Local Business Owners Face More Marketing Choices

Bringing your local business online - Part 1: Why?

Excerpted from June 1, 2009 Omaha Internet Examiner by Leslie Clark

The local search space has undergone a dramatic transformation in the past few years as consumers have moved online to find everything from a plumber to a new home. As stated in a SBI+M post, 54% of Americans have substituted the internet and local search for phone books.

I know many local based, brick-and-mortar businesses that are well aware of the fact that they need to move their marketing efforts online - but don't know where to start. Back in the day, you worked with sales and account representatives for buying media and producing new creative for your yellow page, radio, newspaper, direct mail, and (if you were lucky) TV ads.

Now we are in age where social media such as Facebook, Twitter, MySpace, and LinkedIn rule. Tangles of confusing suggestions on how to use AdWords, Yahoo! Search Marketing, and adCenter choke forums, blogs, and marketing sites. Online webinars and podcasts give detailed information on how to get useful data and metrics from Google Analytics accounts.

First, you are not alone. Many SMB owners and marketers are not only confused, but very hesitant of putting dollars into a marketing channel they know nothing about. Second, you don't have to do everything. Third, you don't have to do it all at once.

So where do I start? The answer is easy, it is the core of your web presence, your first impression to your potential customers - your website. Not as simple as it sounds, and that is why we are going to cover the website creation process in-depth in my next article - Part 2: The core of your online presence.

My Take

Good summary of the challenges facing small, local business owners as they face confusing new advertising choices.

The stats Clark cites are powerful and indisputable. It is revealing that advertising publishing firms, now in bankruptcy, may still be in denial of their desparate situation.

Consumers are changing the tools they use. Local businesses - and the advertising media that dominated for the past 5 decades - need to adapt.

The ultimate form of advertising may be near - recurring word-of-mouth referrals powered by new, Web based tools. When local businesses can tap their customers' loyalty through social media there will be no turning back.

Looking forward to Part 2.

Changing Consumers, Changing Advertising

Consumers Have Changed, So Should Advertisers

Excerpted from June 4, 2009 ClickZ article by Augustine Fou

Are you still broadcasting your ads to the "haystack" and praying that the "needle" saw your ad? Advertising has always been like sending a message to a haystack and hoping there were enough "needles" in the haystack (i.e. target customers) who would see the ad, recall it, and then go make purchases. That used to work, but these days the needles are getting harder to find, they tend to block out all advertising, and they have built up new expectations and irreversible habits. These expectations and habits have a dramatic impact on how they receive, react to, and act upon advertising.

Consumers Seek Trusted Sources for Information

When modern consumers go online to look for information, there's sometimes too much information and it is hard to tell what's official or even true.

Savvy consumers look for clues from others. The information that they rely on tends to be from peers, or at least others like them (i.e. total strangers who wrote reviews on an item they are considering buying), instead of the information in ads put out by advertisers. They trust claims made in ads less and less. They trust the reviews, comments, and recommendations from other users more and more.

Consumers Prefer Collaboration Over Isolation

Finally, today's consumers expect to get help from friends or others like them. They will ask which restaurant, digital camera, or even wedding dress their friends recommend and why. They will look for clues about what other users find useful. Usually if readers are engaged and vocal in their commenting, others get a sense of the quality and value of the post. This way, they have immediate feedback on whether they need to even spend any time reading the post.

Consumers also expect to share information. Their friends know them best and they also know what they are looking for or are in the market for. Consumers will share items and recommendations with friends because they know their friend will appreciate help and insights and they expect the same in return. And this is real advice from real people, not an ad from someone trying to sell you something.

My Take

My take is focused on two points that Dr. Fou makes regarding consumer trust and collaboration. Please see the entire article to read his recommendations.

The tools available for getting and sharing information are always changing. Yet people are still people - they always have and always will find a way to get the most value and to do business with the most trustworthy business.

Consumers and businesses who stay current with new tools will enjoy a marginal advantage. However, for business owners, social media is no substitute for quality. In fact just the opposite is true - through social media poor quality will be exposed and broadcast.

Paying attention to new media is important - but providing great service is paramount. It is the best advertising.

"Social" Gains Ground in Media Mix During - and After Recession

"Pricing, WOM, PR Efforts Get Recession Boost"

Excerpted from MarketingVOX article June 1, 2009

Two-thirds of marketers have shifted emphasis to more short-term strategies - such as pricing deals - in the last six months in response to difficult economic conditions, according to a study from the ANA (Association of National Advertisers) and 'mktg.'

The research found that relatively few respondents reported any marketing initiatives had been shelved or delayed, but many are being reduced.

The activities most likely to be increased in the current economic environment are pricing deals (47%), social networking and word-of-mouth activities (26%) and public relations (23%):

Renewed Activities Post-Recession

The study also found that, despite recession cutbacks and tactical strategies, marketers are planning for renewed activities when the recession ends and the recovery begins. For example, media budgets will be increased (68%) along with social networking/word-of-mouth (41%) and budgets for innovation and testing/learning (40%). Nearly three-fourths (73%) of respondents say they will ideally implement these increased marketing activities three to six months before the recession ends, and an additional 16% will implement as soon as it ends.

Shift in Media-Channel Effectiveness

The study also found that media channel effectiveness for building brand equity has shifted materially. While TV is still ranked highest in importance (64%), online (61%) and guerilla/word of mouth/buzz marketing (57%) have grown to be on par with TV, with social media being ranked as the next highest effective media channel (40%). Social media ranked highest as the media channel that marketers would like to use but have not yet been able to implement.

About the survey: This survey was conducted online in April 2009 among the members of the ANA Brand Marketer Leadership Community panel. A total of 129 client-side marketing executives responded to the survey.

My Take

Consumer acceptance of social media is growing rapidly. It's being spread virally through all demographics - particularly among consumers over 30.

Major advertisers recognize this and are planning to aim more and more advertising dollars into this medium.

Unlike the "message clutter' caused by broadcast and mass media ads, consumers will be in control of what social ad messages they see by the sites they choose to use. This will create an interesting competition among advertisers to create more creative messages which will encourage viral transmission.

Currently, those businesses hold the "high ground" who are already benefiting from real word-of-mouth advertising. If they adopt social media as part of their marketing strategy, they can maintain their competitive positions vs.national brands.

The time for local businesses to act is now to maintain their advantage. They can begin developing new habits which engage neighbors and customers in social media, leveraging their established relationships to grow high-quality, word-of-mouth referrals - and profits.

Facebook Bucks - "My Take"

Facebook brings in payment system

Excerpted from David Gelles Financial Times article - Published: June 2 2009

Facebook is rolling out a new internal payments system, testing it on three different applications on the site, a move that could help the social networking giant become less reliant on advertising. The system will allow users to purchase Facebook "credits" to buy virtual goods across the social network's services and third party applications. Facebook will take a cut of every transaction.

Gartner analyst Ray Valdes says. "Social networking sites have suffered with monetizing [their services], but this leverages [the fact that] users are there on Facebook."

My Take

This is an important step advancing the ease and convenience of the coming social economy. In a short while, conducting social commerce transactions will be more commonplace than swiping your debit/credit card at an ATM or a retail checkout machine.

Social Media's Advertising Revolution

How Facebook Will Upend Advertising

With social networks like Facebook transforming the way companies communicate with consumers, it's time for the ad industry to get its head out of the sand

Excerpted from 5/27/09 BusinessWeek article by Jonathan L. Yarmis

The guessing games over Facebook's worth are back on again. They were reignited by the news on May 26 that Facebook has accepted a $200 million investment that values the company at $10 billion.

Much of the discussion centers on the ability, or lack thereof, of Facebook and other social networks to sell advertising and deliver advertising results.

But that argument misses the point. The question isn't how advertising will work on Facebook but rather how Facebook and social networks like News Corp.'s (NWS) MySpace are changing advertising.

The Holy Grail of ads: word of mouth

...We're on the verge of a major rethinking of advertising's fundamental premises. One of the biggest challenges facing advertisers is ad credibility.

...Word of mouth—peer opinion—has consistently been rated the most credible source of information. But traditionally there's been a limit as to how widely you could distribute a friend's point of view.

Credibility now has a channel for mass distribution. It's called the Web and it particularly thrives in social networks. Such distribution will have profound implications for how we "advertise."

...Social tools woven into various sites can deliver the opinions and reviews of a group—"people like me"—whose views may be just as credible as those of my friends.

In sum, social networks and related tools are transforming the way companies communicate with consumers and potential consumers in profoundly interesting ways.

Now it's up to the advertising industry to get its collective head out of the sand and exploit this transformation to its advantage.

Jonathan Yarmis is founder and principal analyst with the Yarmis Group, an independent analyst group.

My Take

Advertisers will look back wondering why it took so long to see the obvious - instead of hindering their prospective customers' Web experience with annoying ads, they should use social Web tools to derive actual value from the ads' results.

The Search for Local Search

How to Solve Local Search, Once And For All
by Matt Greitzer, Friday, May 22, 2009, 10:46 AM

Excerpted:
There is no way to find a good plumber or electrician in New York City. I can find a plumber, any plumber, no problem. My Google query for "New York City Plumbers," for example, returned 14,700,000 results. (How is that even possible)? But finding a good plumber, one who will show up on time and provide an estimate with fewer than five digits, can't be done.

This is where I thought I would start writing about Facebook, and the opportunity has to corner the local search and services market. No one out there is doing this well -- not the major engines, not the IYPs, not even the new(er) social search and recommendation engines like FacebookYelp.

The problem with local search is not in getting accurate listings, that's easy. The challenge is in getting relevant reviews on those listings. In order to do this, you need two key ingredients.

The first is scale, as in a massive, active user base willing to inform objective business listing with subjective opinions.
The second is relevance, as in some way to ensure the reviews you are reading are not written by shills, angry ex-lovers, or crazy people.

Facebook can address both of these challenges: It has a massive user base, and it's networked, which provides all kinds of useful ways to vet the trustworthiness of a reviewer's opinion. If Facebook jumped into the local search space I believe they could corner the market. But I think Yelp has actually beaten them to it.

I was going to put Yelp in my original column as an also-ran. My original thoughts were that Yelp did not have the scale to capture this opportunity. It was in digging around on Yelp looking for examples to prove my point that I realized I'd misjudged it. Yelp does have scale. Though not nearly that of Facebook, Yelp has almost 8 million monthly unique users (according to comScore), and has doubled its user base over the last year.

Facebook should not build its own socially powered local search engine; it should just buy Yelp. This combination makes both companies better. It would instantly propel Facebook into the local search space with the backing of an active reviewer base and a proven service model. And Facebook's scale would rocket Yelp from niche to mainstream, making a good service even better by combining reviewer opinions with vetting via the social graph.

My Take

This article addresses the exact problem that led us to design YouGottaCall.

In researching our patent, it amazed us that no one had tapped into the actual value of local word-of-mouth referrals through a Web-based social network.

Our revenue model is quite different than Yelp's or Facebook's - it allows consumers to find and share the businesses trusted by their neighbors and friends. Businesses voluntarily reward their social network for referrals that result in new customers. The members' favorite charities benefit!

It is working well in our test market -I'll be glad to keep you posted on our Facebook integration and e-commerce back-end development.

One parting question - if you combine two social networks - neither of which have an intrinsic revenue model - guess what you're still missing. An intrinsic revenue model.

HBJ: Social Network Primer

Social Networks For Your Business

by Rhonda Abrams as published in the Hartford Business Journal 5/25/2009

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Excerpt:
In the last few years, an avalanche of new opportunities has cascaded on the Internet in the form of social networking sites. Advantages and limitations of social networking sites:

Advantages:

• Connect with lots of new people, just as with real-life networking.

• Get the word out without an intermediary, such as a pesky reporter or columnist!

• Establish yourself as an expert in a field.

• Stay on top of your field and your competitors.

• Connect with your own customers.

Limitations:

• Can consume a huge amount of time.

• Most connections will never convert to paying clients or customers.

• A zillion of your competitors are out there.

Managing your social networking visibility can be a full-time job — in fact, many companies employ people just to be doing that. But you have a business to run.

So here’s Rhonda’s guide to social networking sites as they relate to your small business.

Twitter: Twitter’s the Internet darling of the moment, allowing users to send very short messages (limited to 140 characters) known as “tweets.” For example, you could choose to “follow” me by searching for Rhonda Abrams. (Twitter doesn’t allow spaces so my Twitter name is RhondaAbrams). I “tweet” about things I think small-business owners would find interesting or sometimes amusing.

LinkedIn: Unlike all the other major social networking sites, LinkedIn is dedicated to helping people connect for business rather than social purposes. It’s also become a major source for posting professional job openings.

Facebook: The heavyweight of social networking in the U.S., Facebook is great for keeping in touch with people you care about and finding people you’re out of touch with.

MySpace: Once the leading social networking site, it’s still a huge draw, especially for teenagers.

YouTube: This site is all about videos, so you may think it has nothing to do with business. But businesses have discovered it’s a great way to provide information to prospects and customers. Why not take some video of the products you sell or of you describing your services (or video testimonials) and easily upload them to YouTube? Then, you can direct prospects to YouTube to check it out.

One thing’s for sure: social networking is here to stay. Most businesses will need to know how to use it.

Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”

My Take

In her full article, Rhonda points out there is an overwhelming amount of sites to keep up with. This "avalanche" has busy business owners saying, "My time is too valuable to chase these sites. Why should I even try?"

My answer to this is, "Because it's the only way to grow. You're facing a technology revolution tax - not levied by a government, but by a rapidly spreading change in the way your customers communicate."

"Right now you're building a new bridge to connect with customers in a whole new, better way. But meanwhile you're maintaining your old bridge with your traditional advertising. So you're paying double - for a while at least.

The added expense in time & money will be a strain on you. But the dividends will come - especially for those businesses who "get it" and are adept at melding social media into their ad mix.