The digital marketplace is undergoing a cannibalisation that has small-business owners facing more competition than ever. But there are still ways to cut through the noise.
The government’s SME Recovery Loan Scheme was extended until the end of June and was designed to support the economic recovery and provide continued assistance to small businesses dealing with the economic impacts of COVID-19.
Across the country, small businesses have been tapping into the scheme to receive financial assistance, in a bid to combat the recent Omicron wave and capitalise on the mass migration to online shopping. Last year, online shopping increased 36 per cent, year on year, and showed a whopping 114 per cent increase over the same period in 2019. While online shopping was already growing, the pandemic has accelerated its adoption.
However, this mass migration is causing unintended consequences and making the competition small businesses face more fierce than ever. With almost every business now having a digital footprint, there’s an increased demand for ads, resulting in an increasing price for businesses to play.
Likewise, the measurement of advertising has changed and Facebook no longer counts the measurement data from Apple devices on iOS. In response, the big advertisers have invested in ways to adapt; however, the leaner teams have not.
This cannibalisation of the digital marketplace means SMEs need to explore how they can leverage other avenues to reach their online customers.
Staying competitive amidst surging ad prices
New research has revealed that marketing budgets are at their lowest in nearly a decade and the impacts have been felt by small businesses, which are already more limited in terms of resources, budget and manpower. Yet, by the same token, global ad prices for Facebook have risen an average of 47 per cent, year on year.
“Better collecting and managing of identifiable customer data will help businesses wean themselves from their reliance on cookies.”
Businesses have made the most of increasing screen time throughout lockdowns by reaching customers in the palm of their hands. Booming return on investment during the pandemic has made eCommerce businesses willing to pay increased ad prices, as they have been seeing strong consumer buying behaviour.
To overcome the soaring prices and increased competition, however, businesses must be strategic with marketing budgets to get the best bang for their buck. By better leveraging their customer data, SMEs can combat the loss of data from iOS devices and maximise media spending by creating more memorable marketing experiences to help target the right audience and cut through the clutter at just a fraction of the price.
Leveraging enriched data for success
The average Australian spends 5.5 hours a day on their phone, so there’s more data to capture than ever before, yet a lot of digital cookie-based data has disappeared. Better collecting and managing of identifiable customer data will help businesses wean themselves from their reliance on cookies.
Suppression is an advanced audience targeting tactic that businesses can use to better leverage their data. It involves removing specific people or groups from your ad campaigns. By reducing the amount of repetitive or irrelevant ads you serve to your customers, you can improve your brand reputation, increase marketing effectiveness and, most importantly, eliminate wasteful ad spending.
In other words, if you’re paying to put ads in front of people, then you want to make sure you’re not putting those ads in front of people who will never convert. Audience suppression can help you avoid wasting precious funds on unqualified prospects or damaging customer relationships with irrelevant messages.
So, how can SMEs adapt to the highly competitive digital market? It starts with understanding external factors, keeping a finger on the pulse of evolving trends and platforms consumers are spending their time on and applying these insights to your overall business strategy. However, there’s no one-style-fits-all approach when it comes to marketing, and the strategies that work for one SME might not work for another, which is why the ability to collect and analyse data quickly, in real-time, to discover the specific trends that will be most important to your success is critical.
This article first appeared in issue 36 of the Inside Small Business quarterly magazine
