Last week, Yext announced that it will add new tools to help businesses synchronize their content and data across multiple services with the launch of a product called Pages. This new feature is part of Yext’s larger vision, which is to build a “Yext Cloud” that helps businesses manage all of their marketing needs from one place. This strategy dovetails nicely with the hypothesis I made in early October on Street Fight in a post titled “Could Simple Website Builders be the Next Hyperlocal Superstars?”
In there, I discuss that because the hyperlocal and online marketing technology space is highly fragmented and difficult for small businesses to navigate, the companies that will succeed are those that can aggregate all of a small businesses’ essential online and hyperlocal marketing solutions into one platform. I suggested that simple website builders like Wix, Weebly and Squarespace could be in the best position to do so because they are the first contact with a small business coming online — and well placed to educate these businesses about the necessary solutions to their online marketing needs.
In retrospect, while simple website builders do have an advantage, I think that the first large-scale technology company that can service small businesses in all of the following four industries will have the best opportunity to be the next leading hyperlocal superstar: 1) Website building, 2) email/loyalty marketing, 3) hyperlocal technology and 4) Online advertising, promotion and deal solutions.
A Few of the Leading Technology Companies with Scale Servicing Small Businesses
What’s Next for Top Tech Companies that Serve Small Businesses
So what do top tech companies like Wix, GoDaddy, ConstantContact, Yext, and Intuit DemandForce need to do to be successful going forward? In my opinion, the company that will be the clear winner in this market will be the one that can provide small businesses with all four of these solutions under one platform. The current landscape is still too fragmented, with hundreds of hyperlocal technology solutions available to the local business. Even the companies above are still fragmented, offering only a small portion of online solutions a small business truly needs.
Wix and GoDaddy have the website solution locked-down and a captive customer base, but lack the plethora of hyperlocal solutions a local business needs to round out their online marketing. ConstantContact has built a massively powerful e-mail marketing solution, but, beyond its acquisition of SinglePlatform, has minimal hyperlocal tools available or paid SEM solutions to help their customers expand their reach. Yext, DemandForce and Neustar are building some great solutions, but let’s face it: educating small businesses on the importance of accurate listing information across the web is no easy task. They need to provide small businesses with additional solutions from the other three categories to truly succeed.
What’s Wrong with the Status Quo?
One might say there is no need for these companies to branch out beyond their quadrant. Perhaps they could all stay relatively dominant in their market by continuing to build and expand their existing business. Unfortunately, this is not feasible.
These companies all share many of same customers. In fact, large portions of these companies’ customers are not small businesses, but local social media marketing firms who are reselling their solutions. As soon as a large player in one of these quadrants begins acquiring plug-and-play solutions in other quadrants, social media marketing firms will simply gravitate to the company that’s providing the easiest platform for them to use.
Think about how Wix’s dominance could change if they were to acquire MailChimp, or if ConstantContact acquires Weebly, or if Google acquires solutions from all three quadrants. The remaining players will be struggling to keep up in the small business services market.
I expect you’ll begin to see a lot of acquisitions over the next few years from these players. While some may look to build certain solutions like Yext has done, the smartest play is to begin partnering with and acquiring some of the key fragmented hyperlocal and online marketing technology players. They have built domain expertise within their niche and will be able to provide small businesses with the best solution out of the gate.
If you’re a business development, operational or C-level exec at any of the large players in this space, I’d love to get your feedback and thoughts on the above either in the comments or directly.
Sean Barkulis is co-founder of UPlanMe, a hyperlocal, technology platform that helps local businesses market and promote their specials and events across the web. Through UPlanMe Consulting, he provides local businesses with full-service digital marketing solutions. He is also author of “How to Market Your Business Online.” He can be reached via Twitter at @SeanBarkulis.