Can Small Businesses really Utilize Digital Marketing Profitably?

The digital marketing industry has taken off like a rocket in recent years. In fact, from 2015 to 2016 digital advertising spending increased by 20%, from $168 billion to $195 billion worldwide.

Huge corporations now put considerable time and effort into their digital presence and overall strategy, and for them, it is certainly worth it. After all, Millennials are now the largest generation in American history, with an estimated 75.4 million Millennials as of 2015.

Even more importantly, Millennial purchasing power is set to exceed $200 billion in 2017 alone, a number that will only grow in the coming years.

With Millennials paying more and more attention to digital mediums, and being influenced less and less by traditional marketing channels like billboards, sponsorships, and television/radio advertisements, capturing the attention (and discretionary dollars) of Millennials will require effective use of digital marketing strategies.

While Millennials are certainly a primary audience for digital marketing, the fact is that all age groups are increasingly utilizing digital devices, and particularly mobile devices.

In fact, an estimated 74% of individuals ages 50-64 own a smartphone (not just a cell phone), while 42% of individuals 65 years of age or older own a smartphone as well. In addition, 11% of individuals ages 50-64 use a smartphone as their only Internet-capable device (meaning no landline or broadband connection at home), and even 7% of the 65+ demographic falls into this category as well.

Hopefully we have well established that digital marketing is absolutely essential for capturing the attention and patronage of a rapidly growing majority of the population. The real question for small business owners is whether the fast-paced and ever-evolving world of digital marketing can be adapted to their business without spending obscene amounts of money on hype and buzzwords.

Smaller companies need to adapt digital marketing for their business

There is no question that most small businesses can and should be using digital marketing. There is simply no better way to reach a highly targeted audience in a cost-effective way and with highly measurable results.

However, that doesn't mean you should go sign a 12-month $120,000 contract with your nearest digital marketing agency and hope for the best.

Unlike large corporations, money invested by a small business can have a significant impact on the business, including monthly cash flow and even day to day operations.

That means it is important to be smart about how a small business digital marketing campaign is rolled out.

1. Choose one Primary Objective to Start With

One of the biggest problems that small businesses face when considering a digital marketing strategy is the abundance of options.

From social media marketing, to email outreach, to paid advertising, to long-term organically ranked content marketing strategies (and others as well), there are plenty of places to spend that digital marketing budget.

The problem is that in most cases each of these strategies requires significant focus and a dedicated budget. If a small business tries to do everything at once, they'll simply be stretched too thin and miss out on the benefits.

Instead, it's worthwhile to select one primary objective to start with. It's ok to have secondary objectives (which can later evolve to primary objectives), but there should be one goal to focus on for the first few months of a new digital marketing campaign.

Depending on the business, the "correct" objective will vary, but common examples include brand awareness, lead generation, customer service and engagement, and sales.

Each of these have specific measurable criteria that can be used to determine how successful the campaign has been, which helps a small business justify the expense.

2. You Get What you Pay For

As the digital marketing industry has grown, the number of "agencies" has exploded as well.

While there are certainly some excellent agencies and startups out there, there are also far too many agencies which are either designed to separate you from your money without providing fair value in return, or are simply not qualified to provide the services you're looking for -- even if they don't realize this is the case.

In general, if there's an agency offering what seems like a large number of services for a small monthly retainer, you can be almost guaranteed that they either won't be providing all those services without significant upsells down the line, or won't be providing those services in a meaningful and high-quality way.

This isn't to say go for a highly-expensive agency, but rather find a middle ground with an agency that seems to provide a reasonable amount of work for the amount they charge.

It's worthwhile to shop around for an agency that specializes in the specific area you're interested in. Agencies that specialize tend to be more on the cutting edge of their specialty than an agency that tries to master all aspects of the digital marketing industry. 

3. Small businesses Should Start with PPC

If a small business isn't sure where to start, a simply pay-per-click, or PPC, campaign is often the way to go.

PPC campaigns are designed to quickly generate a return on investment, and also quickly generate analytics and results in general.

They are expensive to run in the long-term, but are a great way to gain an understanding of digital marketing as it relates to your specific business.

Longer-term, organic search engine ranking through content marketing is frequently a high-ROI option, however it can take a few months to fully realize its potential.

The bottom line is that digital marketing is a great idea, and arguably an essential idea, for the long-term success of a small business.

Just be sure to make smart decisions about how and where to begin your digital marketing campaign, and find an agency or consultant that works with you and your specific needs.

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