Marketing small businesses online can be a challenge

The siren’s song of online marketing isn’t just for those seeking to promote their businesses — it also lures starry-eyed entrepreneurs convinced they can create the next Facebook or Yelp.

After all, Facebook has an estimated 750 million regular users, according to TechCrunch. The social networking site is estimated to reach $2.19 billion this year in U.S. display ad revenue alone, according to estimates by eMarketer. That’s an 80.9 percent increase and would make it the nation’s top display ad company, pushing past Yahoo for the spot.

What results, however, is a lot of sites clamoring for attention, which can be a challenge for businesses trying to determine which sites to use and for companies launching new sites.

Bob Khanpour started Hubzi.com, based in Calabasas, because he wanted to create an online business directory and deal site for small- and medium-sized businesses.

For small business owners, it’s important to have a way to market their products or services that is affordable, he said. Khanpour has tried to set Hubzi apart from the competition by offering to ease the workload of small business owners who can, for a fee, upgrade from a free listing to one where Hubzi promotes and publicizes a business, honing the profile so it is more easily found online.

Khanpour said a lot of business owners, though they realize the importance of having an online presence, don’t do a good job presenting their business or services. That’s where he sees the niche.

As everyone scrambles to put up a Facebook page or a Twitter feed to cash in on social networks, businesses can get lost in the noise, he said.

“There are millions and millions of companies that have pages, networks,” he said. “You have to market your profile. If you don’t know how to market your profile, you have the same problem you had in the beginning.”

Of course, the noise also is part of the challenge for business owners choosing which sites to use and which to take a pass on.

“There is a lot of clutter for the small business figuring out how to use these various specialized sites,” said Paul Witman, assistant business professor specializing in information technology management at California Lutheran University.

A business has to pay attention to how use of a site might affect its business, positively or negatively. Businesses have to think about where their customers or business partners are online and whether such sites will help them connect.

“What do I have to invest to use this effectively, and what value am I really going to get from it?” Witman said. “That’s really the question I’d be thinking about for a small business.”

For Donna Von Hoesslin, owner of Betty Belts and the Betty B. retail store in downtown Ventura, her Facebook account is a way to connect with customers. She spends from 5 to 30 minutes a day, sometimes more, posting, answering questions, commenting and offering up content that she said “resonates with my tribe.”

“Business owners can’t expect to just hire someone to run it for them and have it guaranteed to be effective,” Von Hoesslin wrote in an email. “The heart needs to be in it. If that’s missing, I think it misses the mark.”

Von Hoesslin goes on to add that a Facebook account isn’t about how many people “like” you; “it’s about WHO likes you.” For her, it’s a valuable way to make connections and worth the time.

There are millions and millions of companies that have pages, networks. You have to market your profile. If you don’t know how to market your profile, you have the same problem you had in the beginning.

Bob Khanpour, Hubzi.com

Von Hoesslin has seen limited response to some other sites, such as Yelp. Though the store has several reviews on Yelp and a combined five-star rating, it doesn’t seem to help business much, she said.

Businesses have to weigh the time commitment that comes from maintaining certain sites, Witman said. After all, if they create a profile on a site and then ignore it, it can actually do more harm than good for their business, showing they either don’t understand how social networking works or aren’t responsive to customers, he said.

Small businesses are starting to use social media increasingly more, with 73 percent reporting they use social media to market their business in Constant Contact’s Spring 2011 Attitudes and Outlook Survey. Of those not using social media marketing, 62 percent said they expect to start during the coming year; 81 percent of those using it plan to increase their use this year.

Those kinds of statistics and the fervor over deals site Groupon was what drove Ben Hale and his partner to create Ventura-based GnarlyBuys. The pair had tried out Groupon, and while they liked the prospect of receiving discounts on purchases, they thought they could create a site that would better serve a younger, hipper crowd with new experiences and fun deals, Hale said.

While the site differentiates itself from the competition by the kind of deals it accepts, Hale said it also benefits from focusing on local businesses and giving business owners personal attention they would not get from a national site.

“Every time that we’re up against Groupon or Living Social to date, we’re able to earn the business,” Hale said.

Business owners understand that the GnarlyBuys site won’t have the volume that they would get with the other companies, but they can offer a relationship with the people they’re dealing with, he said.

A lot of “me-too” sites crop up in an attempt to capitalize on the drive of businesses to the web because of the relatively low startup costs for starting a site, Witman said. While many new sites are startups with some initial funding and a website, the big guys are trying to capitalize on the market, too. In June, Google made a new attempt to catch up with Facebook with social networking site Google+.

But those starting such sites also have to consider that it can be expensive to have the programming needed for some of the back end operations, and a large chunk of money goes toward marketing and getting the site visible so people use it.

Witman said a successful site has to have a critical mass of users, which means sites are usually free, as well as providers or content or sellers. That means spending a lot of effort building relationships with the small business community, he said.

GnarlyBuys’ Hale said the company is getting the word out through Facebook campaigns as well as asking businesses and even friends in the community to spread the word about the site.

Khanpour acknowledges the challenge to Hubzi.com as everyone launches sites trying to become the next Groupon or LinkedIn. There are a lot of sites that offer business listings, including the big guys such as Craigslist or eBay.

“But typically the focus of those sites (is) not on small businesses or products or services,” he said. “They target everybody in the world … It’s usually very hard for consumers to find what they need.”

He said his company can distinguish itself based on the attention it can give to customers.

As a small business trying to reach small businesses, Khanpour said he has the challenge of marketing and promoting his site against all of the other sites out there.

“The limitations to myself and the company are financial,” he said. “It takes a lot of money to promote any website or product.”

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