Opportunities For Small Businesses Online

Our clients often ask us for help in picking their next markets and verticals—they are usually interested in the hot markets and verticals, where many small and medium businesses (SMBs) already invest money online. Palore provides this information by analyzing millions of web pages and seeing which SMBs advertise and where they advertise.

The chart below shows the penetration of SMB advertisers on leading IYP sites in 8 verticals, covering 8 major cities. The bright blue cells indicate a low percentage of advertisers in a specific market/vertical, darker cells indicate higher percentages of advertisers per market/vertical. The highest penetration we have observed is a little under 50%.

 Penetration of Advertisers on IYP Sites

As can be seen in the chart above, some verticals show a stronger penetration of advertisers (e.g. life insurance), and some markets are generally stronger than others, with a higher percentage of advertisers across all verticals (e.g. Seattle).

Much of this information is not news to anyone in the industry. The interesting way to use it is to find where the opportunities are. For example, construction companies generally advertise a lot, but for some reason, this is not the case in Las Vegas—there may be an opportunity there (although construction in Las Vegas is a touchy subject just now). When you look at the chart, basically any bright cell surrounded by darker cells represents potential, since it means that SMBs in that vertical advertise a lot elsewhere, but not in that market, and that other verticals advertise a lot in this market, but not in that vertical. Having this detailed information and making an educated decision can mean the difference between success and failure of future launches in new markets and verticals.  

Before investing millions of dollars in a new market or vertical, be sure to look not only at the penetration of advertisers, but also at the total number of businesses in the specific vertical and market. For instance, while in Minneapolis, 28% of movers advertise on IYPs, the total number of businesses in this vertical on leading IYP sites is under 200.

Furthermore, in some cases, it is also important to look not only at the industry averages, but also at how many SMBs advertise on a specific (competitor) site. You may want to focus on verticals and markets that have proven to be successful for a certain competitor or rather take a shot at the ones where the competitor has yet to succeed.

The decision of where to launch your services next is crucial. Basing your decision on concrete market knowledge can make the difference between failure and success.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Other | Small Is Beautiful


About The Author: is CEO at Palore, a provider of local businesses' advertising data and information on their online activity. He also blogs at The Palore Blog. This column is researched and written by the marketing department at Palore, which is led by Hanan.

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