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The ad industry has a blind spot to SMEs

The ad industry has a blind spot to SMEs
Opinion

Humility could be the the industry’s most underrated growth strategy when it comes to reaching the long tail.


The inconvenient truth is that the big guns aren’t paying the bills.

It feels like the ad industry is doing a re-make of West Side Story, with the “Whales” and the “Krills” — big and small brands — singing different harmonies. And whilst they do, the gap between them continues to widen because of an advertising elitism.

Professionally we’re asked to debate the suggestion of separating large advertisers’ data from SMEs, metaphorically putting SMEs “in the bin”, as described at one industry event. There is a feeling that SME advertising behaviour is skewing data for the big spenders who invest in traditional media. And fear that the herd mentality may persuade larger advertisers to follow suit.

Lest we forget, consumers decide what advertising works. We preach about leaning into data and knowing your audience. We may need to eat humble pie here.

The irony is that SMEs are the big spenders, collectively making up to 80% of ad spend. And yet their buying strategy is compared to “digital shelf wobblers”.

It sounds patronising don’t you think?

Old habits die hard

There’s been a hierarchical divide in the media industry for years. Unpopular opinion: the “performance versus brand” debate resides here.

Starting out in DRTV 15 years ago it was obvious DR was painted as the gorky cousin of brand advertising. Direct response got results whilst brand ads were recognised with awards. DR had a rebrand as performance when DTC brands gave it kudos, but there is still a big brand, big ideas bias in agency land.

The discussion about ITV going after the “fat end of the long tail” to encourage SMEs into TV doesn’t seem new either. Hasn’t it been the case since the days that regional TV reigned? Yorkshire, Carlton, Anglia — they were the entry point for the long tail then.

Brands have long since earned their audience in performance. The Moonpigs and Direct Lines of the world had many a slot in daytime before they owned the spotlight.

Why Ignoring SMEs Will Backfire

We are seeing the tipping point for challengers with digital and performance remodelling the status quo.

Alienating SMEs in practice or in data will just encourage them to keep advertising in-house. Brands are dropping meaningful budgets on channels that don’t deliver the results of TV or established media, and I hear brands asking for DIY Outdoor applications.

It seems unfeasible that marketing teams in thousands of scale-ups in the UK, beavering away with Meta, TikTok, Amazon etc. with self-serve platform data as a benchmark, can be more successful without agencies.

When they would rather muddle along than onboard experts, something is broken. And it may be time agencies say, “it’s not you, it’s me”.

Rethinking Who Deserves the Spotlight

We need a reframe, and to check the ego. Brand ads and TV sound sexy, and there is no denying the long term benefits. But there is nothing sexier than profit in business and SMEs are seeing returns elsewhere. So we have to meet them where they are to begin with.

That is not to debate the case for TV. The naysayers are those who don’t dabble in it. What seems ambiguous is who deserves to play.

Content creation is the most available and economical it has ever been. There are more media options than ever before, AI is making systems more accessible, and yet there is still a barrier to entry for SMEs, which strikes me as a problem embedded in the culture of advertising.

This is a humbling chapter for adland, with layoffs and smaller brands rewriting the rule book. But it is also an opportunity for a collective swallowing of pride. To take stock and ask if we have created an elitism that doesn’t match the climate.

It’s an industry where accessibility for all isn’t the gold standard. Where it is suggested that the overarching majority of customers are filed under R for rubbish.

So what do we do about it?

The solutions

It’s increasingly obvious that you shift product by building communities, and the ad industry isn’t good enough at building community around smaller businesses.

Yet there are many simple, practical concessions the industry could adopt tomorrow to show up for SMEs:

  • Broader access to tools: Tiered or freemium pricing of services for SMEs, like file transfer, creative testing and audience profiling.
  • Education for our customer: We are very good at knowledge sharing internally, but we don’t do as good a job at translating this information from industry jargon into digestible units for businesses.
  • Agency transparency: Clear charging structures, published pricing, and rethinking of proprietary media deals that don’t serve smaller brands
  • Leader energy: There is a hand holding piece needed with newbies, and this can only be done by an experienced pair of hands not the office junior who gets the ‘smart’ budgets.

 

The smaller fish are swimming upstream whilst some people are clinging to a life raft. If we can stop sucking up to the Whales, and implement an attitudinal change, we will be useful to the majority.

The question is, will the ad industry get left behind whilst we are busy building a wall?


Lydia Esler is an award-winning TV producer. She currently works as executive producer and company director of creative and production agency Studio90 Media.

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