The open internet is open for (small) business

The U.S. is home to over 33 million small businesses, and they’re vital to the economy. With Small Business Saturday around the corner, millions of them are looking to attract new customers through digital advertising — but many may not know the ins and outs.

“They’re afraid of how much it’s going to cost them [and] they really don’t have a lot of knowledge on how to do it,” says Ricardo Lasa, CEO of Kliken, which helps micro businesses carry out a digital strategy.

Small businesses, defined by the U.S. Small Business Administration as having fewer than 500 employees, account for 99.9 percent of all American businesses and over 43 percent of the country’s gross domestic product, according to the U.S. Chamber of Commerce.

And by their very definition, they are often strapped for resources. Forbes Advisor reports nearly 82 percent of the small businesses in the U.S. don’t have any employees, and just over 15 percent have fewer than 20. The through line is that many may need help navigating advertising on the open internet. In the case of the smallest businesses, some didn’t even have a website before the pandemic, Lasa says, which accelerated the need for a digital footprint.

Some small-to-medium-size brands or agencies have “done what’s easy and available,” such as advertising within walled gardens (Facebook, for example) says Mike Wolk, VP of growth at Goodway Group, a full-service digital marketing firm with a dedicated division that supports small-to-medium-size agencies and brands.

But with the help of companies like Goodway Group and Kliken, alongside demand-side platform partners, small businesses can access the tools needed to step outside of walled gardens and advertise on the open internet and across various channels programmatically.

“There’s clearly a lot of growth and opportunity for other areas like CTV [connected TV], digital audio, and digital out-of-home, which we know are extremely impactful marketing channels,” Wolk says. “[Small businesses are] empowered with a much broader toolkit to engage with customers.”

Kliken, for its part, has seen the most growth in clothing stores, real estate agents, house cleaning services, and marketing agencies. The company observed an average sevenfold return on ad spend, Lasa says.

Small-business owners and their teams face an education gap, Wolk adds, so teaching them how to utilize digital ad spend and the benefits of including different channels is key.

"If you're supporting a regional client, it's important to be deliberate in determining which additional channel investments are likely to make the biggest impact, while setting expectations upfront on what to expect in terms of measurement,” he says. “The shift from solely viewing performance through Google Analytics and bottom-funnel channels is often an adjustment for this segment in particular. One benefit is [that] first-party data onboarding has gotten easier, and now there is opportunity to bring first-party data in early to help ensure there is data behind these recommendations.”

Wolk says that small businesses “benefit from lower barriers to multiple formats, premium inventory, and the opportunity to increase touchpoints with their customers,” and now have a lot of access the same shows, podcasts, and channels as the largest brands in the world.

Lasa concurs that first-party data is a powerful tool for small businesses.

“If I have 2,000 customers who have bought on my store, maybe 90 percent of the time they never buy again,” he says. “But now I can build a campaign for those customers and show them, [for example], ‘This is my full collection or Thanksgiving special discounts for existing customers.’ So you can target very effectively.”