2011 will be known as the year the online advertising industry turned its attention to small and midsize businesses (SMBs). The average SMB, however, will become overwhelmed by the number of new online marketing and advertising tools available this year. The hardest choice for them will be what to focus on and what to ignore.

Small businesses have different types of customers, so every advertising medium is not a guarantee of success for each customer type.

Following is a list of trends that will create the biggest opportunity, and confusion, for SMBs in 2011.

1. Online presence moves to Facebook
I recently saw a print ad with a Facebook address, but without a traditional website URL. Times are changing.

For SMBs, websites are still too complicated to build and update. Just as blogging sites made it easy to publish content online, Facebook is making it easy for small businesses to put their business online. As social commerce takes off, having a Facebook presence will be invaluable.

2011 will be the first year we see successful new businesses with no websites, just Facebook pages.

2. The dawn of the SMB agency arrives

SMBs can't do it all; they need to focus their efforts on their core business. Online marketing is growing in complexity, which creates new opportunity for SMBs but also makes marketing more daunting.

Intermediaries that target SMBs will sprout up to help reduce that complexity. Though many intermediaries will be startups, some will be large media players that already have relationships with SMBs.

I predict that new, large-scale agencies will be formed directly to help SMBs. They will use a model more akin to that of Charles Schwab (with physical, local offices) than a traditional Madison Avenue firm's.

3. SMBs take location-based services seriously, but few will advertise

Foursquare and other location-based services (LBS) are upping their game constantly with business-side features. For example, Foursquare allows SMBs to claim and manage their business page, Yelp focuses on the same, and Google Places reaches out to SMBs with a sales force and incentives.

SMBs need to take ownership of their business pages on such platforms and understand how to use them. Other than paying for access to control their profiles, few will advertise through LBS providers—for now.

4. SMBs finally look at the numbers

For too long, many SMBs have spent advertising and marketing dollars with no real measurement, metrics, or targets in place. Small business owners will finally knuckle down and do the math to answer these questions:

  • What cost is acceptable for acquiring a customer?
  • What is the lifetime value of that customer?
  • What advertising mechanisms are producing results in line with these requirements?

5. Many will try coupon sites and fail

SMB owners are excited about group coupon sites. Many will try them— unsuccessfully—for the first time this year (especially as group-coupon platforms become self-service).

Coupon customers will be overloaded with an increase in offers and coupon players, and they will start to ignore offers other than those of brands they already buy from.

Couponing will be transformed from a way to acquire new customers to a way to drive repeat business.

6. SMBs will focus on video, YouTube especially

Consumers are increasingly flooded by blog content, news articles, and reviews. Humans simply can't consume that much text. Consumer preference will therefore shift toward video as the primary way to learn about products and services.

Producing videos of high-enough quality for a website is only as hard as getting a Flip camera and some video editing software. Video will emerge as a requirement for SMBs, especially when they discover YouTube Promoted Videos, where the cost-per-click is one-tenth that of paid search.

I predict that YouTube will release a scaled-down version of its "branded channel," which is now priced too high for SMBs. SMB channels will allow SMBs to store videos, provide product and service materials inside the YouTube interface, and highlight links to their websites.

YouTube will try to do battle with Facebook to become the new "home" for SMBs.

7. SMBs will be the biggest consumers of crowdsourcing

SMBs will rely on crowdsourcing marketplaces to perform more advertising- and marketing-related tasks, such as paid search, logo and ad-creative development, display advertising, social media, or content production.

Pay-by-the unit or pay-for-performance crowdsourcing options will become attractive to SMBs looking for quality help without large upfront costs.

Trying a little of everything and not enough of a few things will leave many SMBs questioning the value of online advertising. The smart SMBs will pick a small set of trials (within online advertising) to gather enough data to understand what works for their company, and choose based on that data.

Sign up for free to read the full article. Enter your email address to keep reading ...


Niel Robertson is the CEO and founder of Trada, the world's first crowdsourced PPC marketplace. He is also a founding member of the Crowdsortium, an organization for crowdsourcing companies and organizations. Find Niel at Trada.com/blog and @nielr1 on Twitter.