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Jean-Eric (JE) is COO of DirectoryM, one of the Web’s fastest growing local ad networks. He brings a decade of experience building business community and advertising networks while developing innovative products and services to support them. Prior to DirectoryM he was a management consultant at Andersen Consulting, and sales director at Shared Insights.

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Small Business Survival: Geographical Targeting, Audience & Intent

Written on
December 4th 2008
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by Jean-Eric Penicaud  |
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money_tree_small.jpgADOTAS EXCLUSIVE — If you’re a small business owner or employee, you may feel like one of the brave few fighting for survival amongst a sea of expansive corporations, companies who have the resources to stay afloat in a recession without making major sacrifices.

While the pressures on small businesses are more burdensome than ever before, they’re not unique. According to the U.S. Department of State, ninety-nine percent of all independent enterprises in the United States employ 500 people or fewer. In other words, you’re not alone in facing financial challenges in the current crisis. Small businesses employ over half of the entire U.S. workforce.

Nevertheless, having statistics on your side is cold comfort at a time when small businesses are folding at a rapid rate, being forced to shut down in light of sinking revenues, decreased sales and inflated operating costs. Enterprises everywhere, small or not, are either going into lockdown or throwing a Hail Mary pass by shifting their business objectives and pouring money into expensive ad campaigns and promotions. Both extremes are counter-productive. While advertising is important, hemorrhaging money on ineffective campaigns simply isn’t worth it right now. Glossy “look-at-me” attempts to remain visible, whether on or off-line, will not protect you in this economic climate.

When determining how to best maintain marketing efforts on a budget, small businesses need to consider their precise objectives and priorities during the downturn. Is it to retain customers? (most likely, yes.) Is it to drive sales? (also a probable yes.) Is it just to maintain visibility amongst competitors? Or is it all three?

The problem with many existing solutions available to small businesses, like Internet Yellow Pages, print classifieds, vertical sites specific to your business and aggregators like Local.com, is that they struggle to address one or more of the three critical factors for your success – geographical targeting, audience intent and traffic. All of these services excel in one way or another, but in the current economic climate you owe it to yourself to seek out solutions that can deliver all three areas, otherwise you may find yourself falling into common traps.

Geographical targeting is intuitive; it’s the “local” in “local advertising.” If you’re a small business selling to your local community in Boston, you very likely don’t need to reach customers in California to drive sales. Most Boston-based small businesses need to reach Bostonians, and if you’re paying for your online ads to appear next to general search terms or placing banner ads on a site simply because it has the highest page views, you’re wasting your money. Having plenty of people see your ad won’t help you if they’re not the right people. These blanket marketing tactics only address traffic.

This leads into the next factor, audience intent. Your online advertising efforts shouldn’t just be limited to reaching your ideal geographic customer demographic, they need to incorporate the intent of that audience. It’s fine to advertise sports cars to Bostonian men between the ages of 35-50 but you’re still taking a chance. Most of those men who see the ad aren’t interested in buying a sports car, or any car for that matter. This online ad trap is significantly more difficult to avoid because it’s nebulous; it’s difficult to determine users’ intent. Customer data mining through ISPs is a bad idea, in addition to the fact that it’s prohibitively expensive. One way to address user intent is to take a vertical approach – place ads where prospective car buyers flock: auto enthusiast sites like CarandDriver.com. You’ll attract customers who are more likely interested in buying what you’re selling, but keep in mind you’ll still have to sacrifice traffic, and you will likely loose the targeted, local audience.

Another common way to bypass the grey area of intention is to list your business in an online directory, like YellowPages.com or SuperPages.com, and let willing customers come to you. There’s an incredible likelihood that someone who searches for “outdoor lighting Boston” is at least considering purchasing outdoor lighting. By listing your business in a local-focused online directory, you save yourself some effort. However, this approach has its drawbacks as well.

Internet Yellow Pages are nothing like the yellow books with which we grew up, but they try to operate as the online equivalent nonetheless. Thirty years ago, if you needed to find a carpenter, you looked up carpenter in the yellow pages and called the listings. It was the first place you turned to for information. That isn’t the case anymore. While online directories contain valuable information and can offer innovative features like ratings and reviews, they can’t change the fact that they’re not the automatic entry point for the Internet. When you want to find a carpenter, you type in “carpenter Boston” to Google, Yahoo or another search engine and evaluate the results. Sure, your listing (and website) may appear amongst the results, but it’s just one result. There’s so much information available to distract prospective customers that they might not even click on your listing. You’ll cover intention and geographic targeting, but not the next factor.

Traffic. Directories can offer a combination of geographic targeting and audience intent, but because they’re not the entry point for shopping research most cannot guarantee that your audience will see you. Online traffic is contingent on search algorithms that crawl for key words, relevant content and site changes. Some genuinely valuable directories may be able to offer you the right type of customer, but if those customers don’t find your listing amongst the shuffle it does you no good. Of course the concept of traffic is subjective; you don’t need to have thousands of people viewing your listing or ad on any given day. Nonetheless, you do need a steady stream of interested viewers to make sales. That being said, be cautious of any online advertising service – directory, display, search ads – that charges you a fixed rate per month. This is a sneaky way for service providers to pocket your money while your listing or ad languishes in obscurity. Your local online advertising solutions must provide you with performance metrics (click-through rates, etc) so that you can make sure your limited budget yields ROI.

No matter which solution or combination of solutions you adopt, remember that the key to marketing success in the economic downturn is to get in front of the right-sized audience, from the right demographic, when they’re willing to buy. If your online advertising strategy addresses geographical targeting, audience intent and traffic you’ll be properly equipped to survive, perhaps even thrive, in these tough times.

– Express your opinion, comment below.



Reader Comments.

This article doesn’t mention our technology, but it’s as if this article was written about it. iPromote.com offers exactly what Jean-Eric is suggesting: geo-targeted display advertising on a cost-per-click basis with no fixed monthly fees.

Posted by Hudey | 2:44 pm on December 4, 2008.

that’s absurd, a fixed rate means you can budget accordingly; variable rates mean they can be changed at any time if the advertiser thinks you’ll pay the difference. I’ve heard tons of stories of places that do per-click claiming to have brought businesses massive amounts of speciously documented traffic and then charging them for it. Flat rate is the way to go.

Posted by blah | 11:28 am on December 5, 2008.

I think it is a whole new ball game out there when it comes to advertising. The old models don’t work anymore and new ones need to be created. The analogy I use is the current US economy. The Feds were using models from the 30’s & 40’s during inflationary growth; Greenspan admits he had no new models. I have to say, with all the brain trust economists have today, couldn’t they have thought of a few new models to avoid this downturn? I want to see some new models instead of trying to fit small business advertising into old models based on concepts of the past.

Posted by Michele | 6:26 pm on December 5, 2008.

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