Barriers to entry … or opportunities?

Filed in MY BEST POSTS, SEM, SEO, Small Biz Marketing by Matt McGee on August 22, 2006 6 Comments

Can small businesses compete in the current search marketing environment? That was the question I addressed in my presentation earlier this month at SES in San Jose. Regular readers of Small Business SEM will remember that my answer was “Yes,” with a combination of working smarter, working harder, and being more creative. If you read this blog regularly, those are the three tenets that guide most everything I write to help small businesses succeed online.

Todd Malicoat recently shared on his blog a list of 11 Rising Barriers to Entry for Small Businesses on the Web. It’s a thought-provoking list, and as someone concerned about small businesses succeeding on the web, I find it reply-provoking, too. Unfortunately, there are a couple items on Todd’s list I find ambiguous enough not to be able to reply to with any intelligence. So, here’s how I’d reply to 9 of Todd’s 11.

1. Highly intelligent PPC automation tools and arbitrageurs

Success in AdWords isn’t based strictly on bid amounts, thankfully. Click-thru rate and landing page quality are big keys to PPC success. Yahoo’s new platform will be similar to AdWords, giving small businesses a chance to overcome automated tools used by the Big Boys. I’ll take an intelligent small business owner writing custom copy, combined with a well done, highly relevant landing page any day over a piece of software.

Story: My wife is a real estate agent. 2.5 years ago I launched a comprehensive AdWords campaign for her, targeting dozens of keywords with separate ad copy for each of the cities in the local market. Each ad has a custom landing page that matches the ad copy 100%. (I trust Google scores her landing pages incredibly high on their quality scale.) I started out with ridiculously low bids (for such a competitive industry) and a low monthly budget. Her ads proved very popular and quickly grabbed the top spots, above Big Real Estate sites with bigger budgets and automated tools at their disposal. And her ads have stayed there, even though I’ve never once upped her bid prices. As long as the system rewards quality, a human had better be able to beat a computer program. :)

2. Age factors impacting trust score

But age is just one factor in determining trust. Great content, quality inbound links, etc. can help even the newest sites score enough on the trust meter to rank well on semi-competitive terms and get traffic organically. (On highly competitive terms, agreed that age is a bigger barrier.)

3. Ad agencies catching on to SEO

Newspapers are also “catching on” to the web, but that doesn’t seem to be stopping online news sites from finding an audience. If I’m a small business owner marketing on the web, ad agencies learning SEO would be among the least of my concerns.

4. User data validation for trust score

Pass. (Unless Todd wants to clarify the direction he’s going with this.)

5. Savvy affiliates with established sites that don’t like competition

If I’m a small business owner selling, say … computer accessories (an industry with lots of affiliates), the sheer quantity of sites using PPC and taking up organic spots would be a challenge to overcome. But that’s where the small business owner can:

A) Work Harder — affiliate sites don’t have physical addresses and can’t take advantage of local search marketing, for example. Affiliate sites also can’t benefit from user-generated content such as customer reviews and ratings that are becoming so prevalent today.

B) Be More Creative — most of the Yahoo Groups I’m on (almost two dozen) don’t take kindly to affiliate folks coming on the list and promoting (spamming) their affiliate sites. But they generally do take kindly to actual business owners participating in the conversation. Most savvy web users and shoppers would tend to trust a real business owner more than Affiliate Guy out to make a quick buck.

6. SE’s shifting of the content revenue model

Pass. More details, please.

7. Diminishing conversion rates for link requests

But the flip side of that is the incredible ease and low barrier to entry of creating a blog as part of your small business web site. For many small businesses, time spent sending out link request emails would be better spent writing linkable content.

8. Just like the “real world” $$$$$$ will again = trust

As quickly as the Big Boys can buy trust, they can and do lose it right back with pitiful customer service. I work for a small ISP / webdev shop. On the ISP side of our company, our competitors are: AOL, MSN, the phone company (DSL), and the cable company (cable Internet). You may start with one of them because they’ve bought your trust, but many of you will end up with us because you need to be able to speak to a human and get help. Have you ever heard anyone rave about the phone company’s customer support? Or the cable company’s?

Hmmm. On the other hand, if Todd is referring to the Big Boys being able to spend a lot of money to build a high-quality web site that people trust … I don’t buy that, either. We just redesigned a client’s web site — a retired mom and pop home business — for very low 4-figures, and since the redevelopment, they’ve had orders from 15 different countries in the past 3-4 months. That’s trust.

9. Ad agencies playing ball with SEO’s

Same thoughts as in #3 above.

10. The day Aaron retires from building free tools

Hee-hee! Very true! We’re all in trouble when the free tools dry up, from Aaron and others.

11. Leveling of information between buyers and sellers

I think this is to the benefit of small businesses. Small businesses are the ones better able to get necessary information out to customers who seek it. They can reply to email requests much quicker, and with a human touch that the Big Boys usually can’t touch. This gets to one of the points I wanted to make at SES, but didn’t have time to discuss in my presentation:

The successful small business has to take perceived weaknesses and convert them into strengths. You’re small? Great. Smaller = quicker. React quickly to new opportunities and challenges.

Thanks to Todd for a good discussion point. Those 11 items are things small businesses should be aware of whether starting out or not.

Comments (6)

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  1. Todd says:

    Very nice list Matt. I agree that there are many opportunities for small business, but I still think the barriers are definitely rising. There are currently MOUNTAINS of opportunity for a savvy small business owner. Unfortunately, I think we’ll probably look back at this period as the “glory days” when it was easy someday.

    There is still, and will continue to be, a ton of opportunity, but the window for LOTS of opportunity is getting slowly smaller.

    >4. User data validation for trust score
    The use of toolbar and other data to validate that users are coming to the site (instead of just the need for links) – this makes some form of traditional marketing or linkbaiting a must, which in turn raises the necessary budget for marketing (raising the barrier to entry)

    >6. SE’s shifting of the content revenue model
    Adsense has devalued the premium content/ subscription model. I suppose in some ways this is more of an opportunity for small business than a raised barrier, but for the small business premium content publisher it is a death sentence.

    I won’t debate all of these, as I think it’s two different things. There IS a lot of opportunity – and that opportunity will shift – but I think the “glory days” will slowly fade away. Great post!

  2. earlpearl says:

    There are different circumstances between small businesses and local businesses.

    There are enormous web opportunities for local and regional businesses.

    Most B & M’s are not on the web, or not optimized for their products/services/business/ location.

    Search for a local business/service on the web then look up the same products/services in the local YP. There will be endless more providers in the old YP.

    Funny thing, users are sooooo getting away from using their fingers to walk thru the yp…when they can search on the web. The darn thing is they can’t find providers (local real estate is an exception).

    Small merchants on the web may face significant barriers to entry by changing algo methods and big monied businesses but local businesses are looking at huge opportunities.

    Dave

  3. Matt McGee says:

    I think we’ll probably look back at this period as the “glory days” when it was easy someday.

    I certainly can’t argue that point, Todd — but, as the saying goes, all good things must come to an end. The system rewards early adopters, no doubt about it. That’s why I keep banging on and on about small businesses needing to jump on Local Search, while it’s still new, easy to enter, and offers little active competition (from other small businesses).

    If I had a dime for every SBO that comes into OWT without a web site, saying “I know we should’ve done this YEARS ago!” … I could retire. I think a lot of SBOs will be saying the same thing about some of the current search marketing opportunities. You’re right that it won’t be long until “the good old days” are long gone.

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