The image below was briefed yesterday by Mary Meeker at the Web 2.0 Conference in San Francisco. It shows how supply of online advertising (banners and rich media) is growing much faster than demand, and how CPMs are declining.
Given the macro-economic enviornment, it is not surprising to see the decrease in CPM.
What might be surprising, however, is the tremendous growth of socially oriented, user generated content (UGC) sites such as Facebook and YouTube, versus the decrease in share for traditional content sistes such as Yahoo and MSN:
From my selfish perspecitve, there are 2 take aways from these slides:
- Fewer people are buying traditional online ads – but still need to connect with prospects
- The maturation of social media and user generated cotnent sites means millions of people (inclduing SMBs) are increasingly comfortable authroing content to the web on their own.
With regard to small businesses (SMBs), these findings provide evidence that the economic down-turn, combined with the maturation of the social web, will rapidly motivate millions of SMBs to become more aggressive and creative in an effort to market themselves online.
In summary, this is why I continue to believe that do-it-youself (DIY) social media marketing platforms, like this, will rapdily increase in popularity and traffic in the coming months and years.
Okay…I’m gonna provide the ultimate cop-out response…it depends. I know, makes me sound like a wuss but here’s why: The SMB market is so diverse one really shouldn’t look at it as a single market on which to draw sweeping conclusions—the SMB space is really a collection of about 300 distinct industry verticals, each with unique demographic characteristics and varying technology comfort levels.
Think of it this way; the only thing roofers and lawyers have in common is they both go to dentists—well some do, at least.
This was one of the key learnings that came from our experience with the LeadStream SMB product. The level of online sophistication, tech trust and willingness to learn about “that Internet thing” varies greatly by business category.
That said, there is no question that the greater SMB space is trending toward online marketing, UGC, social networks, etc. Verticals with a younger owner demographic are actually quite sophisticated in their use of tech-driven marketing to find new prospects and engage current customers. The next three years will see exponential growth in the number of internet-savvy small business owners. The key for any vendor selling UGC platforms is to find and focus on those verticals where the fruit hangs low.
How about working with the user-generated content movement and working with consumers to make the ads? We call it people-powered advertising and we’re building a business around it. We think the best way for SMBs to find the best advertising is to source it from their customers. Word-of-mouth made tangible.