The Myth of the Digitally Dumb Mom-and-Pop Shop

An old sawhorse of the punditocracy is that one of the reasons hyperlocal is taking off so slowly in terms of advertising revenues is due to the digital noobieness of local merchants. Journalists (myself included) love to trot out stories reminding the world that X-percent of mom-and-pop shops still don’t even have a Web site, for crying out loud. Yes, you hear stories that lots of small businesses are active on Twitter and Facebook and check their Yelp profiles. Some even pay marketing agencies to run their social side. But for the most part, these peeps are trapped in the dark ages. Or are they?

BIA/Kelsey released the latest installment of its Local Commerce Monitor research. This is a unique longitudinal 15-year tracking study of how SMBs spend money on advertising and their attitudes towards local advertising and media. The analysts found that SMBs in the survey planned to spend a surprising 26% of their advertising and marketing budgets on digital campaigns. Marketing and advertising consultancy eMarketer forecasted recently that total online ad media spend for 2012 would be roughly 23% of the total media spend across all mediums. Surveys can be wrong. But this would imply that the mom-and-pops are actually ahead of the rest of the advertising world in embracing digital. Go figure!

It gets better. Nearly half of respondents (49 percent) said they buy online advertising (including SEM) themselves, debunking the myth that only a handful of brainiac small shop owners had cracked the admittedly complicated SEM buying scenario. More than half (52 percent) are using social media to try to generate business. The quality and commitment of those campaigns surely varies widely but the implication is clear. The small businesses who “get” social are no longer a small minority. Nearly a quarter said they plan to have a video on YouTube in upcoming months (which might be good news for and its efforts to sell video sponsorships and video-driven directory listings).

Not all surveys have found that mom-and-pops are hip to local online ads. In a survey of 51 local merchants with revenues ranging from less than $100,000 to over $5 million conducted by Street Fight Insights, less than 10% said they had spent significant dollars on a hyperlocal campaign. Street Fight also found that small merchants were more interested in daily deal sites than traditional online advertising. I look forward to Street Fight coming out with a broader sample but these seemingly contradictory results could be chalked up to the relative infancy and volatility of the sector.

Flawed as they may be, the BIA/Kelsey findings actually conform closely to conversations I have had with many small business owners. Unlike the bigger companies, where ad budgets have plenty of wiggle room and specialists carve up media buying, analytics and creative duties, for mom-and-pops stuff has to give them a decent return the very day after they execute their campaign. And because they are in small communities, their feedback loop is very tight. So for many of the technology driven startups that have had difficult times cracking the hyperlocal market, these results may deliver a relevant data point. Namely, your product may not be easy enough to use or popular enough to merit attention from these smaller shops. Because it has to work the first time for them to stay interested.

Not that this should be discouraging. In the early days of the Internet, websites were atrociously hard to use and navigate. Diddling with search engines to get decent results pre-Google was a nightmare. Things are always sharper and harder on the bleeding edge. The mom-and-pops feel that edge more acutely than most and will not accept inferior UI or product design. Because, unlike the big guys, they don’t have an office job and are always one step away from having no business at all. Clearly they are willing to try new things and embrace new tools, at least as aggressively as the rest of the market (call it the SMBification of IT). But they will ditch those tools just as fast. So make it stick. You only get one chance.

Alex Salkever’s Personal Fight column appears every Wednesday on Street Fight.

  1. Paul
    March 7, 2012

    Alex – Hooray for you, for writing a very insightful, real-world view on local small business’ marketing efforts. As the CEO of Fanminder, I see this dynamic every day.

    We have 6,000 small businesses using our social/mobile marketing platform. We are a built from the ground up DIY platform – we’re not designed for the local marketing guru, ad agencies, mid-market firms or heaven’s forbid, a consumer app trying to pimp users to merchants. We’re 100% built for the small business owner.

    So it’s very refreshing to hear someone who gets that many owners are digitally astute. Many(but not all) of our customers are super sharp cookies. They know what people are saying about them online. They work very hard to collect contact info at every step of the way. They use multiple channels to reach customers. They run their own flash sales. They excite customers with hosting regular events. And they try on (and off) all different kinds of solutions like ours as if they’re in a dressing room. If it doesn’t work right the first time, they’re outta here! In short, they’re have a fine eye for what works and if it doesn’t provide immediate value they’re on to the next service.

    These business owners are our daily inspiration.

    We’ve believed that a big part of the reason of any lack of adoption is that solutions aren’t yet simple – or paradoxically, powerful – enough. And salespeople perpetuate this myth of the knucklehead owner so they can line their pockets with artificially high profits with sales pitches about how complicated the world is out there.

    This said, it’s likewise true many small businesses would rather pay for someone to do their marketing then do it themselves. Do it for you services tend to receive 10X or more the revenues and thus attract a lot of attention (think of the $300Bn Tax prep market vs. the few billion in DIY tax software tools, or Groupon’s model).

    But as any Innovators Dilemma disciple will share, today’s simplistic, affordable DIY tools inevitably munch up market and take deep and permanent bites out of over-priced, over-featured Do It For You Services. Charles Schwab, Intuit, and Honda are all wonderful success stories.

    Speaking on behalf of all nascently-forming DIY Marketing Tools, we can’t wait to join their ranks!

  2. March 14, 2012

    Love it. It is a myth completely. I would say that digitally many of them are trying to innovate and use social marketing. For example “like us on facebook” is extremely pervasive, but alas the challenges are greater than that. There utsa be this big yellow book you could just put your ad in, or offer a free meal to the local food journalist and that’s all you needed. Now there is a miriad of different streams you have to broadcast to and manage, Sprout Social, Klout, Foursquare, facebook, Groupon, Twitter, and now Pintrist! That’s overwhelming for a Mom & Pop who is juggling chainsaws all day. I am sure there are startups just to solve the problem of startups now. What’s *my* recommendation to the mom and pops for marketing? Go back to basics, get involved as a sponsor in the most widely read local/community blog an make a strong presence there. Sponsor events, start or go to community meetups, do deals exclusively with that source. Make your presence known in the community and choose only one or two other online marketing streams that provide the biggest reach in your area.

  3. Rxforbiz
    March 19, 2012

    It’s NOT a myth–many small, hyperlocal, businesses (I mean mom n pops of less than 20 employees) are completely ignorant about the web in 2o12. I have sold print advertising t0 thousands of them over the past 10 years. Yes, they know they ought to be on the interweb, and if you can throw in a cheap website for $500, they might go for it. But now you’ve got to deal with the revisions, and the editing and the content management (if you offer it). It’s simply not worth it.
        With each passing year, more and more hyperlocal business owners will have grown up with the web–but it’s slow. As for “Sprout Social, Klout, Foursquare, facebook, Groupon, Twitter, and now Pintrist!”, you’re wasting your breath.

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