One Size Does Not Fit All in the SMB Digital Market
In this regular Street Fight feature, local marketing gurus David Mihm and Mike Blumenthal kick around some of the biggest ideas affecting the local search ecosystem and the broader industry. Send us an email or leave a comment if you have specific topics that you’d like them to touch on in future columns!
Mike: You are in Central Time Zone and I am in Pacific… a real role reversal this week. But we did manage to find a good time to meet. We can wave as our planes pass.
David: Yep, for once I got to sleep in and you had to wake up early. I’ve gotten to visit four vibrant cities of varying size in the last week — St. Paul, Minneapolis, Madison, and New Orleans. In my limited time on the ground, the small business community has appeared very strong in each.
Mike: My sense of the small business world is that they are thriving in urban areas and failing miserably as city/market size declines below about 50,000 population. With Walmart and KMart being the mainstays in cities like those, various market forces are taking a bigger toll.
David: Couldn’t agree more. It was equally striking to visit Wisconsin Rapids, a town of about 15,000 in Central Wisconsin, and see hardly any businesses beyond national chain restaurants like Applebee’s and Jimmy John’s, and the stereotypical presence of Walmart. The JCPenney department store had a large “Store Closing” banner hanging in front of its name, and I had to think that the Sears outlet would not be far behind.
Mike: I live in one of those less than 50,000 population markets. We lost Sears years ago and the mall which destroyed the downtown is now on life support. I am always struck when I come to the “big city” that the independent restaurants are busy and crowded 7 days a week. Our market used to have an incredibly vibrant restaurant scene but as you note, now largely replaced with franchises. It’s a big deal when a Tim Horton’s opens up.
David: I’ll admit to living in a “big city” bubble of sorts, but I frequently visit rural Central Oregon or the Oregon Coast for long weekends and such. The difference is that tourist dollars seem to have in large part kept small businesses a large part of the fabric of rural Oregon, which made my visit to Wisconsin Rapids such a wake-up call.
Without out-of-towners staying a few nights, or even just passing through, it has to be incredibly challenging to operate a successful small business in markets like this, and I’m even more in impressed by small business owners who thrive in these markets than before.
Mike: You may be a sample size of one but I see very much the same thing, day in and day out.
How do you think this rural economic decline impacts the value proposition of digital marketing for these businesses? Is it fundamentally different than those of an urban business?
David: It absolutely does. I was struck by the value of Outdoor Advertising, of all things, in Wisconsin Rapids. When your entire customer base drives the same stretch of road to-and-from Walmart, that billboard is a guaranteed weekly impression for the advertiser to their entire market. I got the sense that most area residents probably “discovered” local businesses simply by driving past them, and that if a new place did open up, they’d hear about it from a friend who lived nearby.
But it also struck me that conversion rate optimization and consistent digital brand advertising to stay top-of-mind would be just as important for a rural small-businesses as an urban one–particularly for the ones that can’t afford a billboard on Main Street.
Mike: Most locals either “just know” or use word of mouth but many businesses need to expand their radius of service to survive and it’s amazing that the next community over will have no clue about a given business. And what happens in most communities, with the decline of local news and the limited reach of radio, is that there is NO single advertising medium that has the reach and is cost effective.
David: Right. And although Facebook, Twitter, Instagram, and Pinterest are all quite well-positioned to help the small business reach customers in the next town over (unsurprisingly, rural mobile phone usage seemed equally ubiquitous as urban), their ad products frequently try to steer the advertiser into broader-match, less-targeted geographic and demographic markets where their ad dollars will just not stretch as far.
I’ve yelled at the Twitter ad product in particular for telling me my audience size was not large enough too many times to count. Arbitrary audience minimums that may make sense in larger metro areas make no sense at all for rural businesses.
Mike: Google, with their narrowing of the local search radius, makes SEO that much less valuable for sure for a business that needs to serve a 50 mile radius to survive. These businesses don’t care about “Pigeon” but they do care about finding customers over a greater radius and that is hard. I guess like everyone else, they will need to pay Google for the privilege.
David: To be fair to Google, while it didn’t necessarily show businesses in the next town over by default, its radius of relevant businesses did incorporate the entire town for just about every search I did. Which seemed wider than what I typically get in Portland. But you’re right that a 50-mile radius is closer to what rural businesses need, not a 5-mile one.
Mike: The radius is wider if there is no local business in the category but often Google will show a Local One Box instead of a 3 pack and exclude next-town-over businesses.
David: Well, that kind of product design of the SERP squares well with my prediction that there will fewer businesses who will benefit from organic visibility than they do today, and that the businesses left out will have no choice but to pay Google for the privilege, as you said.
Mike: And when they’re willing to pay Google for the privilege, many of these businesses fall prey to the overpriced, poorly-designed Adwords campaigns from the likes of the cable companies.
One small garden supply company I interact with was looking for market exposure in the next town over and was paying the cable company $700 per month for Adwords. They thought their Adwords campaign was working because it delivered web visits. It turned out that it was costing them $80 per consumer action. When they found out, they tried to exit the contract but couldn’t because of exorbitant cancellation costs.
To some extent, the new targeting capability in Adwords Express does address this need. It would have cost a sliver of the cost of the Adwords campaign for similar results.
David: From a vendor standpoint, what this trip has emphasized for me more than anything else is the importance of knowing your customer, and understanding your customer’s market reality. Especially if you are a Silicon Valley vendor selling into local businesses, at the very least you have to recognize your day-to-day experiences both discovering and interacting with small businesses are wildly different from customers in rural markets.
StreetFight has done a study of “Urban Small Businesses,” which are surely the most natural targets for digital products across the board, but count me in as an eager reader of a future study of Rural Small Businesses.
Mike: Yelp certainly makes this mistake all the time of selling a “big city” package to a rural business. One size DOES NOT fit all. And, like the Adwords tale for the garden supply company, this practice sours these businesses on the very tools that could help them cover larger expanses of their surrounding areas.
David: Absolutely. Your product or service simply may not work for these businesses, and trying to force that square peg into a round hole wastes their money and increases your churn rate.
Mike: Companies need to scale their product to these unique needs. As it stands Facebook hasn’t quite nailed it and it seems that Adwords Express is probably the best current product fit. For me the question, as always with Google, is whether they will take the time and energy to see it through to uptake.
After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company GetListed.org to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University.