Getting More SMBs Online: A Vertical Challenge

Mr. Local SEO Andrew Shotland writes today about vertically oriented Web site development and hosting products for small businesses. This is an interesting concept because it brings together two local trends we’ve written extensively about: Webification and verticalization.

First, with Webification, the concept is that there are many businesses out there that don’t have Web sites. With this, the addressable market for online advertising is diminished. This is the reason why many search-based advertising providers such as Google and Yahoo! have lowered the barriers to getting online with free or cheap Web site hosting and development products.

At the same time we’ve seen growth in landing page or microsite offerings such as Smalltown that offer a de-facto Web presence that’s cheaper and easier (key factors for SMBs) than building your own Web site. These online training wheels, the thinking goes, can get small businesses online where they will slowly graduate to online advertisers.

Overall the goal is to expand the addressable market. And for individual providers, these products are offered with the hope that being the one to pop an SMB’s online cherry could create an advertiser for life. At least that’s the hope.

Vertical Leap

So what about verticalization? There is a lot of talk about vertical search lately. On a basic level, the thinking goes that vertical search has a refined corpus of content and ranking algorithms that ensure more specific and relevant results to certain users. There are also clearly more contextually relevant targeting opportunities and higher CTRs for the same reason.

This targeting concept carries over to Web site development, as Shotland points out, in having providers that have the design and SEO sensitivities that are specific to certain verticals. And as things are consolidating in the world of Web hosting providers (Hostway/Affinity, Websitepros/Web.com, etc.) there is a general convergence of abilities and offerings to appeal to small businesses.

This trend should continue with consolidation of search/IYP advertising and Web site development. But as Shotland points out, this won’t only join Web site development with print, online, SEM and the rest of the Yellow Pages sales tool belt, but it will be brought into the fold in specific vertical increments. This would be done to appeal to (and maintain relationships with) verticals that represent traditional Yellow Pages sweet spots, like trade services. Indeed, these are the categories that arguably need the most help getting online.

Furthermore, it’s often stated that the Yellow Pages industry as a whole has about a one-third penetration of the SMB marketplace. It could be that traditional Yellow Pages products are cost prohibitive or not of interest to these businesses. Either way, offering a new, less expensive, vertically specific and format-varied bundle of online services could help chip away at this sizable market opportunity.