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The big deal with small business

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The small and midsize business (SMB) market represents a huge growth opportunity for b-to-b marketers this year, experts say, and many companies are launching new campaigns and strategies to target this audience. According to recent reports by Gartner Group and IDC, the SMB market is poised to lead growth in the technology category.

The Gartner study, released in November, said the SMB market will lead the recovery in IT spending in 2004, specifically in segments including security, storage, wireless LANs, Linux applications and business intelligence software. The IDC report, released in December, said the SMB market will be a key audience for utility computing marketers such as IBM Corp. and Unisys Corp.

"The heart of the market is SMB," said David Tapper, senior analyst at IDC. However,
he added, there are challenges in serving this market.

"The customers require more hand-holding and consulting," Tapper said. "When you get to the mid-market and smallest customers, a company has to come in and manage the entire customer."

IBM, Hewlett-Packard Co., eBay, Visa USA and Office Depot are just some of the b-to-b marketers that are beefing up their SMB marketing this year.

IBM spending up 50% to 60%

IBM will spend 50% to 60% more on advertising to the SMB market in 2004 compared with last year, said Mark Ouellette, worldwide VP-software group SMB sales and marketing at IBM.

"In 2003, the sector that grew the most in the IBM company was SMB," he said.

This year, IBM has two primary marketing goals for the SMB market, Ouellette said. "The first thing we are going to do is spend more money and dedicate more time in creating awareness," he said. "The single biggest business issue for SMB is that end-user customer sets are not aware that we have been developing offerings specifically designed to meet their business needs."

The second major goal is to support IBM’s partner channel through co-marketing activities and industry-specific strategies.

One of IBM’s first major SMB advertising initiatives this year will focus on integration. This includes external integration, such as connecting customers and suppliers, and internal integration, such as connecting business processes and applications. Ouellette did not provide more details about this campaign.

Other SMB messaging will be consistent with IBM’s corporate advertising, he said. This includes campaigns such as "Middleware is Everywhere" and "e-business on demand," created by IBM’s agency, Ogilvy & Mather, New York.

Hewlett-Packard, which targets the SMB market with all of its products, will focus its 2004 advertising on how small- and midsize-business customers can get a total solution from HP.

"HP has high awareness in the SMB space," said Jan McDaniel, director of brand and advertising for the personal systems group at HP. "What we don’t have is an understanding of the total solution HP offers these customers."

HP’s near-term goal is to transfer that high brand awareness to more preference and consideration for HP products and solutions, McDaniel said. The company will work to achieve that through integrated advertising, including print, radio, online, direct mail and events. So far, TV is not part of HP’s SMB media plan this year.

HP is now running an integrated campaign, developed by its SMB agency, Publicis Hal Riney, San Francisco, that shows how its products and services are designed to solve problems for small- and midsize-business customers. Print ads are running in publications including BusinessWeek, Newsweek and Fortune Small Business.

HP’s enterprise advertising, which is handled by Goodby Silverstein, San Francisco, is also including some ads aimed at SMB prospects. For example, last fall HP ran an ad featuring a SMB customer, guitar maker Fender Musical Instruments Corp., to promote HP’s technology infrastructure.

"The SMB customer is a very diverse audience," McDaniel said. "It can be an unmanaged IT environment all the way up to a medium-sized business with a managed IT environment. You talk to them very differently."

eBay Business’ bid for SMB

IT companies aren’t the only marketers that are stepping up advertising to the SMB marketplace. For example, eBay, which last year launched a b-to-b operation called eBay Business, next month will roll out a new series of ads aimed at small businesses. Created by eBay’s agency, Slack Barshinger, Chicago, the integrated campaign will feature small-business owners who have purchased equipment on eBay and saved money.

When eBay Business launched in January 2003, it initially targeted prospects in office technology, restaurants, metalworking, and test and measurement services. In the new campaign, it is expanding its vertical markets to fine jewelry, automotive restoration and insurance.

The campaign, with a tagline of "Real businesses. Real dreams. Real savings," will include vertical trade advertising, network radio and national print ads in The Wall Street Journal, Inc and Entrepreneur.

"While we’re broadening the message and the media, we recognize that business buying on eBay is still a new concept for a lot of business people, so we’re sticking to the testimonial approach," said Jay Fiore, director of marketing for eBay Business. "Testimonials are a great way to generate buzz among small-business people."

Visa Business, the business card and business services unit of Visa USA, last week debuted a TV commercial for Visa Extras, a new reward program for small-business cardholders. The campaign, developed by BBDO West, in conjunction with BBDO New York, has a theme line of "Free Stuff," and shows how businesses that use the Visa Business card can win rewards such as free travel, office supplies and gift certificates.

"Small business is extremely important to us," said Jean Burkhart, VP-Visa Business. "Small businesses spend over $4 trillion a year, and there is a huge opportunity to capture more of that spend on payment cards," she said, pointing to proprietary research Visa conducted on the small-business market.

The TV spot will be followed by a print campaign that will roll out later this year; a media schedule has not yet been determined.

Office Depot touts furniture

Office Depot is another marketer that continues to increase its advertising to the small-business market. In November, Office Depot launched an integrated campaign for its Christopher Lowell Collection line of furniture, aimed at small-business and home-office customers. The campaign, created by BBDO New York, includes print, TV and radio. Print ads are running in publications including Fortune, Fortune Small Business, Business 2.0, Entrepreneur and Inc. The budget was not disclosed.

"The small-business segment is our most important segment," said Rachelle Franklin, VP-integrated brand marketing at Office Depot, Delray Beach, Fla. She said small-business revenue makes up 75% of Office Depot’s total sales.

In addition to the Christopher Lowell campaign, Office Depot plans to conduct multilayered, integrated marketing throughout the year to reach small-business customers. The company’s efforts will include additional TV ads, radio, print, direct mail, Webcasts on topics of interest to small businesses, in-store educational events, sports sponsorships and events.

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