A big percentage of the press coverage around the release of iOS 9 has been about ad blocking. Apple has made it possible for consumers to stop all those annoying banners and pop ups. Cue much consternation about the future of revenue generation on the Internet. Content blogs and sites which depend on advertising for all their revenue are predicting a bleak future.
All this noise has made me think a bit more about the growth challenges facing SMB SaaS startups. Most of these businesses rely on the web in various forms to reach potential customers. The obvious impacts of a reduction in general online advertising would be:
Short Term Windows Will Close
Fine and good. But the reason for fearing ad blockers is more fundamental. People don’t like being bombarded with ads. There is a limit to how far Facebook and others can push. Content marketing which is just brochure ware is also seeing its audience dwindle. Over time direct advertising channels will narrow and become much more expensive to access.
The good news is that there is a different approach for SMB SaaS. Distribution is the answer. I used to think of distribution in an old fashioned model. It was about getting the product to the customer. With cloud based SaaS this could never be a problem?
A New Definition For SaaS Distribution
Correct in the physical sense. But in SaaS distribution now means reaching the audience. Advertising channels may shrink but the audience - the market for SaaS products - continues to grow. More consumers have access to a reliable connection and a smartphone every day. Software is eating the B2B world. Whole sectors are being transformed by digital.
So if distribution is the key how does your SaaS reach this growing audience? Modern software has unlocked this door. The key is integration. The ability to link SaaS products together makes every product a potential channel for others. Most SMB SaaS solves a narrow well defined problem. In startup mode there is a minimum feature set so this is even more pronounced. But integrate your product with the forest of other exciting new software. Each SaaS becomes the gateway to a whole ecosystem of solutions.
Make Your API Your Sales Force
Your API can become your best sales tool. Integration with other SaaS can open up distribution through a bunch of channels:
Will Integration Led Distribution Work For SaaS?
The strategy is right. Reaching a big customer audience that is already open to using SaaS in their business manse sense. It must be more effective than battling with rising costs from Adwords or Facebook. And falling conversions.
It will not be free. As the number of apps on each platform grows the fight for attention will rise in cost. We might also see some of the big platforms exploiting their app centres as a revenue stream.
As always the key will be execution. Choosing the right platforms and doing the right work to maximise the benefit will deliver results. I expect that better insight on this will emerge in time. Right now, I am working with one SaaS company. They are experimenting with this approach. I will let you know when they crack the code.
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Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.