Retail SMBs are more poised than their counterparts in other verticals to adopt sophisticated digital advertising and marketing. This is clearly shown by BIA/Kelsey’s Local Commerce Monitor ™ (Wave 18) survey of small businesses.

Retail SMBs are already highly oriented to digital media, with plans to spend 43 percent of their total ad budget on digital media in the next 12 months*. They rank social media marketing, SEM/SEO and email marketing as their top priorities for advertising and promotion in the next 12 months*.

There are multiple signals in the LCM data that we think point to big expansion into digital by Retail SMBs:

— They’re experienced in maintaining customer lists, with 71 percent having maintained a customer list for over a year. With 61 percent of their customer lists  in digital form, they’re well positioned to move into marketing automation services like CRM (where they’re still at a low utilization level of 21 percent).

— They’re big users of ecommerce, with 90 percent reporting ecommerce sales.

— They’re highly satisfied with the mobile advertising they’ve done so far, reporting high ROIs — although usage of mobile advertising and marketing is still modest.

— They’re big on customer loyalty programs, which are used by 43 percent of SMB retailers. Since only 30 percent of these programs have been digitized, we believe this too represents another growth opportunity.

— They’ve registered an interest in many advertising and marketing services, particularly ecommerce services, online satisfaction surveys, email marketing, and online leads management.

In sum, we believe local retailers will be upping their digital game on multiple fronts in the near term. Since they’re such a staple of their communities, this shift will reinforce the broad and rapid digitization of daily life.

*The 12 month period following the Local Commerce Monitor Wave 18 survey, conduced in Q3, 2014.

These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Retail vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

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SMBs in the entertainment vertical love video advertising. We’re talking movie theaters, event venues, catering, on-demand performers*, etc.. As is conducive to their craft, they’re big fans of online video, particularly website and YouTube videos. They’re also big on cable and broadcast TV.

This is according to BIA/Kelsey’s latest cut of SMB survey data (information below). On average, these Entertainment SMBs spend 12 percent of ad budget on video, much more than overall SMBs. When applied to their high ad spending, this notably produces an average annual video spend of $4,000.

This class of SMBs are also heavy users of social media of all types, and have a high interest level in advertising and marketing services. This is the wrap: Entertainment SMBs are good prospects for video and social media products. They use a lot, spend a lot, and they have their antennas out.

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These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Entertainment vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

*SMBs in Entertainment is a roll-up category that includes: Restaurants, Bars, Hospitality (Catering/Hotel), Music, and Entertainment – miscellaneous.

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The Local On-Demand Economy (LODE) is dominating tech headlines and VC funding, not to mention our own coverage. But what does it mean for existing local media companies and to BIA/Kelsey’s decades-long sphere of local influence?

It’s a key question considering that LODE could displace local marketing to some degree. But we see it as more opportunity than threat. As we’ve examined, LODE’s lowered barriers for SMBs and “micro-entrepreneurs” makes its addressable market considerably larger than the existing local ad market.

Is it therefore a greenfield area? And if so, are existing local media companies better positioned than LODE startups and pure-plays to capture it? So far the latter are winning, but the play for local media companies will be to bundle LODE offerings to diversify and find new sources of SMB spend.

Following a roundtable discussion on this financial outlook last week (video embedded after the jump), a related excerpt from our LODE white paper is below.

LODE: What Does it Mean for Local Media?

— Companies currently selling media or advertising to small businesses should gain an advanced knowledge of LODE — both its fundamentals and ongoing evolution.

— Best practices, current and evolving, will develop quickly and require a keen eye to learn winning strategies. This education by immersion is the first step towards devising and deploying LODE products.

— Given the possibility discussed in this report that LODE services could displace marketing in some situations, an early lead for local media companies could offset any potential losses to core products caused by new LODE entrants.

— If LODE is indeed a threat, media companies who embrace it can own their destiny, versus those who ignore it and are forced to realize too late that it is causing attrition to core revenue streams, such as SMB-oriented ad products.

— Similar lessons have been learned by industries facing disruption; and faced with the decision to embrace a new — albeit threatening and potentially cannibalistic — channels.

— Moreover, LODE should be viewed more as opportunity than threat. This can come about by embracing it and uncovering its potential sources of new business growth.

— For example, LODE’s customer acquisition efficiencies make it tenable for service providers who can’t afford traditional marketing. Therefore, its addressable market could exceed local advertising’s current boundaries to a larger SMB universe.

— LODE’s potential for new business growth is coupled with potentially increased average revenue per advertiser (ARPA) among existing SMB advertisers.

— It can also boost retention, given that many LODE services also fulfill SMB operational needs (demand aggregation, scheduling, payment processing, etc.). These have higher switching costs for businesses than advertising and marketing.

— In incorporating LODE into service bundles, local media companies have an advantage over LODE pure plays. This is due to existing sales channels, economies of scale, and compatibility with existing advertising and marketing offerings.

— There is also a one-stop-shop appeal in that SMBs and 1099 operators can save time with a single provider for both marketing and LODE-based customer acquisition tools.

— Early integration of LODE services by traditional media companies can establish familiarity and education. This will be required during LODE’s beginning stages when an early mover advantage can be gained in building knowledge, brand, and network effect.

— Media companies should carefully consider the pros and cons of building versus partnering. The former requires greater investment and reward. The latter, via API integration, can involve little risk and utilizes best or breed functionality in a given area. The cost for this fast-tracked functionality is a revenue share with the API’s owner.

— Based on the speed at which LODE is moving — a component of the speed and nimbleness of app development environments — any LODE strategies and product rollouts will need to happen much faster than is typically done by local media companies. The innovation cycle will be a function of weeks, not months.

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Not only are SMBs in the Professional Services vertical heavy users of Social Media for advertising and promotion, they are highly engaged on social media, according to LCM. 3/4 reported that they track “likes” in social media, while 57.4% monitor customer comments online.

There is a big opportunity with this group to offer CRM solutions because Professional Services SMBs stay connected with their customers but only 20% say they use a CRM system. 88.0% have maintained a customer list for a year or more, while an additional 6.4% have maintained a customer list for less than a year.

The full report can be viewed and downloaded by clients of BIA/Kelsey here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor? survey. In the coming weeks we will be looking at SMBs by additional vertical categories. Our Home and Trade Services SMB report is already available. To learn more about our LCM survey of small and medium-sized businesses, click here.

Click here to purchase the Professional Services SMBs — LCM Wave 18. To purchase any of our other Local Commerce Monitor drill-down reports, check out our new BIA/Kelsey Shop.

*Professional Services vertical includes consulting, legal, architecture, and computer software. Financial Services SMBs are not included, but will be profiled in their own vertical report.

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Here we are in the middle of National Small Business Week, which seems like a great time to unveil the agenda and key themes of our upcoming SMB conference, which happens Sept. 29-30 at the Marriott Denver Tech Center. This event helps companies understand what makes SMBs tick so they can more successfully build and sell digital marketing solutions for small-business advertisers.

We are bringing a new look and feel to this year’s SMB conference — a faster pace, deeper audience engagement, a much more tactical focus and truly candid conversations about what it really takes to win in this exciting and challenging space.

​The preliminary SMB 2015 agenda reads as a road map of the most exciting opportunities and vexing challenges facing the local SMB digital marketing ecosystem. Keep an eye here as we add VIPs in the local SMBs as headline speakers, executive interview subjects and panelists.

Our Day 1 Headliner will be a joint session with Chris Terrill and Craig Smith, CEO and COO, respectively, of Home Advisor, a leader in matching home improvement leads with qualified merchants. Chris and Craig have been deep in the SMB trenches and understand what it takes to find the right business model for success in this space. Other headliners, including leaders from many of the premier SMB facing brands, will be announced soon.

Here are a few of the topics we’ll tackle at SMB 2015:

Making Big Data Small Enough for SMBs
Is Location the New Local?
Programmatic for SMBs — Is This a Thing Yet?
Is There a Play for the Long Tail SMB?
We’re Not Going to Say ‘Content is King’ — But It Kinda Is
Crowdfunding and Micro-lending — The Democratization of SMB Finance?
Bringing Hollywood to Main Street — Evolutions in Video Advertising

The post First Look at BIA/Kelsey's SMB 2015 appeared first on BIA/Kelsey - Local Media Watch.

What is the trajectory of U.S. mobile ad revenues? Is the emerging on-demand economy the “Anti-search?” And what is Facebook’s master plan for SMB localized marketing? These are a few topics we tackled over the last week, curated and aggregated into the Local Media Watch newsletter.

LMW has recently doubled its frequency to weekly, so we’ll also be posting it here. Entire issues are available on the web in addition to email. So you can get it here every Friday or subscribe (free) to get it in your inbox during its regular Thursday circulation. Click below for the latest issue.

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Facebook is felt by some to have the potential to dominate SMB online advertising because of its incredibly high organic usage. But the challenge to drive even more SMB advertisers remains. The company currently reports that it has 40 million SMBs with Facebook pages around the world. Two million SMBs are paid advertisers, or five percent of its SMB page holders.

Today, Facebook unveiled several new small business support programs that it hopes will boost its SMB conversion rates. These include a series of local SMB events, the launch of self serve tools and chat and email support.

We got a hint of what was to come during the March 25 keynote by Facebook Director of Small Business Jon Czaja at BIA/Kelsey NATIONAL in Dallas. During his keynote, Czaja emphasized that Facebook can lift sales results for SMBs by a high percentage if it is added to traditional media ad campaigns.

He also asserted that Facebook does well on its own. He noted that Facebook’s accuracy for narrowly targeted online campaigns is 89 percent, or more than twice as high as the industry’s 38 percent average. Advertising on Facebook provides $8 back for every dollar invested, and a 12x boost in conversion, Czaja suggested.

While Facebook heavily emphasizes self serve for SMBs because they demand it, it is also eager to partner with agencies and others, adds Czaja. “Facebook can’t build everything itself. If there are other partners out there to build on our platform and encourage better performance, then advertisers will be able to choose to go to Facebook or an agency. It’s an ‘All-of-the-Above’ strategy.”

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According to BIA/Kelsey’s Local Commerce Monitor, Wave 18?, 72.2% of the SMBs (small- to medium-sized businesses) surveyed* use Social Media to promote their business. Of the different social media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, Facebook Page ranked the highest, followed by LinkedIn and Twitter. Facebook ads were close behind in fourth place. Instagram and Pinterest, which didn’t make the chart below, are achieving traction — each has close to a 10% reach.

Social media can provide SMBs with an immediate and interactive connection with their customers. So how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on social media? In our survey we asked several questions on the satisfaction of the various advertising and marketing choices made. It should be noted that only SMBs who reported using a particular media were asked for their ROI assessment of that media.

While only 15.2% of SMBs surveyed reported using Facebook ads to advertise and promote their business, they gave it the highest combined ROI of Excellent (10-19x spend) and Extraordinary (more than 20x spend) of the social media in the survey, at 37.3%. Instagram and Other Social, which 8.1% and 5.4% of SMBs surveyed, respectively, reported using for advertising and promotion, tied for the next highest combined ROI at 30.6%, followed closely by Twitter ads at 30.5%. Instagram and Twitter ads both had more respondents rating them Extraordinary than Other Social. LinkedIn, which was second among SMB users, was ranked lowest of the social media, with combined perceived ROI (Excellent and Extraordinary) of 18.6%.

SMBs in our survey on average spent 21.4%, or $7,638, of their annual advertising and promotion budget on Social Media players, such as Facebook and Twitter.

Local Commerce Monitor? (LCM) is BIA/Kelsey’s ongoing survey of the advertising behaviors of small and medium-sized businesses (SMBs). To learn more about our LCM survey, click here.

*From the Full Sample.

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Leads are coming from everywhere, and the digital marketing firms have adjusted to this reality. ReachLocal, for one, has now opened up its ReachEdge lead conversion and marketing automation software. It now has the capability to track leads and other activity from a wide variety of unassociated marketing sources.

Chief Product Officer Kris Barton briefed BIA/Kelsey on ReachEdge’s evolution, noting that the company’s efforts to increase transparency and simplicity will ultimately boost conversion rates. Barton says that “decoupling” the software is the direct result of customer input. Some customers, for instance, had invested in redesigned website and didn’t want to have to abandon it in order to sign up with Reach.

The new version of ReachEdge is $149 a month and includes a free trial. It also features plug-ins for publishing systems such as WordPress and Drupal. The software has also been enhanced for mobile. Customers can use their phones to receive emails and text alerts. It also has integrated reports that are “focused entirely on ROI” and are much clearer than Google Analytics, says Barton.

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What is Google’s Mopocalypse really all about? Is scheduling the new centerpiece of SMB platform players? And what are the biggest drivers of the local on-demand economy? These are a few topics we tackled over the last week, curated and aggregated into the Local Media Watch newsletter.

LMW has recently doubled its frequency to weekly, so we’ll also be posting it here. Entire issues are available on the web in addition to email. So you can get it here every Friday or subscribe (free) to get it in your inbox during its regular Thursday circulation. Click below for the latest issue.

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