July 28, 2016: There’s little doubt that large digital marketers with big budgets have a distinct edge in terms of search advertising (and online marketing generally). These advantages accrue because:
1. Large marketers spend more on campaigns, and therefore reap more actionable data that can be used to optimize them, making these campaigns more efficient.
2. Large marketers have the means to license sophisticated tools, including 3rd party research and campaign management tools, whose yearly costs are often beyond the means of small companies.
3. Large marketers benefit from something called the “brand discount” which arises because their CTRs (click-through rates) are generally higher (all other things being equal), which gives them a higher Quality Score, resulting in lower click costs – and better positions — for important business-driving keywords.
4. Large marketers aren’t typically bound by monthly or quarterly ROI requirements that can cause them to underspend on keywords or audience segments that are in fact good investments when looked at via a more enlightened metric such as LTV (Life Time Value).
Fortunately for smaller digital marketers, these four broad advantages aren’t always fully exploited by their larger competitors. It’s possible – even likely in certain circumstances – that a smart, wily marketer with a limited budget can outperform a larger rival if:
1. The small marketer’s organizational style is more nimble. Didit’s Rachel Antman recently identified three types of dysfunctional organizations that hamper success in a digital PR context: Administrative Autocracies, Obstructive Bureaucracies, and Inclusive Bureaucracies. These sclerotic organizational forms militate against the need to rapidly adapt, develop first-mover advantage in any market, and respond to competitors. SMBs don’t usually suffer from them.
2. The small marketer makes better use of data. Obviously, the mere fact that a large marketer has more data at his/her disposal means nothing if the insights trapped within this data are never mined and put into action. Failure to take full advantage of the data so expensively acquired from Google and other online media sellers is often caused by organizational “siloization” of such data in a way that “the big picture” never emerges. Smaller marketers are generally less vulnerable to this syndrome.
3. The small marketer’s campaigns are better aligned with the market. The keyword-driven marketplaces run by Google, Bing, and now Yahoo/AOL/Verizon are in a state of constant flux. Keyword supply/demand curves are never static, and keyword prices can vary widely by geography, daypart, and scores of other variables. Big competitors with large keyword lists to manage obviously have a much bigger chore to accomplish than those with only a few hundred. The result can be permanent, chronic misalignment of campaign and market. While this condition can also afflict small marketers, having fewer variables to manage presents an advantage, with more thought going into the performance of each ad group and ad unit.
4. The small marketer understands his/her market niche better. Google’s new generation of algorithms, including RankBrain and Hummingbird, are aimed at the difficult problem of discovering the actual meaning of language in order to better deliver intelligent responses to conversational (Q/A-oriented) search queries. This has clear implications for content marketers, who are now obliged to think more carefully about the way prospects and shoppers query them. While some large marketers have thought long and hard about this issue and have produced content likely to satisfy such conversational queries, many have not. Consequently, small digital marketers with a thorough understanding of the informational needs of their micro-audiences – and the ability to produce specific content that satisfies these needs — have a real opportunity.
There’s no question that you’ll be facing an uphill battle when facing off against a competitor with deeper pockets than your own. But by keeping your organization responsive, avoiding bureaucracy, making full use of your data, and completely understanding your market niche so that you can better serve its specific informational needs – you can level the playing field enough to play a truly competitive game.
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