Mitch Ratcliffe.

To preview the paper’s subject matter, we’ve included a teaser below. Stay tuned for the full release sometime next month. Meanwhile, an extended version of the below summary is available in physical form, if you’re at our Leading in Local conference. Stop by the Vendasta booth for a copy.

Measuring SMB Marketing Efficacy: Logistics and Storytelling Will Reshape Local Business Metrics

SMBs are the new frontier for digital services. They will require a new reseller/marketing services layer in local media to spread digital marketing practices to millions of individual stores and business people. For many digital marketers, small business is suspended in time between the Main Street barbershop familiar from The Andy Griffith Show, where folks stopped in and talked even if they didn’t get a haircut, and the high-speed increasingly personalized digital services based on advanced logistics that characterize major global brands. If he were on TV today, Floyd the barber would be studying his web engagement metrics in addition to providing a friendly haircut.

Digital services for local business are about to catch up with global brand marketing and, as with every business that has crossed the digital divide before, measurement of tool performance and tactics will be critical to success. Measuring web promotions; Providing transactional and support services for complex products and services; Facilitating loyalty and customer engagement programs, all these daily digital chores are poised to become business as usual. The losers in the local goods and services race will wander off-course without solid metrics, spending too much to get poor results as others focus their limited marketing budgets with greater precision. The big story in the enterprise over the past decade, the rise of metrics-driven experimentation and marketing, is about to repeat itself at the grassroots on Main Street.

Technical and economic drivers are already reshaping the local media economy. BIA/Kelsey Local Commerce Monitor reports that SMB plus spenders, business that spends at least $25,000 annually on advertising and promotion, 35.2 percent of ad spending will be allocated to digital in 2015, up from 24.5 percent in 2011. 57.7% of these plus spenders pay an average of $7,238 a year to maintain an online presence. More SMBs are also paying for marketing help to tie together their online messaging across Twitter, Facebook, mobile sites, Google and their own websites, as 40.9% of surveyed small businesses reported hiring agencies and staffing to manage their presence, the “Do It With Me” approach.

Our analysis suggests the “Do It With Me” (DIWM) model, collaboration between an SMB and one or more vendors to build complementary messages, which benefit the individual client business and create network effects, such as qualified participants in shared loyalty programs, cross-promotional campaigns and integrated transactional systems that flag cross-selling opportunities for SMBs, is the most viable approach. This phenomenon is visible in the specialization of digital sales teams in iYP markets, the agreement by YP.com to represent Yelp promotions to its customers, and the emergence of vendors that “sell digital arms,” marketing tools and services, in a consultative relationship with the customer, among others. We expect to see Google and Facebook partnering more extensively in this area in coming months.

“A lot of channel partners sell digital only five percent to 10 percent of the time, which is a sin” said Jeff Tomlin, Senior Vice President of Vendasta, a Saskatoon, Saskatchewan-based marketing tools vendor that has adopted the DIWM model. Instead of investing in direct sales, Vendasta seeks value-added resellers who can provide on-site services to complement its own reputation monitoring, presence management, social and mobile marketing optimization services, which are presented in a dashboard for the SMB customer. Agencies that bundle Vendasta services share access to their customers’ dashboards and can take on creative and production tasks on behalf of the SMB.

Recall Floyd’s barbershop. There was no “marketing strategy.” There were two chairs, a phone (where an operator waited to connect the call), some magazines and, perhaps, a television for the customers to watch the World Series in some later years of its fictional life. Floyd did not have to compete with other barbers through media. Compared with the communications wave rolling through the economy today, Floyd’s approach to customer engagement grows more fictional and quaint every passing year.