SMBs and Self-Service: Are We There Yet?

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The question of whether or when SMBs are going to self-provision online marketing has been a topic of speculation and intense debate for at least a decade.

During the dot-com boom of the early 2000s, waves of companies took a run at the SMB market. Their notion was they could acquire local advertisers with little or no sales outreach. As one high-profile example, Google assumed for several years it could rely on self-service to penetrate the SMB market.

Over time, however, the company realized it had to diversify its approach by building out an extensive partner network of AdWords resellers that had existing SMB relationships. Facebook adopted a similar “go it alone” approach until recently. It too is coming to the conclusion it needs partners with reach into the SMB market.

Despite the challenges and failures of countless local-market startups, many industry observers continue to argue that DIY at scale is just around the corner. The “DIY bears” push back by pointing out that most SMBs lack the time, desire, or expertise to do their own digital marketing effectively. They argue, accordingly, that local sales and service reps are required to educate SMBs and penetrate the local market. This binary debate has persisted for years.

I have subscribed to the latter approach for a long time. Indeed, I’ve frequently used financial management as a model when discussing SMBs and digital marketing, arguing by analogy that most SMBs would prefer to hand off their marketing to a “trusted advisor” and periodically see reports on performance.

But that characterization may no longer be accurate. For a number of reasons, I’m becoming more convinced that technology and SMB inclinations will combine to make some version of effective DIY marketing a possibility for SMBs in the next few years.

First, although the digital marketing services landscape has become increasingly fragmented and complex — an argument against self-service — there appears to be a greater-than-ever appetite for self-service among large numbers of SMBs. This paradoxical situation is a function of SMB distrust of many marketing vendors and a desire for control.

A recent UK-based SMB survey from Bing and agency Latitude White polled 311 SMBs, finding only 18 percent trusted their SEO and PPC agencies. In other words, 82 percent didn’t trust their marketing providers. This kind of suspicion and sentiment may be driving some of the “in-sourcing” of SMB marketing — or at least the desire to do so.

DIY stats

Second, as a technical matter, self-service already appears to be at critical mass. A late 2014 survey of 736 mostly North American SMBs by local SEO firm BrightLocal found nearly two-thirds (64 percent) were handling digital marketing in house. A survey of 1,200 SMBs I developed on behalf of YP a year earlier uncovered similar results. On average, 61 percent said they were in fact managing their own marketing in house across most channels.

Other surveys tell a different story. Data from a 2014 Thrive Analytics poll of 760 SMBs found that on average, SMBs were working with between two and five marketing services providers across multiple channels, notwithstanding the desire to work with fewer providers.

Third, across the industry SMB advertiser churn rates remain high. This is reflective of a number of challenges, chief among them SMB skepticism and frustration with third-party marketing providers.

Fourth, solutions simple enough to make self-service viable are beginning to emerge. Home services marketplace Thumbtack recently told me it had 200,000 local businesses paying for leads and very high retention (there are no monthly recurring fees). Acquisition is all accomplished through online marketing and there are no outside or inside sales reps. The SMBs sign up themselves, through there is some post-acquisition support from an offshore team that helps with onboarding issues.

There are other such examples as well. Programmatic may soon be instrumental in helping SMBs reach the right audiences across platforms with relatively little effort. Cidewalk is an example of a mobile display solution for SMBs that has promise though it’s not quite there. Google’s own AdWords Express is another offering that points toward a more DIY future. And if Facebook, which has been directly and indirectly arguing it’s the only marketing solution that SMBs need, can solve some of its ROI and attribution challenges, it may well see lots of direct, DIY adoption of Facebook Ads. Smaller SMBs are hungry for simplification and for self-service options that avoid agency fees. The point is that technology will ultimately remove at least some of the complexity and fragmentation from the market.

Finally, self-service solutions also may be driven by the costs of maintaining a large sales organization. Rather than the DIY vs. do-it-for-me dichotomy, we’re likely to see an increasingly stratified local market that looks a lot like a three-cabin airplane seating chart. High and middle-spending SMBs will see sales outreach (increasingly on the phone), while the “economy” segment of the market will be prompted to self-serve.

My outlook is these forces, combined with the incentives in the market, will start to generate tools and capabilities that will make self-service real and meaningful for large numbers of SMB marketers within the next three to five years.

Greg SterlingGreg Sterling is VP of strategy and insights for the Local Search Association (LSA). He is also a contributing editor at leading tech blogs Search Engine Land and Marketing Land. Sterling has been conducting research and writing about location-based and small business marketing trends since 2000.