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What is the “Real”
Addressable Market?
Neal Polachek
Board Advisor –
vSplash/BuzzBoard
November 19, 2013
Who am I and Why am I Here?
- Former CEO – The Kelsey
Group and President –
BIAKelsey
- 20+ years as industry
analyst
- Bo...
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 priva...
160 - 200 Million Identified
SMEs
North America; 0
ROW; 0
Western Europe; 0
Eastern Europe; 0
Latin America; 0

Asia; 1

S...
SMEs Swim With the Sharks
And the Sharks Want Their
Food
1999 – First Wave Kelsey Local
Commerce Monitor - Illustrative

Little
fragmentation
& high
margins all
around

Leaflets; ...
By 2013 – It Looks More like This Illustrative
4% 3%
3%

High
fragmentation
& low or no
margins all
around

15%

10%
10%

...
SME Commerce Meets SME
Cloud
SME Share of
Global GDP of
$70T = 40% or
$28T USD

SME Share of
Cloud
Computing by
2015 = 65%...
Commerce Solutions for SMEs
Marke
t

Trans
act

Conn
ect
Market
• Traditional and Digital
– YP
– Search
– Newspaper
• eCRM
– eMail, rep mgt.
• Web presence
– Mobile, responsive
• ...
Connect
• Connectivity
– Broadband
– Wireless

• Devices
– Desktop
– Tablet
– Mobile

Connect
with
customer
s
Transact
• POS
– Square
– Xyz
– Etc
• Accounting
– Billing
– AP/AR
– Taxes

Transact,
track, bill
and
collect
Market Size – 2013 and 2018

18

30
140

$505B

$365B
207

206

269

Just Over 1% of SME GDP
(assumes SME Share of GDP is ...
Advertising and Devices Today
Transaction; 0.03
Accounting; 0.02
Wired Connectivity; 0.13
Advertising; 0.27

$365B

Comput...
Conversations and Content Tomorrow
Transaction; 0.04
Accounting; 0.02
Advertising; 0.15
Wired Connectivity; 0.1

Computing...
Penetration Rates will Change
87

85

Market

2013

2018

Connect

Transact

68
59

57
49

31 30

36

40

43

39 40

33

2...
And the Money will Flow . . .
161

2013

Market

2018

Connect

Transact

123
109

100
78

58
30
6 9

5 9

38

47 50

7

1...
Thank You
nbpolachek@gmail.com
neal@mybuzzBoard.com
twitter @nealbp
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SMEs: What Is the Real Addressable Market?

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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.

Published in: Marketing, Business, Technology
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Transcript of "SMEs: What Is the Real Addressable Market?"

  1. 1. What is the “Real” Addressable Market? Neal Polachek Board Advisor – vSplash/BuzzBoard November 19, 2013
  2. 2. Who am I and Why am I Here? - Former CEO – The Kelsey Group and President – BIAKelsey - 20+ years as industry analyst - Board advisor for, and consultant to, large and small companies
  3. 3. Why do we Care about SMEs It is where Local and Social Intersect
  4. 4. 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
  5. 5. 160 - 200 Million Identified SMEs North America; 0 ROW; 0 Western Europe; 0 Eastern Europe; 0 Latin America; 0 Asia; 1 Sources: Various Government Sources
  6. 6. SMEs Swim With the Sharks
  7. 7. And the Sharks Want Their Food
  8. 8. 1999 – First Wave Kelsey Local Commerce Monitor - Illustrative Little fragmentation & high margins all around Leaflets; 5% Direct mail; 10% Newspapers; 15% Yellow Pages; 70% Easy to Evaluate, Easy to Buy, Easy to Sell
  9. 9. By 2013 – It Looks More like This Illustrative 4% 3% 3% High fragmentation & low or no margins all around 15% 10% 10% 5% 10% 5% 10% 15% 10% Website Social Landing Pages Blogs Mobile Video Leaflets IYP Print YP Newspapers Radio Tv Difficult to Evaluate, to Buy, to Sell
  10. 10. SME Commerce Meets SME Cloud SME Share of Global GDP of $70T = 40% or $28T USD SME Share of Cloud Computing by 2015 = 65% or $30B USD* *Source: McKinsey 2011
  11. 11. Commerce Solutions for SMEs Marke t Trans act Conn ect
  12. 12. Market • Traditional and Digital – YP – Search – Newspaper • eCRM – eMail, rep mgt. • Web presence – Mobile, responsive • Social – Blogs, social updates Acquire and engage customer s
  13. 13. Connect • Connectivity – Broadband – Wireless • Devices – Desktop – Tablet – Mobile Connect with customer s
  14. 14. Transact • POS – Square – Xyz – Etc • Accounting – Billing – AP/AR – Taxes Transact, track, bill and collect
  15. 15. Market Size – 2013 and 2018 18 30 140 $505B $365B 207 206 269 Just Over 1% of SME GDP (assumes SME Share of GDP is 40%) Market Connect Transact
  16. 16. Advertising and Devices Today Transaction; 0.03 Accounting; 0.02 Wired Connectivity; 0.13 Advertising; 0.27 $365B Computing Device; 0.1 eCRM; 0.02 Web Presence; 0.01 Social; 0.08 Wireless Device; 0.34
  17. 17. Conversations and Content Tomorrow Transaction; 0.04 Accounting; 0.02 Advertising; 0.15 Wired Connectivity; 0.1 Computing Device; 0.12 eCRM; 0.02 Web Presence; 0.02 $505B Social; 0.22 Wireless Device; 0.32
  18. 18. Penetration Rates will Change 87 85 Market 2013 2018 Connect Transact 68 59 57 49 31 30 36 40 43 39 40 33 26 21 9 26
  19. 19. And the Money will Flow . . . 161 2013 Market 2018 Connect Transact 123 109 100 78 58 30 6 9 5 9 38 47 50 7 12 10 18
  20. 20. Thank You nbpolachek@gmail.com neal@mybuzzBoard.com twitter @nealbp
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