Marketing is about two things. Psychology and economics. And while at its core the human psychology never changes, the factors affecting it do. And so do the economics. Today, we’re counting down the top five marketing trends for small businesses in 2018.
These trends are also our prediction for how the seemingly chaotic and bizarre world of marketing and advertising will act in 2018. Let’s get started.
Trend number five: Media will continue to get even more expensive.
That’s right folks. While we wish we had good news for you, the truth of the matter is that competition is heating up on almost every advertising platform, especially online. Whoever you’re targeting and trying to reach, there will more and more advertisers willing to pay the top-dollar to reach them, and to show them their messages.
More advertisers not only drive up prices for media inventory, but also drive the market to saturation. Which means your audience will continue to get less and less impressed, and interested, in what you have to say.
In other words, if you don’t change anything in your marketing mix of market, message and media… your cost of acquiring a new lead and a new customer will go up by as much as forty percent by the end of 2018.
Trend number four: Giants will continue to get bigger…
2016 and 2017 have been years of big ticket acquisitions and mergers. From Whatsapp and Instagram being acquired by Facebook, to Whole Foods being swallowed whole by Amazon, there has been plenty of consolidation and aggregation across industries.
And that trend will continue in 2018.
The big retailers and e-commerce giants will continue their unhinged expansion plans… and that’s scary news for any small business owner. They have the economies of scale that you, the entrepreneur can never have… and they have low-interest capital ranging in Billions in pure cash. Which you most likely do not have.
So if you are a small or medium enterprise owner, the competition is going to get even more stiff than it has been.
And since customer loyalty does not exist for commodities and most products, there’s someone else out there with a deeper pocket… who’s completely happy to undercut you by another 10%. In other words… the race to the bottom will accelerate. While it’s great from a consumer’s point of view, it’s utterly devastating from a small or medium business owner’s point of view.
Trend number three: Commodification of everything from products to advertising media itself
With the rise of programmatic advertising platforms, even ad space or inventory has become a commodity. Of all the products in the world, attention is one of the most expensive commodities there is to buy or attract… and it will continue to get even more expensive regardless of who your audience is.
Of course, all the mass-manufactured products are already following a race to the bottom.
But this is as much good news as it is bad…
If you are a small or medium business owner or leader… if you are an entrepreneur, then buying adspace has never been easier. No longer do you have to sign month long contracts with four, five, or even six figure minimum commitments. No longer do you have to deal with pesky middlemen. No longer do you need to worry about wasting your money on a failed marketing message or medium.
Today, you can test an ad for as little as five dollars. And you can stop running any ad with the click of a button. You don’t deal with middlemen, and no one’s driving up prices artificially.
In fact, on SiteScout alone… which is a buyer-side remnant inventory aggregator, you can buy billions of impressions for your ads each day. In multiple formats and sizes. And you can test your ads for as low as one dollar, if that’s what you want.
Your only competition is other advertisers. And it’s a purely capitalistic and holistic competition. If your ad can outperform an industry leader’s, or a giant’s ads by 1x… then you can reasonably expect to pay fifty percent less money for your traffic than them. Regardless of how their total budget stacks up against yours. The playing field is as level as it can be.
Trend number two: Rise of the small indie brands is here
While customer loyalty based on supply economics alone is dead… given that there are dozens if not hundreds of suppliers for just about everything they can buy… customer loyalty is not only well and alive when it comes to brands, but also on the rise for independent brands.
You don’t have to be a giant industrialist anymore to be able to create a brand. In the modern world, the backbone of your brand can quite as well be a niche website with a consistent and regular content production schedule.
In fact, the phrase “Youtube money” comes to mind. A six year old kid who unboxes little gizmos and toys on video everyday just made north of six million dollars due to his enormous fan following.
And that followership is neither a fluke, nor an accident. Influencers and brands have cropped up in all kinds of industries and niches. New industry leaders have not only emerged using modern content publishing platforms like Youtube and Wordpress… but have also created brands around their passion and work.
And there are only two things that are common across the board with these influencers and “smart brands”.
First, their consistency when it comes to publishing new content. No matter what media and platform combination they choose, they start publishing regularly and they keep at it consistently.
And second, they don’t do “metoo” campaign.
Their products are unique, and their offers are unique. Not something that you can pick up on Amazon for a fifth of the price. And they do get takers.
They attract the highest quality buyers. People who are the least price-conscious, and most loyal to their brands.
If you are a small or medium business owner or leader, this is your shot at redeeming and elevating your business beyond not just your local or immediate competitors, but also at insulting yourself and your brand from the race-to-the-bottom economics.
Trend number one: Small business acquisitions will rise exponentially over the next decade
Large businesses getting acquired by other large businesses or merging together into one entity is nothing new. It has happened for ages, and will continue to happen.
What is new is how many small businesses… established and profitable, but small businesses are available for sale. And how cheap they really are.
The P/E ratio… or the price to earnings ratio for an average company on the stock market varies between eighteen and thirty, if not much more.
Which means that a stock that you buy for $1000 produces thirty-three to fifty-five dollars a year in appreciation and dividend combined. That’s roughly 3% to 6& return annualized, considering only the purely profit-generation metrics for any given company.
But, the same proportions just don’t hold true when the scale is much smaller.
A small business producing less than one million dollars a year can be had for a P/E (or price to earnings ratio) of 2.25 to 2.5. In other words, you can acquire a small corporation producing a million dollars a year in profits can be had for as little as 2.25 million dollars.
The reason for this disparity is because the small business scene is a buyers’ market. There are far too many small businesses for sale on the market, but there are very few takers. Industrial buyers, private equity firms and big companies have no interest in buying businesses that tiny. From their perspective, it just doesn’t make sense, since the numbers are so small.
And then there are the demographics.
Baby boomers are now retiring. There are roughly sixty-five million of them… passing down their business assets to only 44 million people in the following generation.
And given that the current business trends in America are leading younger people to abandon capitalism as a core-philosophy, it’s no surprise that only one in thirteen small businesses that gets listed for sale ends up getting acquired within two years.
Which means… this is an excellent time for you to grow your business through acquisitions. It has never been easier or cheaper to acquire a small business along with all their assets… including customers and client contracts apart from equipment, real estate, furniture and furnishings.
So, if you have a competitor who’s been killing you in the marketplace for a while… talk to them and see if they are open to selling their organization altogether. Chances are, their answer will surprise you.
Small business acquisition opportunities are clearly right at the top of our top five marketing trends for small businesses and medium enterprises in 2018, and beyond.
By the way, if you are interested in growing your business through acquisitions, click here to get in contact with us. We specialize in small business mergers and acquisitions, and whether you are just open to considering this idea… or you’re at the valuation stage and need help with that…. Or you need us to put together an entire deal for you, get in touch with us and let us know. We can help with individual stages ranging from prospecting, identification, communication, valuation, financial modeling, agreements and legal, financing and closing… as well as management and integration of processes post-closing. We can also help with the entire process.
So those are our picks for the top five marketing trends for small businesses in 2018.
Do you agree with our list? Let us know in the comments below.
If you have a comment, question, review, complaint or suggestion, leave a comment below.
P.S. On behalf of our entire team here at Westernston, I wish you and yours a very productive and prosperous 2018. Happy new year.