sme report-final-web

ThinkWorks

2015OctOber 2015

the digital SMe

thOUght leaderShiP SParKiNg eXcePtiONal reSUltS

Foc

us

on

Using digital marketing to fuel growth

in partnership with:

LATITuDE | THInKWoRKs | THE DIGITAL sME 2015 | 2

contributors

andrew harrisSME Operations DirectorLatitude

cedric chambaz Head of Marketing Europebing ads

Salla Venalainen Marketing ManagerLatitude

emma rose Graphic DesignerLatitude

Jeff MillingtonBusiness Development ManagerLatitude


Contents It's a Digital World

Respondent Profile

The SME Spectrum: Uninterested to Advanced

What’s Holding Back the Digital Tide?

• The Missed opportunity

SEO Rising to the Top

Drivers of SEO Adoption

Social Media: Overly Organic?

Unpicking PPC Myths

• The Cost Conscious SME

• The Diminutive SME

Tomorrow’s SME Success Stories Are Those Who Invest in Digital Marketing Today

The Search Industry - An Industry Perspective

Conclusions

About Latitude

About Bing

About Circle Research

04 -

1011

- 15

16 -

1922

24

16

04

07

facebook.com/LatitudeDigitalMarketing

@Latitude_Group

20 -

21


We live in a digital world. The trains we commute on are

no longer dominated by the rustling of newspapers but

the glow of phones and tablets; no longer do we wait

until a certain time in the evening to make a landline call but instead

‘WhatsApp’ for free whenever we like. Perhaps if you’re turning 100

any time soon, you might even receive a congratulatory Instagram

from the Queen rather than the traditional telegram?

It’s not just our ‘consumer’ lives that are being affected. In

the world of business, digitisation is seen by many as the

‘ultimate leveller’, enabling the ‘new-guy’ to compete with the

long-established incumbent. Every business now has access

to seemingly unlimited information, cheap computing power,

open-source operating systems and much more. This means that

in today’s world, the SME is equipped more than ever before to

become a real challenger.

One aspect of business life that has changed for good as a result

of digitisation is marketing. Within this world there are numerous

channels through which companies can reach their customers

and approach prospects. With billions of online searches

happening every day, the search engine market is arguably now

the most important marketing channel. And within this context,

phrases like ‘SEO’ and ‘PPC’ have been adopted into the common

parlance of ‘marketing speak’.

But how well have SMEs adapted to the era of digital marketing?

Is it still true that all SMEs lag behind when it comes to digital

marketing adoption or is this now a thing of the past? In this

report, we explore the current marketing activities of SMEs,

trends within the industry and uncover how to optimise a digital

marketing strategy to turn today's SMEs into tomorrow’s success

stories.

We hope you enjoy the report and would love to hear from

you. In fact, why not tweet us your thoughts @Latitude_Group

or @bing?

It’s a Digital World

SEO:Search engine optimisation (SEO) attempts to get your website towards the top of search engine results for specific phrases

PPC:Pay per click (PPC), otherwise known as Paid Search, is a way that allows businesses to display adverts within search engine results and only pay a fee if their advert is clicked.


The Digital SME 2015 report

is based on an online survey

of 311 marketing and

advertising decision makers in UK

SMEs. The research was conducted

during August and September 2015.

It was sponsored by Latitude Digital

Marketing and Bing, and conducted

by Circle Research.

The results were split across a

wide range of industries and

represented all different sizes of

SME including; Sole traders, Small

(1-50 employees) and Medium (51+

employees).

Respondent Profile

{This report is based on an online survey of 311 marketing and advertising decision makers in UK SMEs.

Figure 1: Industry of respondents

Figure 2: Company size of respondents

75

5665

3935

41

sole Trader small Medium

sole trader 2-4 employees

5-10 employees

11-20 employees

21-50 employees

51+ employees

PROfESSIOnAL SERvICES

TECHnOLOGy, COMMUnICATIOnS, MEDIA & SERvICES

RETAIL AnD WHoLEsALE

COnSTRUCTIOn, MAnUfACTURInG AnD UTILITIES

HOSPITALITy AnD TRAvEL

EDucATIon

BAnKInG, fInAnCIAL SERvICES OR InSURAnCE

HEALTHcARE

TRAnSPORTATIOn

FMcG

GAMInG AnD GAMBLInG


The SME Spectrum: Uninterested to Advanced

SMEs are ambitious. Whether

excitable start-ups or established

businesses, the majority - 66%

- say they want to grow over the next 2

years with only 5% planning to downsize.

vital to achieving this growth will be

developing an efficient marketing strategy

that builds brand awareness and promotes

products and services.

Within this context though, the current

use of marketing amongst SMEs is very

mixed. Despite frequent claims that

‘SMEs don’t get marketing’, nearly half

(43%) have in fact truly embraced it and

now have a formal marketing plan in

place. However, that still leaves almost a

quarter (23%) who do no marketing at all

and a further one third (34%) who only

conduct marketing on an ad-hoc basis

‘when they have spare time’. In addition

to this, less than half of those who do any

form of marketing actually have a budget

set aside for it.

When it comes to digital marketing, SME

activity is once again sporadic. Of those

who do any marketing, two-thirds (69%)

also do digital marketing, but only half of

these (36%) have a digital marketing plan

in place and a further one third (31%)

don’t do any digital marketing at all.

Overall, there is no such thing as ‘the

typical SME’. Instead, SMEs span a wide

spectrum from those who are completely

uninterested in marketing right the way up

to the very advanced.

Based on their current marketing

behaviour, we can divide SMEs into six

distinct groups. Which one do you fit into?

{The majority of SMEs - 66%

- say they want to grow over

the next 2 years with only

5% planning to downsize.

14% Grow rapidly

52% Grow somewhat

29% Stay the same size

5% Downsize

Figure 3: SME growth projections


Figure 4: Prevalence of marketing activity amongst SMEs

Do MARKETInG WHEn WE HAvE THE TIME

DOn'T DO Any MARKETInG

HAvE A MARKETInG PLAn

HAvE A DIGITAL PLAn

Do DIGITAL WHEn WE HAvE THE TIME

DOn'T DO Any DIGITAL

43%

34%

23%

Of those who do marketing

36%

33%

31%


SME Marketing Behaviour: The Six GroupsLeaders (19%) – These sMEs have fully

embraced digital marketing with formal

plans laid out. They also have a digital

budget to ensure things actually get done

and not just talked about.

Close Followers (10%) – similar to

‘leaders’, these SMEs have an overall

marketing plan but are not quite as

advanced in ‘digital’ - only doing it when

they have the time. They also often lack a

formal digital budget. It is likely that as the

benefits of the ‘occasional digital’ come to

the fore, these close followers will invest

more heavily.

Cheap followers (7%) – These sMEs

have plans for both offline and digital

marketing, but have no budgets in place

to guarantee execution. Spending is

done ad-hoc or is focused entirely on

‘free’ channels. These SMEs have good

intentions but may not be maximising

digital benefits.

Casuals (14%) – casuals are not opposed

to marketing however it’s not a top

priority. They only do it when they have

the time and very few have a budget.

Old School (25%) – These businesses do

marketing activity but are yet to move to

digital, sticking to offline channels instead.

Uninterested (24%) – This group say

‘no thanks’ to marketing, claiming not

to do any marketing activity (or at least

not realising that they do). This group

often feel like the David struggling against

Goliath and/or are typically less interested

in growth.

Whilst an SME may fit into any one

of these groups, there are three

characteristics that tend to have a heavy

influence; size, growth plans and industry.

{Whilst an SME may fit into any one of these groups, there are three characteristics that tend to have a heavy influence: size, growth plans and industry.

LEADERs19%

oLD scHooL25%

unInTEREsTED24%

cLosE FoLLoWERs

10% cAsuALs 14%

CHEAP FoLLoWERs

7%

Figure 5: Six groups of SMEs


company Size: Even amongst SMEs,

business behaviours vary widely based

on the number of employees they have.

Sole traders are, of course, very different

from 100-staff outfits in numerous ways

– including when it comes to marketing.

In this case, the larger you are, the

more likely you are to be in the ‘leaders’

group. Only 17% of sole traders have a

marketing plan compared to over 66%

of medium-sized companies. Similarly,

only 17% of sole traders who do marketing

have a digital plan compared to 55% of

medium-sized companies. This all adds up

to 43% of medium-sized companies being

‘leaders’ compared to just 5% of sole

traders.

Growth appetite: Similarly, there are

big differences between SMEs that have

growth as a key priority of their business

and those who don’t. Those who are

looking to ‘grow rapidly’ realise that

they need to be on the ball with their

marketing and have therefore adopted

digital marketing at a much greater rate.

47% of these rapid growers are in the

‘leaders’ group compared to just over 5%

of those who are looking to downsize or

stay the same size.

One final variable that also has an impact,

albeit less so, is industry. for example

‘Tech and Comms’ companies tend to have

a more ad-hoc approach to marketing

with a quarter falling into the ‘casual’

category whereas Professional/financial

services and Construction/Manufacturing

are more ‘old school’ in their approach

with lower digital uptake. On the flip side,

unsurprisingly, Retail/Wholesale is the

most advanced industry with one third of

SMEs in this sector falling into the ‘leaders’

or ‘cheap followers’ categories.

Figure 6: Categories by company size

Figure 7: Categories by growth projection

sole trader

Grow rapidly

Grow somewhat

stay same size

Downsize

Leaders

Leaders

Close followers

Close followers

Cheap followers

Cheap followers

casuals

casuals

Old school

Old school

uninterested

uninterested

small

Medium

14%

18%

43%

13%

13% 8% 8%13% 18%

47% 9% 16% 9%14%

11% 15% 24% 18%

28% 46%

17% 13% 9% 26%

30%

14%

17%

36%

50%

18%

15%

14%


What’s Holding Back the Digital Tide?

There are many digitally-savvy SMEs

out there, but considering the

importance of digital marketing,

why do only half of SMEs put digital at the

top of their agendas? On the surface you

might think that it’s because of the number

one way in which SMEs believe their

clients typically find them; through word of

mouth (75%) – perhaps digital marketing is

unnecessary for SMEs?

This couldn’t be further from the truth.

nearly two thirds of SMEs (62%) say that

customers have also found them through

search engines, over one third (37%) via

social media and just under one third

(31%) through email marketing. That’s far

from insignificant and in fact considerably

outweighs ‘traditional’ methods of

advertising such as flyers and leaflets

(18%) and adverts in publications (21%).

{Nearly two thirds of SMEs (62%) say that customers have also found them through search engines, over one third (37%) via social media and just under one third (31%) through email marketing

75%

62%

37%

31%

22%

21%

18%

10%

Word of mouth

online adverts

Search engines

Magazines or other publications

Social media

flyers/Leaflets

Email marketing

Telemarketing

Figure 8: How customers discover SMEs


The Missed Opportunity

In fact, the number of customers that

SMEs attract through digital channels

may even be higher than they report,

as only 34% of SMEs currently measure

marketing effectiveness. Instead, they use

a ‘gut-feel’ approach to determine what

works, and what doesn’t; an approach

that may be littered with misperceptions.

for example, many customers may first

encounter an SME online but, due to a lack

of tracking, the SME could be completely

unaware of this.

Measuring Effectiveness

34% of SMEs measure the effectiveness

of their marketing… so who are they?

Generally they are those who are looking

to grow their business (68% of these have

measurement metrics). They are also

most likely to be in the retail or wholesale

industry (which is very sales-led).

How SMEs go about measuring marketing

effectiveness depends on the size of

the company. To begin with, smaller

companies are less likely to measure

effectiveness in general, but there’s

a difference in how they go about

measuring too. With sole-traders and

small companies, the key metrics used

are the sales value generated and the

number of leads generated. However,

in medium sized companies, customer

surveys and web analytics are leveraged

more frequently and become the primary

source of measurement.

sole trader small medium

Leads generated

64% 62% 63%

sales value generated

55% 73% 69%

customer surveys

36% 33% 81%

Analytics software

27% 55% 75%

This means there may be a huge missed

opportunity as, without measurement, SMEs

won’t know how effective their digital channels

and their overall marketing activities are or

could potentially be. Even a good number of

the ‘old school’ and ‘uninterested’ are telling

us that they get customers from search – 57%

and 42% respectively – despite having no

digital plan! Getting the odd customer via an

unpromoted website is great, but just imagine

how many more customers they might get

through even just a little digital marketing?

Real digital marketing engagement, with

proper measurement could send SMEs soaring.

"There may be a huge missed opportunity here, as without measurement, SMEs won’t know how effective their digital channels are or could potentially be."


Despite a rather scattered current

adoption, digital marketing

is increasingly registering

on the SME radar. nearly one quarter

have significantly increased their digital

marketing expenditure over the past

year – more than the 18% said to have

significantly increased their marketing

expenditure overall – showing that

increasing resource is being pooled

to digital.

So which digital channels in particular

will this investment be hitting? Delving a

layer deeper, we discover that awareness of digital channels amongst SMEs is not poor but nor is it great. Whilst the

large majority of SMEs are aware of email

marketing, there are a quarter who aren’t

aware of SEO, a third who are not aware

of PPC and 40% who are not aware of

paid social.

The first step to accelerating SME

digital marketing activity must

therefore be for sMEs to simply

get to grips with the channels available.

However, with only 29% of SMEs currently

knowing who to turn to if they want to

find out more about a particular channel,

this education activity will have to be

proactive.

Usage of digital channels follows a similar

pattern to awareness with email marketing

the most prevalent (46%) followed by

organic social (39%), then SEO (35%),

then PPC (25%). Without a shake-up, this

pattern also looks set to continue in the

future with a similar level of SMEs saying

they have plans to take up each channel

over the next 12 months.

{Whilst the large majority of SMEs are aware of email marketing, there

are a quarter who aren’t aware of SEO, a third who are not aware of

PPC and 40% who are not aware of paid social.

SEO Rising to the TopFigure 9: Awareness of marketing channels

Figure 10: Who would SMEs ask to learn more about channels?

Figure 11: Current channel usage and future plans

Email marketing 78%

76%

68%

63%

60%

60%

5%

Search engine optimisation

Paid search

Online display advertising

Paid social media

Organic social media marketing

none of the above

29%

44%

28%

Search engine 18%marketing company/expert 18%Web dev company/expert 14%Specialist search agency 12%IT provider 8%Personal contact 7%

I would know exactly who to ask

Use currently

Plan to use next year

I know the type of organisation to ask, but not a specific organisation

no, I wouldn't know who to ask

Email marketing

Search engine optimisation

Paid search

Online display advertising

Paid social media

Organic social media marketing

46% 11%

14%

15%

8%

7%

10%

39%

35%

25%

19%

17%


This picture could change

significantly if awareness and

understanding of channels

improves. Of those not currently using

each channel, nearly three quarters (72%)

say they are considering implementing

SEO and more SMEs would like to find out

additional information about SEO than

any other channel. If SME knowledge and

confidence in SEO increases, adoption

of SEO could outstrip email marketing as

SMEs’ go-to digital channel in the future.

Channels SMEs would like to know more about

Figure 10: Who would SMEs ask to learn more about channels?

Figure 11: Current channel usage and future plans

Use currently

Plan to use next year

SEO 47% OrgaNic SOcial MEDIA 37%

PPC 28% Paid SOcial MEDIA 27%

channel Currently not using

sEo 72%

Organic Social Media 62%

Email Marketing 61%

online Display 58%

PPC 55%

Paid Social Media 52%


Drivers of SEO Adoption

SEO appears to have struck a chord

with SMEs – so what’s so great

about it?

The benefits of SEO are seen to be

widespread. We examined four digital

channels in detail – SEO, PPC, ‘Organic

Social’ and ‘Paid Social’ – to discover

which were considered the best for

achieving a variety of marketing aims. In

six out of eight categories, SEO claimed

top spot.

As a ‘free’ form of marketing based on

everyday consumer technology, it is

perhaps no surprise that ‘Organic Social’ came top in ‘easiest to manage’ and

‘cheapest’. However, in every other area,

SEO was considered the number one: it

creates the most leads and the highest

quality leads; it is best at raising awareness

and is easiest to understand; plus it

represents the best use of time and is best

value for money.

At this stage, you may be wondering why

it is that SEO seems to come out so much

higher than PPC? Isn’t PPC also a good

way of promoting your website across

search engines?

Quite simply: yes it is! However, as we will

see on page 16, there are some common

misperceptions plaguing the world of PPC

and resulting in missed opportunities.

1. Creates the most leads: SeO

2. Creates the best leads: SeO

3. Best at raising awareness: SeO

4. Easiest to understand: SeO

5. Best value for money: SeO

6. Best use of time: SeO

7. Easiest to manage: Organic Social

8. Cheapest: Organic Social


Social Media: Overly Organic?Before we look at PPC and the

misconceptions associated with it though,

let’s examine Social Media in a bit more

detail. SEO may be where SMEs are

looking to for the future but currently

Organic Social is slightly more prevalently

used (39% vs. 35%). It’s obvious why SMEs like Organic Social, with 41% agreeing that it gives good ROI and 40% agreeing that it was a reliable way of generating new business (compared to just 22% disagreeing for each).

There are two ways that Social Media

can be leveraged – organic or paid – but

currently SMEs are overwhelmingly more

likely to favour organic. firstly SMEs say

that organic is much easier to understand

and cheaper than the paid counterpart;

but more interestingly, they also believe

that it creates more, and better quality,

leads.

However, when it comes to organic social

media, the biggest challenge for SMEs

is that they are ‘unsure of the benefit’.

This, coupled with the fact that few SMEs

are measuring effectiveness of marketing

activities, suggests that it’s very unlikely

they truly know that organic social creates

more sales and better quality leads.

As Andrew Harris, SME Operations

Director from Latitude explains, these

current perceptions seem to be down to

a lack of understanding about Paid Social

and its benefits, and SMEs may be missing

a trick by dismissing it!

In 2014, facebook adjusted its algorithm which downgraded potential organic reach on its platform. This adjustment was to encourage businesses to investment more in paid advertising instead. This was a long-expected move from facebook. In fact, a facebook blog from June 2012 highlights that a facebook page post on average will only

reach 16% of fans.

https://www.facebook.com/notes/facebook-for-business/sponsor-your-page-posts/10150675727637217

Therefore without embracing paid social, SMEs need to consider two points:

1) you cannot guarantee that your

existing fans will see every message.

2) Without paid promotion, it will prove

extremely difficult to grow your fan

base.

A study by Ogilvy, which monitored 100+ facebook Brand pages, found that since October 2013 organic reach on facebook has declined, down to only 6.15% in feb 2014.

Since the facebook algorithm update, marketers have needed to “pay to play” to get the most out of their social marketing. Marketers now recognise that to truly maximise a brand message

on facebook and to reach the huge potential of this very popular platform, you need to sponsor facebook Page Posts.

To highlight the potential here, let’s use a hypothetical facebook page for a local gym in Manchester with 100 facebook fans. An organic post with a special membership offer is only like to be seen by an average of 16 fans (based on the 16% average reach highlighted in the referenced facebook post above). With a budget of just £10 per day, a sponsored post for a special membership offer targeting facebook users who are based in Manchester and are interested in “gyms” could reach up to 7,000 users.

While other social media platforms still offer some considerable organic reach, it’s in the best interest of the sMEs to begin to invest in the paid opportunities that exist with the likes of facebook, Twitter and other platform for better reach. The difference with facebook in particular cannot be ignored and highlights the potential for SMEs to drive business growth via paid social.

*Estimate generated by the facebook ads platform, using Manchester and “fitness and wellbeing” targeting preferences.

There is also a misperception in the comparison between Social Media and PPC. Currently Organic Social is being used more by SMEs than PPC is (39% vs. 25%) and those not using these methods say they are more likely to consider organic social than PPC in the future.

the reason seems to be that SMes are focussing on the process rather than the benefit. Social Media is deemed easier to use and understand and therefore they use it more often. However, when it comes to generating quality leads or sales, PPC is universally recognised as being very competitive, if not more suited to the job than Social Media. Organic Social may be easy… but what’s the point in simplicity if it doesn’t deliver!

SMEs that are looking to grow seem to have cottoned on to this fact as half (50%) use PPC, compared to just 17% of those who are looking to stay the same size. SMEs need to take their eyes off of the perceived effort and cost (more on this later) and focus instead on the potential outcomes. Growth needs new customers, and PPC produces more sales and better leads than organic social media.

As we will see in the following section though, these aren’t the only misunderstandings that hang over the head of PPC.

andrew harrisSME Operations Director

Latitude


Unpicking PPC Myths

We saw earlier that SMEs are

enamoured with SEO and

that they are often using

Organic Social Media, but they seem less

interested in PPC. Let’s delve into more

detail on why this might be.

for many SMEs they simply feel that PPC is less relevant to their business (43%). Reasons underlying this perception typically group PPC rejectors into one of three categories:

• ‘Diminutive’ SMEs• ‘Cost conscious’ SMEs• ‘Happy as we are’ SMEs

We're a local company

We use word of mouth

SEO works well enough Wouldn't reach our clients

Poor return on investmentIt's open to abuse

We're a small company

We're a B2B company

Specialised product for a niche audiencehappy as we are Diminutive Cost conscious


Plugging the Knowledge Gap

We're a local company

59%

48%

33%

18%

12%

3%

We're a small company

However, are these concerns

valid? Whilst many SMEs have

reservations about PPC, there

is simultaneously a tacit admission of a

lack of knowledge. When those who have

not used PPC are asked what would make

them consider using it in the future, the

top factor to emerge was ‘learning more about how it works’. It’s a common

cliché that we’re scared of the unknown;

accordingly it appears that SMEs would be

much more likely to use PPC if they just

knew a bit more about it.

This is backed-up by the fact that the most

digital-savvy SMEs – the ‘leaders’ – are

significantly more likely to be using PPC

(59% compared to 25% overall). Once

you’ve reached a level of sophistication

in digital marketing, the benefits of PPC

come to the fore.

It may help to close the knowledge gap

if SMEs were to work with specialist

agencies when it came to PPC. Currently

78% of those who use PPC work directly

with the search engine as opposed to

only 16% who work with agencies. These

agencies have the potential to inform

and guide SMEs on the challenges and

opportunities of PPC, helping them to

ultimately enjoy its bounty.

However, in order for this to happen

there needs to be an improvement in

relationships between SMEs and agencies.

At the moment there are low levels of

trust, with only one in five SMEs (18%)

saying they trust SEO and PPC agencies; a

situation that they want to change! After

‘learning more about how it works’, the

top factor that would encourage more

SMEs to use PPC in the future is ‘Finding a partner or agency I would trust to do this for us’. SMEs are searching for an agency

that they can trust to guide them through

the complicated world of PPC, and in

doing so overcome the knowledge gap

that is currently causing them to miss out

on its benefits.

So if we remove knowledge as a barrier,

what would remain of the other

challenges we previously saw? Would

these remain as real barrier, or vanish as

phantom misperceptions?

Earlier we saw that there were three

groups of SME PPC-doubters: ‘cost

conscious’, ‘diminutive’ and ‘happy as we

are’. Let’s put the ‘happy as we are’ group

to one side; this group rejects PPC due to

the ‘lifestyle’ nature of their businesses

that they are happy to keep relatively

small, rather than due to any concerns

about PPC; instead, let’s delve deeper

into the remaining two groups: the cost

conscious and the diminutive.

{At the moment there are low levels of trust, with only one in five SMEs (18%) saying they trust SEO and PPC agencies; a situation that they want to change!

leaders

cheap followers

close followers

Casuals

Old school

Uninterested


The Cost Conscious SME

A marketing campaign is, of course,

useless if it does not produce a

good Return on Investment (ROI).

One of the most prevalent barriers to PPC

adoption quoted, alongside absolute cost,

is doubt over exactly this. To demonstrate

this point, let us compare perceptions

of PPC and Organic Social Media. fewer

than one in three sMEs (29%) believe that

PPC gives a good return on investment,

compared to 41% for Social Media; and

nearly half of SMEs quote absolute cost of

PPC as a barrier (48%) compared to just

11% for Organic Social Media. If SMEs are

going to invest in PPC, they need convincing

on the return they will receive.

All this is leaving many SMEs with the

feeling that PPC is too expensive with

fewer than one in five (19%) believing it

provides good ROI. However, there is some

question as to how SMEs know this to be

the case as we saw that only 34% of those

doing marketing have metrics to track

effectiveness. It may be that it is a gut

feeling that PPC does not produce good

ROI as opposed to a fact. This certainly

seems to be the case as in reality, over half

of SMEs that use PPC say that it provides a

good ROI (52%)!

The ‘cost barrier’ perception is

understandable given that in terms of pure

monetary value, PPC is a more expensive

form of advertising than, for example,

social media. However, this misses a key

business nuance: ‘time is money’.

On average SMEs using Organic Social

Media spend around 5 hours a week

managing this activity – that’s about 250

hours a year. Say you value an average

employee’s time at £50 per hour; that

would equate to £12,500 per year spent

on social media. Assuming each PPC click

costs an SME 50p, time spent on Organic

Social Media equates to 25,000 leads per

year that could be generated via PPC.

Is your Social Media activity generating

25,000 leads per year?

Indeed, for SMEs who use PPC, they are

adamant that when it comes to digital

marketing, PPC is the best use of their

time, an opinion that is also shared by the

digital-savvy ‘leaders’ who believe that

PPC has a better ROI than Social Media.

{Say you value an average employee’s time at £50 per hour; that would equate to £12,500 per year spent on social media. Assuming each PPC click costs an SME 50p, time spent on organic social media equates to 25,000 leads per year that could be generated via PPC. Is your social media activity generating 25,000 leads per year?


The Diminutive SME

The diminutive SMEs highlight areas

of ‘niche-ness’ as rationale for

rejecting PPC:

• ‘We are a local business’

• ‘Our products are too niche’

• ‘We are too small’

•‘We’re B2B’

It appears that many sMEs believe that

because they are based in ‘Littlevillage-on-

sea’, where nobody is going to drive 500

miles to come and buy from them, there’s

consequently no need to be visible to the

‘big wide world of the web’.

On the contrary, these business

characteristics are in fact drivers of why a

business should adopt PPC.

‘We are a local business’ – Far from the

‘big wide web’ when you set-up a PPC

campaign, you can target your adverts

by location. This means that that you can

determine that only people searching

within ‘Littlevillage-on-sea’ will see your

advert, avoiding any wastage of adverts

to Mr or Mrs Bloggs in ‘faraway village’.

Indeed, Digital Marketing Pro mentions

that PPC is highly effective for local search

and list it as one of their 10 reasons that

SMEs should use PPC.

‘Our products are too niche’ – Similarly,

the ‘keywords’ used to define when

your advert gets shown can be made

as ‘niche’ as you like, such that having a

very niche, specialist product should in

fact lead to your PPC adverts having a

higher conversion rate as only customers

searching for your specific niche will be

shown the advertisement.

‘We are too small’ – The muscle of big

business can be a constant thorn in the

side of SMEs. Take SEO. Building great

SEO ranking can take substantial time and

effort. Over four in five SMEs (83%) think

it is important to appear on the first page

of search results and of those nearly nine

in ten (89%) believe that being in the

top 3 results is important – one in three

(33%) say it’s critical. However, how can

you guarantee a top three position when

competing against behemoths of the

industry with thousands of employees and

dedicated SEO teams? In contrast, PPC is

great for giving yourself that initial boost

and getting to the top of the rankings.

As Brad shorr at Forbes(1) explains, PPC

campaigns can be fantastic for allowing

SMEs to compete against big business.

‘We are B2B (and PPC isn’t relevant in B2B)’ – Whilst B2B is often considered

to be behind the times compared to its

B2C neighbours, online search has now

fully penetrated both worlds. According

to a recent ‘State of B2B procurement’

study, 77% of B2B companies use search

when buying products or services(2).

Search marketing is not irrelevant for B2B

companies – it’s nigh on essential.

If you’re a PPC rejector, perhaps it’s time to look again!

1. http://www.forbes.com/sites/allbusiness/2015/05/30/small-businesses-can-compete-with-big-brands-on-pay-per-click-ppc-advertising/2. http://www.brafton.com/news/94-percent-b2b-buyers-research-online-purchase-decisions


Tomorrow’s SME Success Stories Are Those Who Invest in Digital Marketing Today

As this report has shown, there is

no such a thing as a typical SME.

While this came as no surprise to

the team here at Latitude, after all, we have

been working with SMEs for over 8 years

now, there were other insights that came

out of the survey that were definitely more

surprising to us.

Latitude commissioned this survey in

collaboration with Bing to gain insights

into the mindset of UK SMEs. We wanted

to confirm our perceptions with well

researched data so that the solutions that

we offer to our partners are based on

actual gaps in the market. We also wanted

to understand potential roadblocks in

SME digital adoption, as well as have an

updated view on the SME knowledge of

digital marketing channels.

SMEs have long been in love with Social

Media and on the surface it’s easy to

understand why. Social Media is perhaps

one of the few (if not only) marketing

channels that strips the ‘magic’ away

from marketing and simplifies it to

something everyone can understand and

do themselves. It’s also a channel where

you can seemingly reap the fruit of your

hard labour fairly quickly. While we at

Latitude love Social Media and believe

that it can achieve fantastic results for

any brand, when managed as part of a

full marketing strategy, it simply cannot

be relied upon single-handedly to bring in

direct sales – particularly if you’re an SME.

This leads me to the biggest reveal that

the data from the survey has uncovered:

more (39%) SMEs are using social media, compared to only 25% of SMEs who use PPc as part of their marketing efforts.

More surprisingly, those not using either

of the channels are more likely to consider

Organic Social Media than PPC in the

future. yet, the biggest challenge for SMEs

when it comes to Organic Social Media

is the fact that they are ‘unsure of the

benefit’. How is there such a disconnect?

PPC is often understood to be the channel

for driving direct sales and growth for

businesses. So why are some SMEs holding

back on investing in PPC?

As mentioned in the report, there are a

few key reasons why some SMEs are not

looking at PPC as a potential marketing

channel; a lot of it is to do with a

knowledge gap that still exists amongst

SMEs around PPC and what it can achieve

for a business of any size. Interestingly, the

SMEs hot on growing and already using

PPC as part of their marketing approach

are fully bought-in to PPC; with 59% of

‘digital leader’ SMEs using PPC as part of

their marketing approach, arguing that

it gives better ROI and is the best use of

their time. These SMEs are often on the

more ‘medium’ size of the SME spectrum,

with smaller SMEs and sole traders

perhaps not grasping the potential of

PPC yet.

There are also other reasons: many

SMEs are worried about the cost of PPC

as a channel and the perception is that

successful PPC marketing is not possible

on an SME-sized budget. from experience

we know that this is not actually the case.

There are also concerns around finding

an agency or a partner to trust to deliver

services – this may be due to previous

experiences with ‘cowboy’ agencies that

have led some SMEs to, understandably,

steer clear of PPC altogether or simply

not knowing which types of companies to

approach. finally, some SMEs believe that

PPC advertising is not worth their time

if they are operating in a niche market

– a perception that is also based on

misconceptions as PPC marketing is crucial

for operating in niche markets and can

help regional businesses find customers

with precise targeting options.

However, SMEs are very interested and

bought in on investing in SEO, which.

while necessary, is a long-term tactic as

opposed to something that always brings

in immediate ROI. This further solidifies

the argument that SMEs are more than

ready and confident in investing in digital

{PPC is often understood to be the channel for driving direct sales and growth for businesses. So why are some SMEs holding back on investing in PPC?


The Search Industry - An Industry Perspective

marketing, but perhaps lack of knowledge

and access to the right information and

the right partners are still overarching

barriers.

Is PPC a lost cause for the SME market?

Absolutely not. The potential for SMEs

and companies working with SMEs in

digital marketing is absolutely massive.

In fact, there were a record 5.2 million

private sector businesses in the UK at the

start of 2014, the first time the business

population has exceeded 5 million. At the

start of 2014, 99.3% of the 5.2 million

private sector businesses were small

and 99.9% were small or medium sized

(SMEs).This is a record annual increase

of 330,000 businesses (up 6.7% since the

start of 2013). If we apply the number

of SMEs wanting to grow in the next 2

years (66%) to these numbers, we are

talking about a huge, largely untapped,

opportunity for companies working with

SMEs to help them get there with the

help of digital marketing.

At Latitude we are continually building

digital marketing solutions with our

partners that are relevant solutions to the

day to day challenges faced by SMEs, from

white label low-cost SEO to PPC aimed at

SMEs. Is your SME client base part of the

66% that is looking to grow - if so, why not

offer them something to help them do

just that as a service?

To conclude, the demand for digital

marketing amongst SMEs is there.

Therefore, businesses working with SMes need to:

• Work on helping SMEs gain access to

digital marketing

• Educate and instil trust via partnering

with digital experts

• Help sMEs measure RoI

If you enable SMEs to grow, then so will your business.

Although 15 years old, Search remains

at its infancy: it is bound to evolve and

become even more pivotal in our lives

as consumers and marketers. In the last

decade, it has already drastically mutated,

influenced by changes in consumer

behaviours and the intrinsic nature of the

web. This evolution has accelerated in

the last years, and is expected to further

increase its pace with the rise of game

changers like mainstream social search

and new devices like smartphones,

wearables or connected Tv.

In many respects, it is not that surprising

to see conflicting trends in such a

maturing marketing channel. After all,

which teenager does not come with its

contradictions? On the one hand, search

advertising is the driving force behind

the growth of digital advertising spend,

a success built upon its accessibility to

advertisers of all size and background. On

the other hand, no matter how long the

tail of advertisers is and how long brands

have been practicing that discipline, there

is still a lot of education to be conducted

with Small and Medium Businesses.

This research helped surface how certain

myths remain very present in the mind of

SME decision makers and reinforces the

need for the key players in the industry –

search engines, tool providers, agencies

- to continue their educational efforts.

The size of two specific segments, the so-

called Old School & Uninterested clusters,

is clearly outlining the challenge at task:

either deliberately or unconsciously

they are ignoring the profound societal

shift towards digital, with the risk to be

left behind and disappear. Investing in a

website and not promoting is a waste, like

opening a shop in a back-alley and having

no sign pointing to it… How do you expect

to your clients to know about it? As

consumers turn to the Internet to define

their consideration set, to validate your

credentials, to purchase… It is critical to

be present and, more importantly, visible

on the web. When this basic principle will

be embraced by all, then, and only then

will the entire British economy benefit

fully from this affordable, scalable and

accountable marketing lever.

andrew harrisSME Operations Director

Latitude

cedric chambazHead of Marketing Europe

bing ads


ConclusionsSMes are sporadic when it comes to marketing

Marketing is sporadic amongst SMEs.

Although there are some who are

‘leaders’, there are a large number who

either aren’t doing any form of marketing,

or are carrying it out ad-hoc and without

budget. Paid advertising and measuring

effectiveness with metrics are also only

undertaken by a small number. Overall,

there are many SMEs who may find it

difficult keeping up as the world moves

online to a greater and greater extent.

They can’t get left behind!

There’s progress though – some SMEs are

recognising the necessity of marketing

and particularly digital marketing. On the

whole, they’ve been spending more on

marketing overall and digital marketing

specifically in the past year. In 5 years’

time, we expect the number of SMEs

without a digital marketing plan to

decrease significantly as they continue to

see the benefits that it offers.

SEO takes top position for SMEs…

There are a wide range of digital

marketing channels which SMEs could

use to promote their business. However,

currently SEO seems to be viewed the

most positively with the vast majority

considering using it in the future. The

draw of moving up to the top page of

search engine rankings is proving very

alluring and is set to be a key strategic goal

for digital SMEs going forward.

..but PPC encounters challenges

Despite this, PPC – which can accomplish

a similar goal – is less popular. Those who

reject PPC typically fall into three camps

– ‘the cost conscious’, ‘the diminutive’

and the ‘happy as we are’. Each of these

groups have their own qualms with

PPC, but these are caused by a lack of

understanding around how it can be

used and this seems to be leading to

misconceptions which exacerbate the

challenges associated with it. In fact – PPC

should be one of the foremost marketing

channels considered by SMEs due the

flexibility and control it gives them in

managing their marketing. PPC should be

the way forward for a lot of SMEs.

SMEs struggling to measure marketing effectiveness

While SMEs have great plans in investing

in marketing and growth, it’s surprising

to see how few of them are taking

measurement seriously. They are missing a

trick by not investing in ensuring they are

tracking marketing effectiveness efficiently

and ensuring they are getting the most

out of their investment by making changes

to activities based on how well they are

working.

..and finally

As we alluded to, every SME is different

and each one will need a digital marketing

strategy made-to-measure for their

business. The benefits that are realised

from it once implemented though will

be numerous and will be key in enabling

SMEs to compete on a large scale in the

coming years.

We’re convinced that digital is the way

forward for SMEs and that PPC should play

a big part in this for many - we’d love you

to let us know what you think though.


Share your thoughts and experiences by tweeting us at @Latitude_Group or drop us an email on [email protected]


About LatitudeLatitude Digital Marketing is a leading digital marketing agency with expertise in SEO, PPC, conversion analytics, social media, affiliates and display advertising.

Digital marketing is what we do. Since setting up in 2001, Latitude has worked across various sectors, including retail, gaming,

travel and finance using a mix of digital marketing channels to solve various marketing challenges for our clients.

However, we’d like to think we're not just another digital marketing agency. Digital marketing is not just about the technical

stuff. It's also about meeting (and going beyond) our clients' expectations in unexpected ways.

We start with our client’s individual requirements and business/marketing objectives and then build a strategy around them.

About Circle ResearchCircle Research is the B2B market research company. Circle was founded in 2006 as an alternative to traditional research agencies

who are consumer focussed and deliver bland, uninspiring, academic outcomes.

Based in London, we work globally with ambitious B2B firms, including half of the Top 10 B2B Superbrands.

Learn more at www.circle-research.com. follow us @circle_research

About Bing Bing helps you turn information into action, making it easier to go from searching to doing.

Get In Touch:

[email protected]

0845 212 223www.latitudegroup.com

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