smes: what is the real addressable market?
DESCRIPTION
SMEs: What Is the Real Addressable Market? Neal Polachek, Independent Industry Advisor & former CEO, The Kelsey Group Conference presentations often tell us there are millions of small businesses (ie - SMEs, SMBs) that represent the addressable market for digital advertising. But recent survey data suggest that many SMBs are lifestyle businesses whose owners don't want to grow. If accurate the implications for the market fare potentially radical. This session will explore the "real, addressable SME market." It also asks whether the products being sold to SMEs are truly aligned with their needs.TRANSCRIPT
What is the “Real” Addressable Market?
Neal Polachek
Board Advisor – vSplash/BuzzBoard
November 19, 2013
- Former CEO – The Kelsey Group and President – BIAKelsey
- 20+ years as industry analyst
- Board advisor for, and consultant to, large and small companies
Who am I and Why am I Here?
Why do we Care about SMEs
It is where Local and Social Intersect
Some Key Trends/Facts
• SMEs: 95 – 98% of Business establishments in most countries
• SMEs: employ upwards of 67% of private sector jobs in developed markets
• SMEs: drive as much as 50% of GDP in developed countries
• SMEs: drive a smaller % of GDP in developing countries but this % is increasing
160 - 200 Million Identified SMEs
North America; 0
Western Europe; 0
Eastern Europe; 0
Latin America; 0
Asia; 1
ROW; 0
Sources: Various Government Sources
SMEs Swim With the Sharks
And the Sharks Want Their Food
1999 – First Wave Kelsey Local Commerce Monitor - Illustrative
Yellow Pages; 70%
Newspapers; 15%
Direct mail; 10%Leaflets; 5%
Easy to Evaluate, Easy to Buy, Easy to Sell
Little fragmentation
& high margins all
around
By 2013 – It Looks More like This - Illustrative
15%
10%
5%
10%
10%15%
10%
5%
10%
3%4% 3%
WebsiteSocialLanding PagesBlogsMobileVideoLeafletsIYPPrint YPNewspapersRadioTv
Difficult to Evaluate, to Buy, to Sell
High fragmentation
& low or no margins all
around
SME Commerce Meets SME Cloud
SME Share of Cloud
Computing by 2015 = 65% or
$30B USD*
SME Share of Cloud
Computing by 2015 = 65% or
$30B USD*
SME Share of Global GDP of $70T = 40% or
$28T USD
SME Share of Global GDP of $70T = 40% or
$28T USD
*Source: McKinsey 2011
Market
Market
Connect
Connect
Transact
Transact
Commerce Solutions for SMEs
Market
• Traditional and Digital– YP– Search– Newspaper
• eCRM– eMail, rep mgt.
• Web presence– Mobile, responsive
• Social – Blogs, social updates
Acquire and
engage customer
s
Connect
• Connectivity– Broadband– Wireless
• Devices– Desktop– Tablet– Mobile
Connect with
customers
Transact
• POS – Square– Xyz– Etc
• Accounting – Billing – AP/AR– Taxes
Transact, track, bill
and collect
Market Size – 2013 and 2018
140
207
18
206
269
30
MarketConnectTransact
$365B $505B
Just Over 1% of SME GDP (assumes SME Share of GDP is 40%)
Advertising and Devices Today
Advertising; 0.27
eCRM; 0.02Web Presence; 0.01
Social; 0.08
Wireless Device; 0.34
Computing Device; 0.1
Wired Connectivity; 0.13
Accounting; 0.02Transaction; 0.03
$365B
Conversations and Content - Tomorrow
Advertising; 0.15
eCRM; 0.02Web Presence; 0.02
Social; 0.22
Wireless Device; 0.32
Computing Device; 0.12
Wired Connectivity; 0.1Accounting; 0.02Transaction; 0.04
$505B
Penetration Rates will Change
3126
33
9
59 57
39
2126
3036
68
40
87 85
4043
49
2013 2018
Market Connect Transact
And the Money will Flow . . .
100
6 5
30
123
3847
7 10
78
9 9
109
161
5850
1218
2013 2018Market Connect Transact
