Tom Bates, Founder, Kudzu

Wiley Cerilli, CEO, SinglePlatform

Dave Galvan, President, Schedulicity

Randy Parker, President, SMBApps

John Vitti, Cofounder and CMO, Mobile Spinach

Which SMB solutions will stand out and make a difference in 2012? Our SMB SuperForum discussed some of these during our ILM East wrap-up moderated by Interactive Local Media Program Director Matt Booth and The Kelsey Report Program Director Charles Laughlin. Verticalization, improved customer targeting and providing better value proposition to SMBs were the major takeaways.

“In Silicon Valley, it’s about collaborative consumption space,” said Schedulicity President Dave Galvan. There are more than 60 of these companies sprouting up, offering a peer-to-peer marketplace where individuals can trade goods, services and even places. Galvan cited San Francisco-based Airbnb as an example. The site allows people to list, discover and book unique travel housing accommodations around the world. “From a local perspective, there’s just nothing happening. So when you verticalize something, there’s more ‘there…there,” Galvan said.

Kudzu founder Tom Bates, who is no longer with the company, also sees the value in verticalization. “If you go vertical, you can have a smaller group drive more contribution,” Bates said. Kudzu is a site focused on helping users make informed home service provider decisions. However, Bates said the idea was “smart, but very painful to try and do market by market, particularly when you rely on user-generated content.” When it comes to scale, Bates cited Google and Amazon as companies that have done it right.

But scale is easier to contain when you start at the top of the funnel. So how do SMBs at the lower end gain traction? For starters, SMB site traffic must be more frequent. Houses and cars, for example, are two things that people buy periodically. Another key area of success is forming the SMBs brand. “SMBs want their online presence to represent their P.L.A.Q.U.E: promotions, locations, availability, quality and user experience,” said SMBApps President Randy Parker.

Another issue for SMBs is customer acquisition and determining who to target. Mobile Spinach Cofounder John Vitti says you can quantify what a good salesperson does in a four-part inquiry: “Who did they talk to? When? How do they want to be engaged? And how do I create a winning proposal?” At Mobile Spinach, all selling is computer-based. In preparation for the sales proposal, the company researches demographics and margins. Around 2,000 new merchants a month sign up to the site to receive offers across different verticals.

How to sell to SMBs as a digital marketing and advertising company is evolving. Instead of a cold call, “You can call up a merchant and get them in front of a computer and walk them through a Powerpoint presentation and sign them up,” said SinglePlatform’s Wiley Cerilli. SinglePlatform has one unified platform that SMBs can use to sell a product or service and it updates to social, mobile and listing pages on YP and Foursquare.

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Eight billion dollars. That’s the total estimate of political advertising spend this year given by Andy Slater, vice president of digital agency sales at Katz 360, during our morning session of day 2 at ILM East. Of $8 billion, Slater predicts that online ad spend will be between 3 percent and 5 percent. Slater has 18 years of experience in advertising sales, including 12 years in radio.

“We are a one-stop shop,” Slater said of Katz 360. The digital arm of Katz Media Group, Katz 360 aggregates its digital offerings. For example, it offered a Super Tuesday package for clients in relevant states with a combo of pre-roll video, display ads and email marketing they could send to Democrats, Republicans or Independents. Katz 360 clients include national television and radio broadcasters. “Most broadcasters today know they need a robust and mature digital offering not just for advertisers but for audiences as well,” Slater said. “Digital integration lets them drive traffic from on-air to the Web.”

Agencies and political action committees (PACs) are also more focused on audience targeting rather than site-specific targeting, Slater said. Audience targeting includes capturing a cookie of someone from his or her computer on a website and aligning that with offline data such as household income, place of residence, etc. PACs can further match that data with voting records and deliver a targeted message accordingly. “Online lets them have multiple strategies,” Slater said. He’s seen ad budgets break down spend with one-third in search and targeted display. The rest is used for email marketing, online video and audio.

Although we’ve seen early numbers from the presidential election primaries, the ad spend of local political candidates is less forthcoming. “We are waiting for it to kick in,” Slater said. “Everything else has to vet out until we get closer to the elections.”

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Long before daily deals surged, and now after they’ve peaked and pivoted, loyalty and rewards programs stand as beachheads in the evolving online promotions/commerce ecosystem. At ILM East 2012, three leaders in loyalty discussed how advertising and commerce are quickly colliding, and how “big data” is shaping the new merchant/consumer relationship.

Next Jump CEO Charlie Kim suggested that advertising and commerce have been on a collision course for decades, with the paradigm shifting from acquiring new customers to acquiring new, loyal customers. Data he shared — loyal customers are worth 24 times more than new customers just acquired — supports his theory. Next Jump, which runs 90,000 B2B merchant-funded loyalty programs, is placing its bet on points systems that reinforce status and avoid privacy breaches.

Cartera Executive VP Jim Douglass is a believer in cultivating customer loyalty through hyper-relevant merchant offers that are card-linked to existing bank cards and tie into popular loyalty programs (airline miles, for instance) to motivate purchase. The company uses multiple sources of data to surface targeted deals that the merchant subsidizes only when consumers actually buy. Activity around the brand is then buttressed with deep analytics. “The payments and cards space is turning into an advertising business,” Douglass said.

Bundle is approaching the merchant loyalty space from a user perspective first, operating a consumer-facing site that analyzes credit card data to “rate merchants across several dimensions.” CEO Jaidev Shergill asserted that this enables unbiased views of restaurants that cut through the proverbial clutter of reviews sites such as Yelp. “You’re rating with your wallet.” Behavioral profiles are built, and lists created, that suggest other types of people who frequent specific restaurants, and where else they may go.

Whether it’s card-linked offers, purchase profiles, or points-driven perks, capturing, synthesizing and building actionable insights around data are the centerpieces of marrying loyalty and commerce, the next frontiers of both advertising and deals.

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