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Davids Fuel Goliath-Like Growth

The little guy never has it easy. And the small and medium-size businesses –the SMBs — that make up much of the online advertising market are no exception.

SMBs have long been ignored or underserved by both the large Web sites that sell ad space and the large online ad companies that represent advertising networks and sites. The market for small- and medium-size advertisers and publishers was considered too fragmented to warrant major investments in time and technology.

But that attitude is quickly changing. Players in the online advertising market are realizing the major role SMBs will play in the future growth of the market. These SMB advertisers and publishers will be responsible for much of the $33 billion that Forrester Research, Cambridge, MA, predicts will be spent on online advertising by 2004. Companies delivering the technology and services that best serve the needs of this underserved SMB market will benefit most.

By granting SMBs easy, flexible and efficient access to the same marketing opportunities now enjoyed by their largest advertising and publishing counterparts, online advertising firms are helping “democratize” the market. SMB advertisers can reach their target audiences. SMB publishers have access to the billions being spent on online advertising. Everyone has an equal opportunity to flourish.

Anyone who doubts the importance of identifying and addressing the specific needs of the SMB market should consider these facts:

• According to Forrester Research, 3 million Web sites/publishers (those not included in the top 100) account for 60 percent of all ad impressions.

• These 3 million Web sites serve highly focused and, therefore, highly sought-after communities.

Of all available ad inventories, 3.75 percent go unsold; simultaneously providing smaller publishers with effective ways to sell these inventories and smaller advertisers with efficient access to those inventories could greatly reduce that percentage.

The smaller the company, the less room it has for error when selecting an online advertising service. SMB publishers and advertisers want to reap the benefits of convenience, efficiency and flexibility — but they must be selective and focused with their limited marketing budgets. Put simply, SMBs often have to be smarter than the top advertisers and publishers.

For companies offering online advertising products and services, identifying the needs of SMB publishers and advertisers is the first step toward effectively addressing them.

Access: SMBs want easy and efficient access to the online advertising market. While SMB advertisers are clamoring for access to Web sites of every size, SMB publishers want access to every size of advertiser. Online advertising companies that provide the services and technology to help these publishers and advertisers gain access to this huge market opportunity will be well-positioned to meet the needs of SMBs.

Cost-effectiveness: The desire for cost-effective advertising is particularly strong for SMBs, mainly because they lack the marketing budgets of their top 100 peers: While larger-size advertisers have the luxury of experimenting with online advertising dollars, smaller advertisers have less room for error. Likewise, smaller publishers are looking for more cost-effective channels to provide access to their online inventory.

Targeted advertising: SMBs cater to a vertical, focused audience so they require targeted advertising. To make the most of their limited marketing dollars, they may need to target their advertising by demographic or behavioral characteristics. And because many have a local focus, they also need online advertising that can be targeted geographically.

Self-service: An effective online self-service model allows SMB advertisers or their ad agencies to execute, analyze and optimize online campaigns in real time. Similarly, SMB publishers want a single technology platform where they merchandise, sell and measure online campaigns — also in real time.

Flexibility: SMBs cannot afford to waste marketing funds on guesswork — but they can’t afford to wait for results either. Both SMB buyers and sellers require an online advertising service flexible enough to allow for fast and frequent online changes in banner ad creative, categories or sites. They also need access to immediate results that measure ad performance by cost per thousand, cost per click or cost per action/acquisition.

Multiple media types: SMBs need access to online advertising solutions that provide support for multiple media types, including banner advertising and e-mail. Furthermore, they require the ability to optimize multiple online advertising campaigns running across different media types. Moving money from one campaign to another must be seamless and fast.

Ease-of-use: Even though most SMBs have small staffs and even smaller information technology departments, they still want to retain control over the buying or selling of their online advertising. They’ll choose an online advertising platform that is easy to use and maintain.

Buying options: SMBs want the freedom of accessing the online advertising market in the way that works best for their specific needs. Some want to buy or sell advertising in person. Others want to access the advertising marketplace via a self-service model. SMBs want the option to buy or sell advertising from an entire network, from online communities where they participate, or through an online marketplace or exchange.

Control: SMBs are no different than their larger competitors in their desire for control over their own marketing destinies. SMB advertisers are looking for an online advertising platform that allows them or their ad agencies to take the reins of their online marketing initiatives. In addition, SMB publishers are looking for a platform and solution that provides them with greater control over their advertising inventories.

The online advertising firms that can best meet the specific needs of SMBs — while continuing to serve those of the top advertisers and publishers — stand to gain the most from this market segment’s rapid growth.

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