Smart Business, Smart Marketing: How the Internet is Propelling Small Business Forward

This guest post is from Erik Gaandt, a freelance tech writer with extensive experience in website marketing

Marketing is one area where small businesses have experienced dramatic benefits due to the Internet, even in comparison to other operations. Although social media often comes up as the most popular and perhaps most prominent example of how Internet is used to benefit small business marketing, it is not the only one. Small businesses reap a number of benefits from Internet-based marketing through a number of methods, often much better suited to doing so than their bigger counterparts.

Advantages of Small Businesses in Online Marketing

 Here are some of the advantages that online marketing offers to small businesses:

Small businesses often specialize in niches of larger markets.

The problem with businesses entrenched in niches is that their products tend to cater to a specific clientele and cannot compete against competitors on an even basis outside of that clientele. As a result, small businesses specializing in niches are more dependent on their clientele to a larger degree than larger businesses.

To survive and perhaps even prosper, such businesses must be able to find and then hold onto customers who are interested in their products. The Internet and Internet-based marketing campaigns can help out such businesses because of their expanded reach compared to traditional mediums. Small businesses can reach out with minimal cost to potential customers at the places that those customers frequent, while those customers can in turn reach those small businesses through search engines and other online services directing them to relevant sites.

Feedback is vital to the success of a business’s marketing efforts in the long run.

Individual marketing campaigns can have enormous impacts on a business’s success, but the data distilled from those campaigns can help the same business refine its practices over time to improve its overall marketing. The problem is that such data are not available without the business spending to collect and compile data into an usable form. Small businesses tend to be disadvantaged in this regard because of a lack of both cash and expertise. However, collecting data from online marketing data is much easier due to tools and services, such as Google Webmaster Tools. Even small businesses can use the provided data to examine both the success of individual marketing initiatives and the flaws that prompted potential customers to turn aside.

Responsiveness is one of the most important qualities in online marketing.

Small businesses can outperform their counterparts on this point because of their closeness to the customers and their more nimble structures. For example, a corporation with multiple offices might choose to base its marketing efforts in one location, resulting in potential problems marketing in other regions due to lack of understanding. Furthermore, it is more difficult for bigger businesses to change directions once their resources have been invested. In contrast, the small business can react faster to changing circumstances and its personnel are closer to the ground, resulting in more responsive and relevant online marketing campaigns.


In short, the Internet is something of an equalizer for businesses. It has eased some of the difficulties that made it hard for smaller businesses to compete head-on against their bigger counterparts. Furthermore, the Internet’s accessible nature ensures that these advantages are available to all who are interested and can invest the time needed to learn its intricacies.

 Erik Gaandt, freelance tech writer in web marketing, enjoys sharing his insights on various marketing blogs. is home to hundreds of reviews on the most popular webhosts.

Big Data will Change Advertising Forever

bigdataI had several meetings today with friends from “traditional digital agencies”. [Aside] That sounds so oxymoronic! The reality is that this new course of big data, gleaned from a wealth of unstructured information on the web, has the ability to turn advertising on its head–– at least enough to make media people rethink algorithms for maximizing performance.

Coming from the ad world, I have seen the banner ad rise and fall in a span of 7 years. The value of search marketing (PPC) has had its heyday and now even some of the search pundits are realizing an eventual downturn. Consider this quote from Adam Torkildson, one of the top SEO Consultants in the country who was quoted in this Forbes Article, “The Death Of SEO: The Rise of Social, PR, And Real Content” who said,

“Google is in the process of making the SEO industry obsolete, SEO will be dead in 2 years.”

A large part of this statement lies in the the fact that expectations of consumers have changed. In advertising. In content. In brand engagement. Social content is what largely makes up Google’s search algorithm: relevance, recency. What this entails? Shares, comments and reviews.

I would argue that another factor will unseed Paid Search as providing a more relevant prospect framework: social data insights.

The Traditional Ad Model: User profiles

Think back. Acquisition targeting parameters were dictated by marketers. Marketers did the consumer research, mainly expensive focus group testing with questions that largely served to benefit the “business”, structured and moderated by the “business” and highly subject to group-think. To top it off, this “focus” group would provide the basis of “representation” of the target customer, so the results of the research were leveraged to inform the targeting strategy. So… my point: the research conducted was subject to false assumptions, questionable methodology and a strong reliance on the outcomes.

Now, these outcomes provided the demographic profile of the target customer, which was fed into the media buy. User profiles dictated where, when and the type of offer or content was served. At that time there were mediocre optimization opportunities.

The More Sophisticated Ad Model: Behavioural targeting

I was fortunate enough to work for Hunter Madsen, the Yahoo! guru who led the team that developed Behavioural Targeting for our company back in early-to-mid 2005. We were in awe as Hunter explained the mechanics of targeting users within the network, based on where they’d been, what content they consumed, what they searched for… also taking into consideration their geography, demographics and alignment with the target profile. Aileen Hernandez Halpenny, a friend who heads up Rocket Fuel in Canada, reminded me of the “smart ads” — the dynamic ad units that would be served up to you based on geography, profile, search propensity etc. These were seemingly intuitive ads that knew the right offer for you at the right time. Simply put, “Optimize each ad for each user — right down to hyper-targeted local offers — so that you can drive your objectives, from awareness to conversion.”

Now, combine that with ad retargeting that cookies a user and serves up a similar ad when they show up elsewhere in the network. Now we’re talking relevance. No longer do we have to rely on latent conversion and assume that an ad I saw 10 days ago contributed to my online purchase of that same product. Retargeting takes out that guesswork.

The Future Ad Model: Enter Social Data

Now imagine if you had the best of both worlds: behavioural data AND conversation data. Case in point: So Mary Brown searches for information about a future trip to Halifax, NS. She also goes to travel sites, reads hotel reviews and has excitedly spoken to close friends on Twitter and Facebook about her plans and preparations. Now we have not only recent behavioural activity where she’s been on the internet, but we also are aware of her conversations that validate her behaviour. It is safe to assume that Mary will “definitely” be going to Halifax. Imagine what this information does for a travel company? They now have MORE information on that user that will allow them to not only serve an ad, or respond to that user with relevant offers, but DO so with a certain degree of confidence that Mary, will, at the very least click on the ad.

What excites me about social data is that it does the job of the marketer, for the marketer. No longer do we have to guess about “who” is right for our product. The conversation data alone is enough to verify the right target audience. But, coupled with recent/past web behaviour, the two variables will increase response lift significantly.

Caution: this may be a game changer but the way the advertiser needs to treat the user must also change. Ads, for the most part, have becomes irrelevant. Even Facebook is realizing that low Click-throughs (CTRs) on sponsored stories is not enough to drive conversion. They are now relying on “impression-based” ads ie “I saw the ad” vs. “I clicked on the ad” to determine whether this can be attribution factor with conversion.

How do traditional media people feel about this? An ad ops person put it this way: “Conversation data may yield us potentially top 20 people who have a higher propensity to buy. Is this enough? The client wants more volume.”
…to which I responded,

“Social data allows you to target to very niche groups — the tighter the targeting the better. After all would you rather have a much higher response rate, spending less on advertising, targeting a more finite group than doing a blanket campaign across a larger volume with a standard .15% CTR? ”

The value of social data is the amplification value and allowing social strategies for outreach to augment the ad performance. This results in BOTH a higher response rate as well as word-of-mouth effects. It also allows the marketer to spend more wisely and opens the door to developing sustaining relationships with the consumer.

…. after all, why should our work as marketers get any harder!

The Promise of Big Data: The Evil Twin

dr evilThis post is a follow-up from my previous article, The Promise of Big Data: For Good.

As a database marketer, I relished in the richness of information that data gave me. Unlike traditional advertising which, to me, had no real basis for tracking or performance optimization, I took comfort in knowing that I had data to validate decisions.

The world today has emerged into data ubiquity and it is generating immense excitement among data scientists about the ever-growing strength of predictability. This is the essence of Big Data. According to Wikipedia,

Big data is a term applied to data sets whose size is beyond the ability of commonly used software tools to capture, manage, and process the data within a tolerable elapsed time. Big data sizes are a constantly moving target currently ranging from a few dozen terabytes to many petabytes of data in a single data set.

This wealth of information now provides an avenue that allows ever-complex data sets to be analyzed like never before. This can include where people are more likely to live in the next 20 years based on population, migration patterns, geographical economics etc. Or, it can include the likelihood of people drinking less coffee in the southern states of the U.S. in the next 10 years.

Amazing stuff! The probabilities to affect change in a positive way are absolutely boundless. Now organizations are relying more on data to drive critical organizational decisions. On the same note, there is an equal and opposite reaction to Big Data.

I have introduced the endless possibilities of a world that benefits from Big Data. However, there are personal and cultural consequences to the use of Big Data to serve the greater good. Data can lead to a loss of privacy. Face it, you are going to be asked to opt-in to sharing your data more often. Privacy as a hot topic is bringing issues of disclosure and data usage front and centre. Customers are becoming more and more aware and alarmed by how their data is being used. Consider two recent events in the news:

1. Job Seekers are being asked for Facebook Passwords

Laurie Dillon Schalk brought this article to my attention through Twitter. This was shocking to me. Imagine: you are going in for your dream job and you are asked, as part of the interview process, to divulge your Facebook information so the potential employers could peek into your profile. How would you react? This goes beyond privacy. Laurie tweeted to me,

Completely unacceptable to ask candidates 4 FB passwords. Violation of the worse kind. I don’t know how & if widespread.

This has gone beyond a standard security check. The wealth of data on every individual now gives employers more information at their disposal. Think of it: the more information you create, the more fodder you are feeding to this data well. The long term implications: you as a user will be less transparent in your posts–more guarded about what you share. Will big data encourage the antithesis of social media?

2. How Companies Learn Your Secrets

This is the story of how “Target was able to use their predictive analytics to determine a customer was pregnant. They had mailed her some promotional material, much to the surprise of her father, who made the discovery. According to this article: “Most of the people I spoke with here agreed that Target made a mistake in that case, but they believed the error wasn’t in collecting the data and then using it for marketing so much as doing so without permission.”

It’s one thing to use data to analyze and predict competitive pricing like Walmart’s Rollback Price model, however, organizations are just starting to see the “massive amounts of data to predict everything from what their customers are going to start buying to which of their employees will complete a certain project on time.” Data is also increasingly easy to collect and store, ripe for analysts to sink their teeth into.

The Government has a lot to gain from the information we feed them.

And maybe the Enemy of the State is humanity’s eventuality. We are already seeing instances of it today right here in Canada:

Canada’s “tabled” web surveillance legislation seeks to “monitor and preserve the Internet surfing activities of internet customers” in an attempt to prevent electronic criminal communications. This will further suppress or elicit more guarded online and mobile usage.

Michael Geist, Law Professor at University of Ottawa, and esteemed critic in Internet law states, “One thing (the government) has never provided is the evidence to show how the current set of laws has stymied investigations or created a significant barrier to ensure that we’re safe in Canada.”

It’s clear that we may not be able to stop he growth of big data and its evolution. That would mean we would have to change our practices: limit our usage of internet, mobile, and social networks. By virtue of using these technologies we are putting bits of our information into servers about what we’re doing, where and when. The power of this information presents amazing possibilities. But along the way, as consumers, we must become cognizant of its impact to our personal information, more importantly information that we prefer to keep private.

I’d be interested to hear what you think. What’s your impression of Big Data? The Big Brother of tomorrow or the purveyor of a better society?

F-Commerce: The Market Destination or Social Futility?

I was fortunate to speak at the AllFacebook Conference in San Francisco on June 28th. The event comprised of Facebook specialists and practitioners, who provided some pretty cool insight for marketers on how to effectively navigate through the increasingly complex world of Facebook in developing successful strategies.

My topic questioned Facebook’s development of a social commerce layer i.e. the ability to sell goods and services within Facebook. Is this a futile attempt or a sustainable feat?

The biggest question for many people who have seen Facebook evolve:

Can you develop a marketplace in a place where, inherently, people are not in a buying mindset?

Social networks existed to escape the very sites that have inundated them with advertising. They have become the safe haven of pure conversation. However, in order to sustain them, strategies for monetization have been essential, especially given the explosive funding opportunities in the social tech space.

Given its recent IPO, Facebook must prove to shareholders that it’s serious in its attempt to monetize the platform. While Zuckerberg has vowed to put the user experience first, the pressure to create a sustainable business model has been even more pressing.

E-Commerce is poised for explosive growth. Online sales are expected to rise by over $100 billion from 2010 to 2015. Social media has been a strong catalyst through discussion and online recommendations and will continue to fuel this growth over the next few years. Facebook is primed to lead to make this happen. Even some of the experts contend,“ F-Commerce transactions will exceed Amazon’s annual sales over the next 5 years.” Today, Amazon is the undisputed leader posting revenue in 2011 at $40 billion.

Facebook’s continues to test the waters when it comes to monetization

Here are some events that force me to question whether Facebook can really make F-Commerce work:

  • The decommission of Facebook Checkin-Deals and Facebook deals less than 4 months after it launched. The rise of Groupon has forced Facebook to seriously think about playing in this space. However Facebook never really gave their Check-in deals a chance. I had thought the purchase of Gowalla would help shape and influence this product function.
  • Brand abandonment of Facebook stores implies that companies have not yet figured out how to convert fans. Gap, Nordstrom, Gamestop, Banana Republic among others quickly shut down their FB Stores. Gamestop indicated: “It (FB Store) …was like trying to sell stuff to people while they’re hanging out with their friends at the bar”
  • Facebook Credits has met with some success. Last year, Facebook posted a $3.7 billion revenue, 85% of which went to advertising. The remaining largely went to Zynga, the world’s largest social gaming service. But Facebook admitted in its S1 Filings, that if they failed to maintain good relations with Zynga, they may lose Zynga as a significant Platform developer, hence would adversely affect their financial results. Therefore, FB made it clear that it wanted to turn its virtual currency into a payment mechanism for all sorts of digital goods. But few are adopting it. Since its launch in 2010, companies like Warner have tested Facebook Credits as a payment vehicle within the Facebook ecosystem with the “Dark Knight” premiere. Unfortunately, no licensing or distribution deal resulted from this test. Slow adoption using Credits as payment for goods other than games continues.

  • Others have also criticized Facebooks for instituting this FB Credit-only currency system. What Facebook wants to do is to wall off your money from the outside world — to turn it into a currency that can only be used inside Facebook. This seems pretty autocratic and strong hindrance to F-commerce adoption.
  • The new timeline has also hampered marketers’ control and sizeable investment in custom tabs. Without default landing tabs, non-fans have to actively click through the little app tiles overshadowed by a Page’s cover. The change is a noble one that prioritizes the user experience and the site’s long-term health, but several marketers I’ve talked to are already grumbling.

Facebook is moving in the right direction!

  • As of June 19th, Facebook signalled its ambitions to grow as a payment platform. What Facebook has said is that it hopes to provide users more flexibility to make it easier to reach a global audience who want to pay for your apps, products etc in their local currency, rather than credits. Great news for its investors and businesses still trying to sell within Facebook.
  • And where big brands have failed, small businesses seem to be leading the way to successful sales online. With the help of companies like Payvment and Ecwid, who not only provide online storefronts but help business take advantage of Facebook’s own traffic to develop a successful strategies within the FB platform.
  • Open Graph, in my opinion, is probably Facebook’s current killer app. This has gone beyond the “Like” and allows user behaviour: What you’re reading, what you’re buying, what you’re watching, what you’re listening to– to display on your timeline and friends’ newsfeeds. Companies like Vevo have seen so much success they’ve removed their music videos from Youtube and have opted for Open Graph to drive visibility, registrations and views.
  • I’ve also read of rumblings about the introduction of the Facebook ‘Want’ and Purchase Button. This will allow you to add products to a virtual wish list. These functions will be added to Open Graph, allowing automatic sharing on friends’ newsfeed.
If Facebook is to succeed in monetizing their platform, businesses have to realize that the customer experience has to go beyond Facebook. Facebook is still a social space and businesses shouldn’t attempt to change that. It’s a holistic user experience that attempts to cater to the demands and expectations of each channel. So consider where the user is at in the buying cycle and which channel this exists. Optimize the experience to help move the user to the next buying stage whether that be in the existing channel or somewhere else. Success means integrating Facebook into business and other activities and delivering a seamless experience for the consumer. It’s still early day and I believe Facebook is in a very good position to take the lead on this. I’m very optimistic. How’bout you?

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