Seamus Byrne
March 25, 2019

Simson fears for small biz marketers

Digital Marketing

Simson fears for small biz marketers

Naomi Simson: "You spend money one week and it works, but then spend money again the next week and it doesn’t."

Something needs to be done about the concentration of digital advertising around Facebook and Google, with both regularly changing the rules so there is little consistency or clarity, according to RedBalloon founder Naomi Simson.

At the launch of a Microsoft MyBusinessMentor program, offering a chance for small business owners to win a mentorship opportunity with the well-known entrepreneur and SharkTank judge, Ms Simson spoke broadly about the challenges faced by small businesses in the modern landscape and finding good advice.

When asked about the difficulty in deciding how to make an investment in digital marketing, Ms Simson was particularly animated, feeling that the odds are stacked against businesses by the search and social power of the digital media giants.

"You spend money one week and it works but then spend money against the next week and it doesn’t. It’s a very challenging thing for small business. Where do customers come from and how do I find them consistently?" Ms Simson said.

"It happens to Red Group too. Even digital agencies don’t have much more clarity. The cost of finding customers has skyrocketed because there’s so little competition."

Ms Simson said that when RedBalloon first used Google Adwords the cost of finding a customer was as little as five cents. Today that cost can be $50.

For those with enough scale to have a good volume of internal customer data to work from, Ms Simson pointed to new AI tools that can help to get better results.

For Big Red Group they found a product called Albert AI, built in Israel, that connected into their first party data to build a better picture of where customers were actually coming from and which creative and platforms were delivering results. This led to improvements in success rates and, in turn, reductions in digital marketing costs.

"But we needed a lot of data to be able to do that," Ms Simson acknowledged.

With a nod to the ACCC inquiry into digital platforms, Ms Simson hopes something can be done to improve the situation for Australian businesses, and indeed the wider local economy given the little to no tax paid in Australia by the global digital media juggernauts.

In the preliminary report, the ACCC reached the view that "Google has substantial market power in online search, search advertising and news referral, and Facebook has substantial market power in markets for social media, display advertising and online news referral."

It also pointed to lack of transparency and clarity for advertisers and ACCC Chairman Rod Sims suggested that given the strength of their market position there is justification for greater regulatory oversight around Facebook and Google.

But at the core of Ms Simson's discussion, she felt that right now it’s just very difficult for small businesses to make well-informed choices when it comes to digital media buying.

"A small business is trying to be an expert in one thing and then trying to learn to be a digital marketer too? It’s really hard."

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