Small Biz & Self Service

One of the most challenging aspects of local search is small business (SMB) advertiser acquisition. Everyone is aware, especially Google, Yahoo and Microsoft, that the US SMB market is where the advertiser volume is: almost 99% of US businesses qualify as small businesses (here defined as < 100 employees).

According to the US Small Business Administration (SBA), more than 20 million firms qualify under the definition above, with almost 19 million of those having no employees at all!

Paid search was built by small businesses, which discovered its effectiveness long before the Fortune 1000. I’ve estimated that as much as 70% (perhaps more) of Google’s advertiser base qualify as SMBs. And while Google is moving “upstream” to try and capture more major branding dollars, it’s equally concerned about gaining more small business advertisers, as are Yahoo and Microsoft.

But the lack of a local sales force has made it difficult to deeply penetrate the SMB market. By contrast, the new AT&T, for example, will have roughly 3,500 local sales people. Google, Yahoo and Microsoft have relationships with yellow pages publishers and others, which they’ve used as channel partners to gain small business advertisers they would otherwise have been unable to directly acquire.

Accordingly, one of the raging debates in local search concerns “self-provisioning” or “self-service.” The question is: how many SMBs will sign up directly for paid search and how many must be acquired through a “push” channel (local sales force)? There are those convinced that a sales force is absolutely necessary to acquire any meaningful penetration in the SMB market.

Read the rest of this post at SEL.


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