SME Report-FINAL-web

ThinkWorks
2015
October 2015
the digital SME
THOUGHT LEADERSHIP SPARKING EXCEPTIONAL RESULTS
Focuson
Using digital marketing
to fuel growth
In partnership with:

LATITUDE | THINKWORKS | the DIGITAL SME 2015 | 2
Contributors
Andrew Harris
SME Operations Director
Latitude
Cedric Chambaz
Head of Marketing
Europe
Bing Ads
Salla Venalainen
Marketing Manager
Latitude
Emma Rose
Graphic Designer
Latitude
Jeff Millington
Business Development
Manager
Latitude

Contents
It's a Digital World
Respondent Profile
The SME Spectrum: Uninterested to Advanced
What’s Holding Back the Digital Tide?
• The Missed Opportunity
SEO Rising to the Top
Drivers of SEO Adoption
Social Media: Overly Organic?
Unpicking PPC Myths
• The Cost Conscious SME
• The Diminutive SME
Tomorrow’s SME Success Stories Are Those Who
Invest in Digital Marketing Today
The Search Industry - An Industry Perspective
Conclusions
About Latitude
About Bing
About Circle Research
04-1011-1516-192224
16
04
07
facebook.com/LatitudeDigitalMarketing
@Latitude_Group
20-21

W
e live in a digital world. The trains we commute on are
no longer dominated by the rustling of newspapers but
the glow of phones and tablets; no longer do we wait
until a certain time in the evening to make a landline call but instead
‘WhatsApp’ for free whenever we like. Perhaps if you’re turning 100
any time soon, you might even receive a congratulatory Instagram
from the Queen rather than the traditional telegram?
It’s not just our ‘consumer’ lives that are being affected. In
the world of business, digitisation is seen by many as the
‘ultimate leveller’, enabling the ‘new-guy’ to compete with the
long-established incumbent. Every business now has access
to seemingly unlimited information, cheap computing power,
open-source operating systems and much more. This means that
in today’s world, the SME is equipped more than ever before to
become a real challenger.
One aspect of business life that has changed for good as a result
of digitisation is marketing. Within this world there are numerous
channels through which companies can reach their customers
and approach prospects. With billions of online searches
happening every day, the search engine market is arguably now
the most important marketing channel. And within this context,
phrases like ‘SEO’ and ‘PPC’ have been adopted into the common
parlance of ‘marketing speak’.
But how well have SMEs adapted to the era of digital marketing?
Is it still true that all SMEs lag behind when it comes to digital
marketing adoption or is this now a thing of the past? In this
report, we explore the current marketing activities of SMEs,
trends within the industry and uncover how to optimise a digital
marketing strategy to turn today's SMEs into tomorrow’s success
stories.
We hope you enjoy the report and would love to hear from
you. In fact, why not tweet us your thoughts @Latitude_Group
or @bing?
It’s a Digital
World
SEO:
Search engine optimisation (SEO) attempts to get your
website towards the top of search engine results for specific
phrases
PPC:
Pay per click (PPC), otherwise known as Paid Search, is a
way that allows businesses to display adverts within search
engine results and only pay a fee if their advert is clicked.

T
he Digital SME 2015 report
is based on an online survey
of 311 marketing and
advertising decision makers in UK
SMEs. The research was conducted
during August and September 2015.
It was sponsored by Latitude Digital
Marketing and Bing, and conducted
by Circle Research.
The results were split across a
wide range of industries and
represented all different sizes of
SME including; Sole traders, Small
(1-50 employees) and Medium (51+
employees).
Respondent Profile
{This report is based on an online survey of 311 marketing
and advertising decision makers in UK SMEs.
Figure 1: Industry of respondents
Figure 2: Company size of respondents
75
56
65
39
35
41
Sole Trader Small Medium
Sole trader 2-4
employees
5-10
employees
11-20
employees
21-50
employees
51+
employees
Professional services
Technology, communications, media & services
RETAIL AND WHOLESALE
CONSTRUCTION, MANUFACTURING AND UTILITIES
hospitality and travel
EDUCATION
BANKING, FINANCIAL SERVICES OR INSURANCE
healthcare
transportation
FMCG
GAMING AND GAMBLING

The SME Spectrum:
Uninterested to Advanced
S
MEs are ambitious. Whether
excitable start-ups or established
businesses, the majority - 66%
- say they want to grow over the next 2
years with only 5% planning to downsize.
Vital to achieving this growth will be
developing an efficient marketing strategy
that builds brand awareness and promotes
products and services.
Within this context though, the current
use of marketing amongst SMEs is very
mixed. Despite frequent claims that
‘SMEs don’t get marketing’, nearly half
(43%) have in fact truly embraced it and
now have a formal marketing plan in
place. However, that still leaves almost a
quarter (23%) who do no marketing at all
and a further one third (34%) who only
conduct marketing on an ad-hoc basis
‘when they have spare time’. In addition
to this, less than half of those who do any
form of marketing actually have a budget
set aside for it.
When it comes to digital marketing, SME
activity is once again sporadic. Of those
who do any marketing, two-thirds (69%)
also do digital marketing, but only half of
these (36%) have a digital marketing plan
in place and a further one third (31%)
don’t do any digital marketing at all.
Overall, there is no such thing as ‘the
typical SME’. Instead, SMEs span a wide
spectrum from those who are completely
uninterested in marketing right the way up
to the very advanced.
Based on their current marketing
behaviour, we can divide SMEs into six
distinct groups. Which one do you fit into?
{
The majority of SMEs - 66%
- say they want to grow over
the next 2 years with only
5% planning to downsize.
14%
Grow rapidly
52%
Grow somewhat
29%
Stay the same size
5%
Downsize
Figure 3: SME growth projections

Figure 4: Prevalence of marketing activity amongst SMEs
DO MARKETING WHEN
WE HAVE THE TIME
DON'T DO any
MARKETING
HAVE A MARKETING
PLAN
HAVE A DIGITAL PLAN
DO DIGITAL WHEN WE
HAVE THE TIME
DON'T DO
any DIGITAL
43%
34%
23%
Of those who do marketing
36%
33%
31%

SME Marketing Behaviour:
The Six Groups
Leaders (19%) – These SMEs have fully
embraced digital marketing with formal
plans laid out. They also have a digital
budget to ensure things actually get done
and not just talked about.
Close Followers (10%) – Similar to
‘leaders’, these SMEs have an overall
marketing plan but are not quite as
advanced in ‘digital’ - only doing it when
they have the time. They also often lack a
formal digital budget. It is likely that as the
benefits of the ‘occasional digital’ come to
the fore, these close followers will invest
more heavily.
Cheap followers (7%) – These SMEs
have plans for both offline and digital
marketing, but have no budgets in place
to guarantee execution. Spending is
done ad-hoc or is focused entirely on
‘free’ channels. These SMEs have good
intentions but may not be maximising
digital benefits.
Casuals (14%) – Casuals are not opposed
to marketing however it’s not a top
priority. They only do it when they have
the time and very few have a budget.
Old School (25%) – These businesses do
marketing activity but are yet to move to
digital, sticking to offline channels instead.
Uninterested (24%) – This group say
‘no thanks’ to marketing, claiming not
to do any marketing activity (or at least
not realising that they do). This group
often feel like the David struggling against
Goliath and/or are typically less interested
in growth.
Whilst an SME may fit into any one
of these groups, there are three
characteristics that tend to have a heavy
influence; size, growth plans and industry.
{
Whilst an SME may fit
into any one of these
groups, there are three
characteristics that tend to
have a heavy influence: size,
growth plans and industry.
Leaders
19%
old school
25%
uninterested
24%
CLOSE
FOLLOWERS
10% CASUALS
14%
cheap
FOLLOWERS
7%
Figure 5: Six groups of SMEs

Company Size: Even amongst SMEs,
business behaviours vary widely based
on the number of employees they have.
Sole traders are, of course, very different
from 100-staff outfits in numerous ways
– including when it comes to marketing.
In this case, the larger you are, the
more likely you are to be in the ‘leaders’
group. Only 17% of sole traders have a
marketing plan compared to over 66%
of medium-sized companies. Similarly,
only 17% of sole traders who do marketing
have a digital plan compared to 55% of
medium-sized companies. This all adds up
to 43% of medium-sized companies being
‘leaders’ compared to just 5% of sole
traders.
Growth appetite: Similarly, there are
big differences between SMEs that have
growth as a key priority of their business
and those who don’t. Those who are
looking to ‘grow rapidly’ realise that
they need to be on the ball with their
marketing and have therefore adopted
digital marketing at a much greater rate.
47% of these rapid growers are in the
‘leaders’ group compared to just over 5%
of those who are looking to downsize or
stay the same size.
One final variable that also has an impact,
albeit less so, is industry. For example
‘Tech and Comms’ companies tend to have
a more ad-hoc approach to marketing
with a quarter falling into the ‘casual’
category whereas Professional/Financial
services and Construction/Manufacturing
are more ‘old school’ in their approach
with lower digital uptake. On the flip side,
unsurprisingly, Retail/Wholesale is the
most advanced industry with one third of
SMEs in this sector falling into the ‘leaders’
or ‘cheap followers’ categories.
Figure 6: Categories by company size
Figure 7: Categories by growth projection
Sole trader
Grow
rapidly
Grow
somewhat
Stay same
size
Downsize
Leaders
Leaders
Close followers
Close followers
Cheap followers
Cheap followers
Casuals
Casuals
Old school
Old school
Uninterested
Uninterested
Small
Medium
14%
18%
43%
13%
13% 8% 8%13% 18%
47% 9% 16% 9%14%
11% 15% 24% 18%
28% 46%
17% 13% 9% 26%
30%
14%
17%
36%
50%
18%
15%
14%

What’s Holding Back
the Digital Tide?
T
here are many digitally-savvy SMEs
out there, but considering the
importance of digital marketing,
why do only half of SMEs put digital at the
top of their agendas? On the surface you
might think that it’s because of the number
one way in which SMEs believe their
clients typically find them; through word of
mouth (75%) – perhaps digital marketing is
unnecessary for SMEs?
This couldn’t be further from the truth.
Nearly two thirds of SMEs (62%) say that
customers have also found them through
search engines, over one third (37%) via
social media and just under one third
(31%) through email marketing. That’s far
from insignificant and in fact considerably
outweighs ‘traditional’ methods of
advertising such as flyers and leaflets
(18%) and adverts in publications (21%).
{
Nearly two thirds of SMEs (62%)
say that customers have also
found them through search
engines, over one third (37%)
via social media and just under
one third (31%) through email
marketing
75%
62%
37%
31%
22%
21%
18%
10%
Word of
mouth
Online
adverts
Search
engines
Magazines
or other
publications
Social media
Flyers/
Leaflets
Email
marketing
Telemarketing
Figure 8: How customers discover SMEs

The Missed Opportunity
I
n fact, the number of customers that
SMEs attract through digital channels
may even be higher than they report,
as only 34% of SMEs currently measure
marketing effectiveness. Instead, they use
a ‘gut-feel’ approach to determine what
works, and what doesn’t; an approach
that may be littered with misperceptions.
For example, many customers may first
encounter an SME online but, due to a lack
of tracking, the SME could be completely
unaware of this.
Measuring Effectiveness
34% of SMEs measure the effectiveness
of their marketing… so who are they?
Generally they are those who are looking
to grow their business (68% of these have
measurement metrics). They are also
most likely to be in the retail or wholesale
industry (which is very sales-led).
How SMEs go about measuring marketing
effectiveness depends on the size of
the company. To begin with, smaller
companies are less likely to measure
effectiveness in general, but there’s
a difference in how they go about
measuring too. With sole-traders and
small companies, the key metrics used
are the sales value generated and the
number of leads generated. However,
in medium sized companies, customer
surveys and web analytics are leveraged
more frequently and become the primary
source of measurement.
sole trader small medium
Leads
generated
64% 62% 63%
Sales value
generated
55% 73% 69%
Customer
surveys
36% 33% 81%
Analytics
software
27% 55% 75%
This means there may be a huge missed
opportunity as, without measurement, SMEs
won’t know how effective their digital channels
and their overall marketing activities are or
could potentially be. Even a good number of
the ‘old school’ and ‘uninterested’ are telling
us that they get customers from search – 57%
and 42% respectively – despite having no
digital plan! Getting the odd customer via an
unpromoted website is great, but just imagine
how many more customers they might get
through even just a little digital marketing?
Real digital marketing engagement, with
proper measurement could send SMEs soaring.
"There may be a huge missed opportunity here,
as without measurement, SMEs won’t know
how effective their digital channels are or could
potentially be."

D
espite a rather scattered current
adoption, digital marketing
is increasingly registering
on the SME radar. Nearly one quarter
have significantly increased their digital
marketing expenditure over the past
year – more than the 18% said to have
significantly increased their marketing
expenditure overall – showing that
increasing resource is being pooled
to digital.
So which digital channels in particular
will this investment be hitting? Delving a
layer deeper, we discover that awareness
of digital channels amongst SMEs is
not poor but nor is it great. Whilst the
large majority of SMEs are aware of email
marketing, there are a quarter who aren’t
aware of SEO, a third who are not aware
of PPC and 40% who are not aware of
paid social.
T
he first step to accelerating SME
digital marketing activity must
therefore be for SMEs to simply
get to grips with the channels available.
However, with only 29% of SMEs currently
knowing who to turn to if they want to
find out more about a particular channel,
this education activity will have to be
proactive.
Usage of digital channels follows a similar
pattern to awareness with email marketing
the most prevalent (46%) followed by
organic social (39%), then SEO (35%),
then PPC (25%). Without a shake-up, this
pattern also looks set to continue in the
future with a similar level of SMEs saying
they have plans to take up each channel
over the next 12 months.
{Whilst the large majority of SMEs are aware of email marketing, there
are a quarter who aren’t aware of SEO, a third who are not aware of
PPC and 40% who are not aware of paid social.
SEO Rising to the Top
Figure 9: Awareness of marketing channels
Figure 10: Who would SMEs ask to learn more about channels?
Figure 11: Current channel usage and future plans
Email marketing
78%
76%
68%
63%
60%
60%
5%
Search engine optimisation
Paid search
Online display advertising
Paid social media
Organic social media
marketing
None of the above
29%
44%
28%
Search engine 18%
marketing company/expert 18%
Web dev company/expert 14%
Specialist search agency 12%
IT provider 8%
Personal contact 7%
I would know exactly who to ask
Use currently
Plan to use next year
I know the type of organisation to ask, but not a
specific organisation
No, I wouldn't know who to ask
Email marketing
Search engine optimisation
Paid search
Online display advertising
Paid social media
Organic social media
marketing
46% 11%
14%
15%
8%
7%
10%
39%
35%
25%
19%
17%

T
his picture could change
significantly if awareness and
understanding of channels
improves. Of those not currently using
each channel, nearly three quarters (72%)
say they are considering implementing
SEO and more SMEs would like to find out
additional information about SEO than
any other channel. If SME knowledge and
confidence in SEO increases, adoption
of SEO could outstrip email marketing as
SMEs’ go-to digital channel in the future.
Channels SMEs would like to know
more about
SEO 47% ORGANIC SOCIAL
MEDIA 37%
PPC 28% PAID SOCIAL
MEDIA 27%
Channel Currently not using
SEO 72%
Organic Social Media 62%
Email Marketing 61%
Online Display 58%
PPC 55%
Paid Social Media 52%

Drivers of SEO Adoption
S
EO appears to have struck a chord
with SMEs – so what’s so great
about it?
The benefits of SEO are seen to be
widespread. We examined four digital
channels in detail – SEO, PPC, ‘Organic
Social’ and ‘Paid Social’ – to discover
which were considered the best for
achieving a variety of marketing aims. In
six out of eight categories, SEO claimed
top spot.
As a ‘free’ form of marketing based on
everyday consumer technology, it is
perhaps no surprise that ‘Organic Social’
came top in ‘easiest to manage’ and
‘cheapest’. However, in every other area,
SEO was considered the number one: it
creates the most leads and the highest
quality leads; it is best at raising awareness
and is easiest to understand; plus it
represents the best use of time and is best
value for money.
At this stage, you may be wondering why
it is that SEO seems to come out so much
higher than PPC? Isn’t PPC also a good
way of promoting your website across
search engines?
Quite simply: yes it is! However, as we will
see on page 16, there are some common
misperceptions plaguing the world of PPC
and resulting in missed opportunities.
1. Creates the most leads: SEO
2. Creates the best leads: SEO
3. Best at raising awareness: SEO
4. Easiest to understand: SEO
5. Best value for money: SEO
6. Best use of time: SEO
7. Easiest to manage: Organic Social
8. Cheapest: Organic Social

Social Media: Overly Organic?
Before we look at PPC and the
misconceptions associated with it though,
let’s examine Social Media in a bit more
detail. SEO may be where SMEs are
looking to for the future but currently
Organic Social is slightly more prevalently
used (39% vs. 35%). It’s obvious why
SMEs like Organic Social, with 41%
agreeing that it gives good ROI and 40%
agreeing that it was a reliable way of
generating new business (compared to
just 22% disagreeing for each).
There are two ways that Social Media
can be leveraged – organic or paid – but
currently SMEs are overwhelmingly more
likely to favour organic. Firstly SMEs say
that organic is much easier to understand
and cheaper than the paid counterpart;
but more interestingly, they also believe
that it creates more, and better quality,
leads.
However, when it comes to organic social
media, the biggest challenge for SMEs
is that they are ‘unsure of the benefit’.
This, coupled with the fact that few SMEs
are measuring effectiveness of marketing
activities, suggests that it’s very unlikely
they truly know that organic social creates
more sales and better quality leads.
As Andrew Harris, SME Operations
Director from Latitude explains, these
current perceptions seem to be down to
a lack of understanding about Paid Social
and its benefits, and SMEs may be missing
a trick by dismissing it!
In 2014, Facebook adjusted its algorithm
which downgraded potential organic
reach on its platform. This adjustment
was to encourage businesses to
investment more in paid advertising
instead. This was a long-expected move
from Facebook. In fact, a Facebook
blog from June 2012 highlights that a
Facebook page post on average will only
reach 16% of fans.
https://www.facebook.com/notes/facebook-for-business/
sponsor-your-page-posts/10150675727637217
Therefore without embracing paid
social, SMEs need to consider two
points:
1) You cannot guarantee that your
existing fans will see every message.
2) Without paid promotion, it will prove
extremely difficult to grow your fan
base.
A study by Ogilvy, which monitored
100+ Facebook Brand pages, found that
since October 2013 organic reach on
Facebook has declined, down to only
6.15% in Feb 2014.
Since the Facebook algorithm update,
marketers have needed to “pay to
play” to get the most out of their social
marketing. Marketers now recognise
that to truly maximise a brand message
on Facebook and to reach the huge
potential of this very popular platform,
you need to sponsor Facebook Page
Posts.
To highlight the potential here, let’s use
a hypothetical Facebook page for a local
gym in Manchester with 100 Facebook
Fans. An organic post with a special
membership offer is only like to be seen
by an average of 16 fans (based on the
16% average reach highlighted in the
referenced Facebook post above). With a
budget of just £10 per day, a sponsored
post for a special membership offer
targeting Facebook users who are based
in Manchester and are interested in
“gyms” could reach up to 7,000 users.
While other social media platforms still
offer some considerable organic reach,
it’s in the best interest of the SMEs to
begin to invest in the paid opportunities
that exist with the likes of Facebook,
Twitter and other platform for better
reach. The difference with Facebook
in particular cannot be ignored and
highlights the potential for SMEs to
drive business growth via paid social.
*Estimate generated by the Facebook ads platform,
using Manchester and “fitness and wellbeing” targeting
preferences.
There is also a misperception in the
comparison between Social Media and PPC.
Currently Organic Social is being used more
by SMEs than PPC is (39% vs. 25%) and those
not using these methods say they are more
likely to consider organic social than PPC in
the future.
The reason seems to be that SMEs are
focussing on the process rather than the
benefit. Social Media is deemed easier to
use and understand and therefore they
use it more often. However, when it comes
to generating quality leads or sales, PPC
is universally recognised as being very
competitive, if not more suited to the job
than Social Media. Organic Social may be
easy… but what’s the point in simplicity if it
doesn’t deliver!
SMEs that are looking to grow seem to have
cottoned on to this fact as half (50%) use
PPC, compared to just 17% of those who
are looking to stay the same size. SMEs
need to take their eyes off of the perceived
effort and cost (more on this later) and focus
instead on the potential outcomes. Growth
needs new customers, and PPC produces
more sales and better leads than organic
social media.
As we will see in the following
section though, these aren’t the only
misunderstandings that hang over the head
of PPC.
Andrew Harris
Latitude

Unpicking PPC Myths
W
e saw earlier that SMEs are
enamoured with SEO and
that they are often using
Organic Social Media, but they seem less
interested in PPC. Let’s delve into more
detail on why this might be.
For many SMEs they simply feel that PPC
is less relevant to their business (43%).
Reasons underlying this perception
typically group PPC rejectors into one of
three categories:
• ‘Diminutive’ SMEs
• ‘Cost conscious’ SMEs
• ‘Happy as we are’ SMEs
We're a local company
We use word of mouth
SEO works well enough Wouldn't reach our clients
Poor return on investment
It's open to abuse
We're a small company
We're a B2B company
Specialised product for a niche audience
Happy as we are Diminutive Cost conscious

Plugging the Knowledge Gap
59%
48%
33%
18%
12%
3%
H
owever, are these concerns
valid? Whilst many SMEs have
reservations about PPC, there
is simultaneously a tacit admission of a
lack of knowledge. When those who have
not used PPC are asked what would make
them consider using it in the future, the
top factor to emerge was ‘learning more
about how it works’. It’s a common
cliché that we’re scared of the unknown;
accordingly it appears that SMEs would be
much more likely to use PPC if they just
knew a bit more about it.
This is backed-up by the fact that the most
digital-savvy SMEs – the ‘leaders’ – are
significantly more likely to be using PPC
(59% compared to 25% overall). Once
you’ve reached a level of sophistication
in digital marketing, the benefits of PPC
come to the fore.
It may help to close the knowledge gap
if SMEs were to work with specialist
agencies when it came to PPC. Currently
78% of those who use PPC work directly
with the search engine as opposed to
only 16% who work with agencies. These
agencies have the potential to inform
and guide SMEs on the challenges and
opportunities of PPC, helping them to
ultimately enjoy its bounty.
However, in order for this to happen
there needs to be an improvement in
relationships between SMEs and agencies.
At the moment there are low levels of
trust, with only one in five SMEs (18%)
saying they trust SEO and PPC agencies; a
situation that they want to change! After
‘learning more about how it works’, the
top factor that would encourage more
SMEs to use PPC in the future is ‘Finding a
partner or agency I would trust to do this
for us’. SMEs are searching for an agency
that they can trust to guide them through
the complicated world of PPC, and in
doing so overcome the knowledge gap
that is currently causing them to miss out
on its benefits.
So if we remove knowledge as a barrier,
what would remain of the other
challenges we previously saw? Would
these remain as real barrier, or vanish as
phantom misperceptions?
Earlier we saw that there were three
groups of SME PPC-doubters: ‘cost
conscious’, ‘diminutive’ and ‘happy as we
are’. Let’s put the ‘happy as we are’ group
to one side; this group rejects PPC due to
the ‘lifestyle’ nature of their businesses
that they are happy to keep relatively
small, rather than due to any concerns
about PPC; instead, let’s delve deeper
into the remaining two groups: the cost
conscious and the diminutive.
{
At the moment
there are low levels
of trust, with only
one in five SMEs
(18%) saying they
trust SEO and
PPC agencies; a
situation that they
want to change!
Leaders
Cheap
followers
Close
followers
Casuals
Old school
Uninterested

The Cost Conscious SME
A
marketing campaign is, of course,
useless if it does not produce a
good Return on Investment (ROI).
One of the most prevalent barriers to PPC
adoption quoted, alongside absolute cost,
is doubt over exactly this. To demonstrate
this point, let us compare perceptions
of PPC and Organic Social Media. Fewer
than one in three SMEs (29%) believe that
PPC gives a good return on investment,
compared to 41% for Social Media; and
nearly half of SMEs quote absolute cost of
PPC as a barrier (48%) compared to just
11% for Organic Social Media. If SMEs are
going to invest in PPC, they need convincing
on the return they will receive.
All this is leaving many SMEs with the
feeling that PPC is too expensive with
fewer than one in five (19%) believing it
provides good ROI. However, there is some
question as to how SMEs know this to be
the case as we saw that only 34% of those
doing marketing have metrics to track
effectiveness. It may be that it is a gut
feeling that PPC does not produce good
ROI as opposed to a fact. This certainly
seems to be the case as in reality, over half
of SMEs that use PPC say that it provides a
good ROI (52%)!
The ‘cost barrier’ perception is
understandable given that in terms of pure
monetary value, PPC is a more expensive
form of advertising than, for example,
social media. However, this misses a key
business nuance: ‘time is money’.
On average SMEs using Organic Social
Media spend around 5 hours a week
managing this activity – that’s about 250
hours a year. Say you value an average
employee’s time at £50 per hour; that
would equate to £12,500 per year spent
on social media. Assuming each PPC click
costs an SME 50p, time spent on Organic
Social Media equates to 25,000 leads per
year that could be generated via PPC.
Is your Social Media activity generating
25,000 leads per year?
Indeed, for SMEs who use PPC, they are
adamant that when it comes to digital
marketing, PPC is the best use of their
time, an opinion that is also shared by the
digital-savvy ‘leaders’ who believe that
PPC has a better ROI than Social Media.
{
Say you value an average
employee’s time at £50 per hour;
that would equate to £12,500
per year spent on social media.
Assuming each PPC click costs an
SME 50p, time spent on organic
social media equates to 25,000
leads per year that could be
generated via PPC. Is your social
media activity generating 25,000
leads per year?

The Diminutive SME
T
he diminutive SMEs highlight areas
of ‘niche-ness’ as rationale for
rejecting PPC:
• ‘We are a local business’
• ‘Our products are too niche’
• ‘We are too small’
•‘We’re B2B’
It appears that many SMEs believe that
because they are based in ‘Littlevillage-on-
sea’, where nobody is going to drive 500
miles to come and buy from them, there’s
consequently no need to be visible to the
‘big wide world of the web’.
On the contrary, these business
characteristics are in fact drivers of why a
business should adopt PPC.
‘We are a local business’ – Far from the
‘big wide web’ when you set-up a PPC
campaign, you can target your adverts
by location. This means that that you can
determine that only people searching
within ‘Littlevillage-on-sea’ will see your
advert, avoiding any wastage of adverts
to Mr or Mrs Bloggs in ‘Faraway Village’.
Indeed, Digital Marketing Pro mentions
that PPC is highly effective for local search
and list it as one of their 10 reasons that
SMEs should use PPC.
‘Our products are too niche’ – Similarly,
the ‘keywords’ used to define when
your advert gets shown can be made
as ‘niche’ as you like, such that having a
very niche, specialist product should in
fact lead to your PPC adverts having a
higher conversion rate as only customers
searching for your specific niche will be
shown the advertisement.
‘We are too small’ – The muscle of big
business can be a constant thorn in the
side of SMEs. Take SEO. Building great
SEO ranking can take substantial time and
effort. Over four in five SMEs (83%) think
it is important to appear on the first page
of search results and of those nearly nine
in ten (89%) believe that being in the
top 3 results is important – one in three
(33%) say it’s critical. However, how can
you guarantee a top three position when
competing against behemoths of the
industry with thousands of employees and
dedicated SEO teams? In contrast, PPC is
great for giving yourself that initial boost
and getting to the top of the rankings.
As Brad Shorr at Forbes(1)
explains, PPC
campaigns can be fantastic for allowing
SMEs to compete against big business.
‘We are B2B (and PPC isn’t relevant in
B2B)’ – Whilst B2B is often considered
to be behind the times compared to its
B2C neighbours, online search has now
fully penetrated both worlds. According
to a recent ‘State of B2B procurement’
study, 77% of B2B companies use search
when buying products or services(2)
.
Search marketing is not irrelevant for B2B
companies – it’s nigh on essential.
If you’re a PPC rejector, perhaps it’s time
to look again!
1. http://www.forbes.com/sites/allbusiness/2015/05/30/small-businesses-can-compete-with-big-brands-on-pay-per-click-ppc-advertising/
2. http://www.brafton.com/news/94-percent-b2b-buyers-research-online-purchase-decisions

Tomorrow’s SME Success Stories
Are Those Who Invest in Digital
Marketing Today
A
s this report has shown, there is
no such a thing as a typical SME.
While this came as no surprise to
the team here at Latitude, after all, we have
been working with SMEs for over 8 years
now, there were other insights that came
out of the survey that were definitely more
surprising to us.
Latitude commissioned this survey in
collaboration with Bing to gain insights
into the mindset of UK SMEs. We wanted
to confirm our perceptions with well
researched data so that the solutions that
we offer to our partners are based on
actual gaps in the market. We also wanted
to understand potential roadblocks in
SME digital adoption, as well as have an
updated view on the SME knowledge of
digital marketing channels.
SMEs have long been in love with Social
Media and on the surface it’s easy to
understand why. Social Media is perhaps
one of the few (if not only) marketing
channels that strips the ‘magic’ away
from marketing and simplifies it to
something everyone can understand and
do themselves. It’s also a channel where
you can seemingly reap the fruit of your
hard labour fairly quickly. While we at
Latitude love Social Media and believe
that it can achieve fantastic results for
any brand, when managed as part of a
full marketing strategy, it simply cannot
be relied upon single-handedly to bring in
direct sales – particularly if you’re an SME.
This leads me to the biggest reveal that
the data from the survey has uncovered:
more (39%) SMEs are using social media,
compared to only 25% of SMEs who use
PPC as part of their marketing efforts.
More surprisingly, those not using either
of the channels are more likely to consider
Organic Social Media than PPC in the
future. Yet, the biggest challenge for SMEs
when it comes to Organic Social Media
is the fact that they are ‘unsure of the
benefit’. How is there such a disconnect?
PPC is often understood to be the channel
for driving direct sales and growth for
businesses. So why are some SMEs holding
back on investing in PPC?
As mentioned in the report, there are a
few key reasons why some SMEs are not
looking at PPC as a potential marketing
channel; a lot of it is to do with a
knowledge gap that still exists amongst
SMEs around PPC and what it can achieve
for a business of any size. Interestingly, the
SMEs hot on growing and already using
PPC as part of their marketing approach
are fully bought-in to PPC; with 59% of
‘digital leader’ SMEs using PPC as part of
their marketing approach, arguing that
it gives better ROI and is the best use of
their time. These SMEs are often on the
more ‘medium’ size of the SME spectrum,
with smaller SMEs and sole traders
perhaps not grasping the potential of
PPC yet.
There are also other reasons: many
SMEs are worried about the cost of PPC
as a channel and the perception is that
successful PPC marketing is not possible
on an SME-sized budget. From experience
we know that this is not actually the case.
There are also concerns around finding
an agency or a partner to trust to deliver
services – this may be due to previous
experiences with ‘cowboy’ agencies that
have led some SMEs to, understandably,
steer clear of PPC altogether or simply
not knowing which types of companies to
approach. Finally, some SMEs believe that
PPC advertising is not worth their time
if they are operating in a niche market
– a perception that is also based on
misconceptions as PPC marketing is crucial
for operating in niche markets and can
help regional businesses find customers
with precise targeting options.
However, SMEs are very interested and
bought in on investing in SEO, which.
while necessary, is a long-term tactic as
opposed to something that always brings
in immediate ROI. This further solidifies
the argument that SMEs are more than
ready and confident in investing in digital
{
PPC is often
understood to be the
channel for driving
direct sales and
growth for businesses.
So why are some
SMEs holding back on
investing in PPC?

The Search Industry - An
Industry Perspective
marketing, but perhaps lack of knowledge
and access to the right information and
the right partners are still overarching
barriers.
Is PPC a lost cause for the SME market?
Absolutely not. The potential for SMEs
and companies working with SMEs in
digital marketing is absolutely massive.
In fact, there were a record 5.2 million
private sector businesses in the UK at the
start of 2014, the first time the business
population has exceeded 5 million. At the
start of 2014, 99.3% of the 5.2 million
private sector businesses were small
and 99.9% were small or medium sized
(SMEs).This is a record annual increase
of 330,000 businesses (up 6.7% since the
start of 2013). If we apply the number
of SMEs wanting to grow in the next 2
years (66%) to these numbers, we are
talking about a huge, largely untapped,
opportunity for companies working with
SMEs to help them get there with the
help of digital marketing.
At Latitude we are continually building
digital marketing solutions with our
partners that are relevant solutions to the
day to day challenges faced by SMEs, from
white label low-cost SEO to PPC aimed at
SMEs. Is your SME client base part of the
66% that is looking to grow - if so, why not
offer them something to help them do
just that as a service?
To conclude, the demand for digital
marketing amongst SMEs is there.
Therefore, businesses working with
SMEs need to:
• Work on helping SMEs gain access to
digital marketing
• Educate and instil trust via partnering
with digital experts
• Help SMEs measure ROI
If you enable SMEs to grow, then so will
your business.
Although 15 years old, Search remains
at its infancy: it is bound to evolve and
become even more pivotal in our lives
as consumers and marketers. In the last
decade, it has already drastically mutated,
influenced by changes in consumer
behaviours and the intrinsic nature of the
web. This evolution has accelerated in
the last years, and is expected to further
increase its pace with the rise of game
changers like mainstream social search
and new devices like smartphones,
wearables or connected TV.
In many respects, it is not that surprising
to see conflicting trends in such a
maturing marketing channel. After all,
which teenager does not come with its
contradictions? On the one hand, search
advertising is the driving force behind
the growth of digital advertising spend,
a success built upon its accessibility to
advertisers of all size and background. On
the other hand, no matter how long the
tail of advertisers is and how long brands
have been practicing that discipline, there
is still a lot of education to be conducted
with Small and Medium Businesses.
This research helped surface how certain
myths remain very present in the mind of
SME decision makers and reinforces the
need for the key players in the industry –
search engines, tool providers, agencies
- to continue their educational efforts.
The size of two specific segments, the so-
called Old School Uninterested clusters,
is clearly outlining the challenge at task:
either deliberately or unconsciously
they are ignoring the profound societal
shift towards digital, with the risk to be
left behind and disappear. Investing in a
website and not promoting is a waste, like
opening a shop in a back-alley and having
no sign pointing to it… How do you expect
to your clients to know about it? As
consumers turn to the Internet to define
their consideration set, to validate your
credentials, to purchase… It is critical to
be present and, more importantly, visible
on the web. When this basic principle will
be embraced by all, then, and only then
will the entire British economy benefit
fully from this affordable, scalable and
accountable marketing lever.
Andrew Harris
Latitude
Cedric Chambaz
Head of Marketing Europe
Bing Ads

Conclusions
SMEs are sporadic when it comes to
marketing
Marketing is sporadic amongst SMEs.
Although there are some who are
‘leaders’, there are a large number who
either aren’t doing any form of marketing,
or are carrying it out ad-hoc and without
budget. Paid advertising and measuring
effectiveness with metrics are also only
undertaken by a small number. Overall,
there are many SMEs who may find it
difficult keeping up as the world moves
online to a greater and greater extent.
They can’t get left behind!
There’s progress though – some SMEs are
recognising the necessity of marketing
and particularly digital marketing. On the
whole, they’ve been spending more on
marketing overall and digital marketing
specifically in the past year. In 5 years’
time, we expect the number of SMEs
without a digital marketing plan to
decrease significantly as they continue to
see the benefits that it offers.
SEO takes top position for SMEs…
There are a wide range of digital
marketing channels which SMEs could
use to promote their business. However,
currently SEO seems to be viewed the
most positively with the vast majority
considering using it in the future. The
draw of moving up to the top page of
search engine rankings is proving very
alluring and is set to be a key strategic goal
for digital SMEs going forward.
..but PPC encounters challenges
Despite this, PPC – which can accomplish
a similar goal – is less popular. Those who
reject PPC typically fall into three camps
– ‘the cost conscious’, ‘the diminutive’
and the ‘happy as we are’. Each of these
groups have their own qualms with
PPC, but these are caused by a lack of
understanding around how it can be
used and this seems to be leading to
misconceptions which exacerbate the
challenges associated with it. In fact – PPC
should be one of the foremost marketing
channels considered by SMEs due the
flexibility and control it gives them in
managing their marketing. PPC should be
the way forward for a lot of SMEs.
SMEs struggling to measure marketing
effectiveness
While SMEs have great plans in investing
in marketing and growth, it’s surprising
to see how few of them are taking
measurement seriously. They are missing a
trick by not investing in ensuring they are
tracking marketing effectiveness efficiently
and ensuring they are getting the most
out of their investment by making changes
to activities based on how well they are
working.
..and finally
As we alluded to, every SME is different
and each one will need a digital marketing
strategy made-to-measure for their
business. The benefits that are realised
from it once implemented though will
be numerous and will be key in enabling
SMEs to compete on a large scale in the
coming years.
We’re convinced that digital is the way
forward for SMEs and that PPC should play
a big part in this for many - we’d love you
to let us know what you think though.

Share your thoughts and experiences by
tweeting us at @Latitude_Group or drop
us an email on hello@latitudegroup.com

About Latitude
Latitude Digital Marketing is a leading digital marketing agency with expertise in SEO, PPC, conversion analytics, social
media, affiliates and display advertising.
Digital marketing is what we do. Since setting up in 2001, Latitude has worked across various sectors, including retail, gaming,
travel and finance using a mix of digital marketing channels to solve various marketing challenges for our clients.
However, we’d like to think we're not just another digital marketing agency. Digital marketing is not just about the technical
stuff. It's also about meeting (and going beyond) our clients' expectations in unexpected ways.
We start with our client’s individual requirements and business/marketing objectives and then build a strategy around them.
About Circle Research
Circle Research is the B2B market research company. Circle was founded in 2006 as an alternative to traditional research agencies
who are consumer focussed and deliver bland, uninspiring, academic outcomes.
Based in London, we work globally with ambitious B2B firms, including half of the Top 10 B2B Superbrands.
Learn more at www.circle-research.com. Follow us @circle_research
About Bing
Bing helps you turn information into action, making it easier to go from searching to doing.
Get In Touch:
hello@latitudegroup.com
0845 212 223
www.latitudegroup.com

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