002528.forrester marketing for smbs

8/8/2019 002528.Forrester Marketing for Smbs

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Making Leaders Successul Every Day

Augus 13, 2010 | Upae: Sepembe 7, 2010

Ieaive Makeig PiiiesF SMBsb Sha VaBskik Ieaive Makeig Pessias
http://www.forrester.com/


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2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Inormation is based on best availableresources. Opinions refect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective companies. Topurchase reprints o this document, please [email protected]. For additional inormation, go to www.orrester.com.

F Ieaive Makeig Pessias

ExEcUtIVE SUMMAry

Small and medium-size business (SMB) marketers, much like their enterprise counterparts, nd

that challenges like limited budgets, resources, and customer insight interere with their ability

to successully execute interactive marketing programs. Even so, SMB marketers are growing their

interactive marketing budgets and shiing resources away rom traditional marketing tactics. SMB

marketers should take advantage o the nimbleness o their organizations in order to innovate with

interactive marketing.

tABlE o F contEn tSSMB Mrtrs Tr T Itrtiv Mrti

SMB Makees Fae Famiia chaeges

SMBs Piiize Ieaive tais

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he SMB make a use aa m he Q2 2010

US Ieaive Makeig oie Suve i he

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Fueig the new SMB: Makeig-Sevies-As-

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Api 21, 2010

SMB Makeig tehg Api

Ma 22, 2009

Augus 13, 2010 | Upae: Sepembe 7, 2010

Ieaive Makeig Piiies F SMBsby Sr VBsir

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mailto:[email protected]://www.forrester.com/http://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/http://www.forrester.com/mailto:[email protected]


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2010, Fese reseah, I. repui PhibieAugus 13, 2010 | Upae: Sepembe 7, 2010

Ieaive Makeig Piiies F SMBsF Ieaive Makeig Pessias

2

SMB MaRkeTeRS TuRn To InTeRacTIVe MaRkeTIng

Forrester typically writes or enterprise rms companies with 1,000-plus employees but weve

had an increasing number o requests to investigate the interactive habits o smaller marketers. So

we examined the results rom our Q2 2010 US Interactive Marketing Online Survey to determine

how SMB marketers those at rms with ewer than 200 employees worldwide think about

interactive marketing dierently than enterprise rms (see Figure 1).

Fir 1 SMB A Eepise Fim demgaphis

Source: Forrester Research, Inc.57401

SMBs* Enterprise

Company size

Primary business focus

Industry

Employees

Average 2009 revenue

Average interactive marketing budget

B2B

B2C

B2B and B2C

Retail, wholesale, and consumer goods

Construction, real estate, and engineering

Professional services

Travel, media, entertainment, and leisure

Public services

High-tech products

Financial services

Industrial, chemical, and raw material

Telecommunications, energy, and utilities

Healthcare, biotechnology, and drugs

Other

*Base: 196 interactive marketers working at companies with fewer than 200 employees worldwideBase: 81 interactive marketers working at companies with more than 1,000 employees worldwide

Fewer than 200 More than 1,000

$13.9M $665.5M

$230,000 $47.7M

57%

24%

19%

15%

12%

11%

10%

10%

9%

6%

5%

3%

2%

18%

36%

30%

35%

11%

11%

12%

9%

9%

22%

4%

4%

4%

7%

7%

Source: May 2010 US Interactive Marketing Online Survey


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2010, Fese reseah, I. repui Phibie Augus 13, 2010 | Upae: Sepembe 7, 2010


3

SMB Mrtrs F Fmilir clls

Like their enterprise marketer counterparts, SMB marketers eel that several limitations hinder their

interactive marketing progress. Small and large rms alike grumble about:

Few staf members. Eighty-three percent o SMBs surveyed report that their interactiveteams have ewer than our people.1 Enterprise marketers teams arent as small, but they do

eel similarly understaed; 44% reported ewer than 20 sta members dedicated to interactive

marketing.

Limited budget. SMB marketers are working with inadequate unds 84% report interactivebudgets under $250,000 in 2010.2 O course enterprise marketers have larger budgets $47.7

million on average but they also wish they had more to work with.

Poor customer insight. SMB marketers say that their biggest challenges include: measuringmarketing program results (56%), creating a single view o the customer (52%), using customerinsight to drive marketing decisions (49%), and managing data quality (47%).3 Enterprise

marketers top challenges are similar; they also list measurement and creating a single view o

the customer as top concerns.

Losing customers in the recession. Small and large marketers alike prioritize generating newcustomer sales, increasing brand awareness and overall sales, and generating leads to help

replace customers lost during the economic downturn (see Figure 2). SMBs, though, weigh lead

quality, partnerships, and understanding buyer behavior more heavily than do enterprise rms,

in part because smaller companies have ewer key clients to lose.4

Lacking specialized skills. Regardless o size, marketers need specialized skills to execute wellin dierent interactive marketing tactics. But SMBs cant aord several specialists. Tey can only

hire a small sta o marketers to wear multiple hats, limiting their ability to master mainstay

interactive tools or trial emerging ones.


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4

Fir 2 new cusme Saes tps SMBs Busiess Piiies


SMB*

Enterprise

Which of the following business objectives are the most important when determining

how to invest in interactive marketing?



New customer sales

Brand awareness

Overall sales

Leads

Return customer sales

Cost savings/efficiency

Loyalty

Engagement

Sponsorship/brand association

Brand sentiment

Dont know2%

5%

11%3%

11%7%

11%11%

36%17%

23%

19%

15%25%

17%35%

38%36%

53%36%

37%60%


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5

SMBs Priritiz Itrtiv Ttis

O course, SMB customers are online. So despite the above challenges, SMBs know they must create

relevant, customer-centric interactive marketing programs. Tey do this by prioritizing (see Figure 3

and see Figure 4):

Interactive over traditional tactics. Seventy-seven percent o SMBs surveyed reported their2010 interactive marketing budgets increasing or staying the same as compared with 2009. O

those increasing budgets, 54% said they will decrease budget or traditional marketing tactics

like V, radio, direct mail, and print, in order to und the increases in interactive.5

Display, email, and search. Email remains the mainstay o enterprise and SMBs alike 75% oSMBs currently use or plan to use email marketing, and 16% increased their email budgets rom

2009 to 2010. Natural search is also a staple o the SMB marketer toolbox, with 63% currently

using or planning to use it. Additionally, display media is one o the largest areas that SMBsgrew over the past year, with 19% increasing that budget.

Social media and mobile experiments. Social media is an area o rapid growth or SMBs.Fiy-our percent o SMBs surveyed currently use or plan to use created social media and

another 30% currently use or plan to use paid placement in social media. Social tied with

display media as the areas o largest budget growth in the past year, and 17% plan to increase

their social budget again rom 2010 to 2011. SMBs are also dipping their toes in the water o

mobile marketing 9% o SMBs are currently using it, and an additional 11% plan to use in the

next 12 months. About 8% increased their mobile budgets over the past year, and 10% plan to

increase mobile budgets into 2011.

Specialized vendor partners. SMBs outsource their interactive marketing since they dont haveenough specialized internal sta. For the most part, SMBs select point solutions vendors

that specialize in discrete unctions like local search, small business email, review sites, or

directories although a ew players, like Intuit and HubSpot, oer more complete suites o

interactive marketing tools (see Figure 5).6


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6

Fir 3 Emai Is the Ms Wie Use Ieaive Makeig tai B SMB Fims


26%

29%

38%

38%

47%

37%

58%

46%

55%

57%

64%

65%

72%

76%

70%

77%

82%

83%

80%

85%

95%

10%

9%

11%

14%

10%

21%

5%

21%

13%

17%

10%

12%

9%

9%

17%

11%

7%

6%

11%

8%3%

65%

62%

52%

48%

43%

42%

37%

33%

32%

27%

27%

22%

19%

15%

13%

12%

12%

11%

9%

8%

2%Game marketing

Display media through demand-side platforms

Mobile

Television

Outdoor

Display advertising through exchanges

Paid placement in social media

Radio

Telemarketing

Display advertising through ad networks

Newspapers

Paid search listings

Magazines

Created social media

Yellow pages

Search engine optimization (SEO)

Display advertising directly through publishers

Online classifieds or directory listings

Direct mail

Print

Email marketing(including email for acquisition and retention)

Base: 196 interactive marketers working at companies with fewer than 200 employees worldwide(percentages may not total 100 because of rounding)

Does your company use the following in its US marketing?


Currently using Plan to use in the next 12 months No plans to use


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7

Fir 4 dispa A Sia tp Aeas F Gwh I SMBs Buges


19%

19%

16%

15%

8%

28%

28%

20%

23%

15%Mobile

Search

Email

Social

Display

How does your total US budget in 2010 compare with the 2009 budget

for each of the following tactics?

SMB*

Enterprise

Note: percent who indicate budget increased slightly or budget increased significantlySource: May 2010 US Interactive Marketing Online Survey


Fir 5 A Sapsh o Ve Paes I the SMB Makeig Spae


Category Example providers Services Beneft to SMBs

Directories

Consumer reviewaggregators

Email marketingservice providers

Search/displaysolutions

Online marketingsuite

Yahoo! Local

ValueStar

ThomasNet

Local.com Yelp

Judys Book

Angies List

Citysearch

Constant Contact

VerticalResponse

Clickable

Yodle

Centro

WebVisible

Reply.com

HubSpot

ReachLocal

Intuit

Zoho

Organize and present businessproles, often including adescription, address, phonenumber, and URL for each listing

Aggregate reviews or deals forlocal businesses, often throughsocial and mobile

Provide email marketingtemplates, delivery, andreporting

Support paid search, SEO, mediabuying, or lead generation

Integrate interactive marketingsolutions through a singleplatform or suite

Reasonably priced listings can bepurchased similarly to oineYellow Pages ads

These highly trafcked sitesprovide rich and user-generatedcontent to extend SMB Webvisibility

Simple, inexpensive messagingsolutions that aid customerretention

Ooad online marketing eortsfor SMBs who need expertise ormore sta

Help SMBs manage multipleinteractive initiatives through asingle solution


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8

r E c o M M E n d A t I o n S

SMBS ShouLD LeaD InTeRacTIVe InnoVaTIon

Ahugh imie i sme was b hei size a buge sais, smae makees a

geea e ase ha eepise ms ue ess bueaua a me ie eaiships

wih usmes. Beause his, we hik SMBs ae bee pise ha age ms ivae

wih ieaive s. t his, SMB makees mus:

Tl t lw-i rit. SMB makees shu us s pgams ha equie huge ivesmes high speiaize ski ses, ike sia meia. Su

ueiuiive? Fis , epeimes wih sia meia pia equie ve sma

iemea buge. Makeig a saes sa ae ike aea amiia wih sia ues

ike twie a Faebk beause hei pesa epeiee wih hem. A smae

mpaies e have me pesa ei wih hei usmes ha bigge ms,s ieig hem Faebk wks as a aua eesi eisig eaiships. 7

explit xisti itrl rsrs. SMBs ma eve have eugh buge a a ieaieaive makeig sa a ki. S we emme muipupsig ski ses, ab,

ehg, a e aea empe i he aeas i he gaizai. F eampe,

a usme sevie ep, amiia wih pu imai, mm aske quesis, a

usme ae, u speahea he mpas twie pesee.8 o Web evepes u

hep wih seah egie pimizai b eaig seah egie-ie sie suue a

e. teeHeah Sevies ve a 12.5% pe ae a quai ew eas b epupsig

bie aies as emai ewsees.9

Priritiz tlis tt rt fiis. A eseah su ue b ce,a pvie meia buig aumai swae, u ha 85% meia paig

pessias wa spe me ime saeg bu a beause he heaahes

pgam amiisai.10 t ue his mm we, SMBs shu ives i ehgies

ha seamie pess a fa pgam maageme. F eampe, cikabes

AEgie aumaes pai seah bi pimizai a epig a eius pess i

maage maua.11

utiliz -dmd mpi tmti sltis. o-ema suis ee bves suh as daa Meia, Eiea, a lis ae wh epig SMB makees wih

imie esues beause he e subsipi-base piig mes ha aw makees

es suis wih imie ivesme.12


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9

SuPPLeMenTaL MaTeRIaL

Mtdly

Forrester elded its Q2 2010 US Interactive Marketing Online Survey to 309 interactive marketingproessionals. For quality assurance, panelists are required to provide contact inormation and

answer basic questions about their rms revenue and budgets.

Forrester elded the survey in May 2010. Exact sample sizes are provided in this report on a

question-by-question basis. Panels are not guaranteed to be representative o the population. Unless

otherwise noted, statistical data is intended to be used or descriptive and not inerential purposes.

I youre interested in joining one o Forresters research panels, you may visit us at http://Forrester.

com/Panel.

cmpis Itrviwd Fr Tis Dmt

Centro

ClickFuel

Intuit

Reply.com

TomasNet

Vertis Communications

Yodle

enDnoTeS

1 Source: Q2 2010 US Interactive Marketing Online Survey.


3 Forrester surveyed 224 direct marketers in Q3 2008 about their technology adoption plans. Tis report

drills into the technology adoption trends o our SMB respondents. SMB marketers continue to pursue

improvements to the online customer experience with a high level o adoption o email and Web analytics

technologies. However, moderate to low adoption o marketing automation and data mining technologies

limit SMB marketers abilities to grow the volume and sophistication o their programs. Forrester

recommends that SMB marketers: 1) continue to ocus on online marketing channels; 2) add social media

marketing techniques to their arsenal; and 3) explore on-demand technology solutions to balance limited

budgets with a need or greater customer insight. See the May 22, 2009, SMB Marketing echnology

Adoption report.

4 Te new SMBs are polar opposites o their mom-and-pop predecessors theyre marketing rock stars (or

at least see themselves as such) and they place a high degree o importance on technology to uel their

newound marketing appetites. In many respects, particularly in digital marketing, small companies are

outperorming enterprises. ech vendors are trying out an assortment o technology, service, and channel

models on this burgeoning market. As with any new market, though, the integration o those technologies,

services, and channels is a challenge or users and tech vendors alike. See the April 21, 2010, Fueling Te

New SMB: Marketing-Services-As-Soware report.
http://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=56775&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdf


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10


6 oday interactive marketing is a ragmented discipline in which marketers work with many dierent

vendors to develop and execute marketing programs. But as the number o channels and programs grow,

this situation becomes untenable. odays interactive marketers have ew options as neither enterprise

marketing suites nor interactive specialists address their needs. Forrester believes that the time is right or

the online marketing suite to emerge. Tis suite, underpinned by a central hub, is the eventual destiny or

all online marketing technology and will enable a single view o the customer across channels, provide

process tools to support collaboration, centralize optimization, and support a partner ecosystem. See the

October 17, 2007, Dening Te Online Marketing Suite report.

7 Because o the recession, this year marketers decline their use o brand-oriented display media and are

particularly shy to adopt emerging channels like online video and mobile marketing. Instead, they cling

to direct response specialists email and search and place their bets on social media applications. We

recommend that marketers maintain their branding investments and emulate small rms social media

developments in order to innovate with interactive channels now, when other marketers arent. See the June

4, 2009, Interactive Marketing Channels o Watch In 2009 report.

8 Te Carphone Warehouse (CPW), Europes leading independent retailer o mobile phones and services,

ound that witter oers a new opportunity to truly listen and engage in customer conversations, address

customer complaints and eedback more quickly, and proactively provide inormation to customers, as well

as positively infuence customers opinions. See the January 26, 2010, How Carphone Warehouse Uses

witter And Social Media o ransorm Customer Service report.

9 Source: Reormat, Reuse, Recycle: 5 Strategies o Stretch Your Marketing Content,Marketing Sherpa,

October 21, 2009 (http://www.marketingsherpa.com/article.php?ident=31399).

10 Source: New Study Highlights Need or a Reevaluation o Current Digital Media Processes, Centro pressrelease, June 9, 2010 (http://www.centro.net/news/pr/new-study-highlights-need-or-a-reevaluation-o-

current-digital-media-proce).

11 Source: New Version O Clickables Award-Winning Search Advertising Solution Introduces Sophisticated

Reporting And Custom Metrics, Clickable press release, June 1, 2009 (http://www.clickable.com/corp/

press/2009-06-01.aspx).

12 Forrester surveyed 224 direct marketers in Q3 2008 about their technology adoption plans. Tis report

drills into the technology adoption trends o our SMB respondents. SMB marketers continue to pursue

improvements to the online customer experience with a high level o adoption o email and Web analytics

technologies. However, moderate to low adoption o marketing automation and data mining technologies

limit SMB marketers abilities to grow the volume and sophistication o their programs. Forrester

recommends that SMB marketers: 1) continue to ocus on online marketing channels; 2) add social media

marketing techniques to their arsenal; and 3) explore on-demand technology solutions to balance limited

budgets with a need or greater customer insight. See the May 22, 2009, SMB Marketing echnology

Adoption report.
http://www.forrester.com/go?docid=43678&src=57401pdfhttp://www.forrester.com/go?docid=53721&src=57401pdfhttp://www.forrester.com/go?docid=55956&src=57401pdfhttp://www.forrester.com/go?docid=55956&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=54529&src=57401pdfhttp://www.forrester.com/go?docid=55956&src=57401pdfhttp://www.forrester.com/go?docid=55956&src=57401pdfhttp://www.forrester.com/go?docid=53721&src=57401pdfhttp://www.forrester.com/go?docid=43678&src=57401pdf


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