Word-of-Mouth Driving ERPM Platforms, Report Says

Cost-conscious businesses will increasingly turn to communications platforms for e-mail, reputation and presence management (ERPM) in order to expand and manage their customer base, a report from BIA/Kelsey projects.

A report by local media consulting company BIA/Kelsey concluded that although rapid growth of digital word-of-mouth through online reviews and social media is still an untapped opportunity for small to medium-size businesses looking to expand their customer base, this will change as SMBs adopt more sophisticated marketing practices that require advanced communications platforms for e-mail, reputation and presence management.

The firm forecasts revenues for ERPM to grow from $460 million in 2008 to $3.1 billion in 2013. The number of SMBs using ERPM will increase from approximately 500,000 to nearly 4 million during the forecast period. The e-mail segment of ERPM comprises subscription-based software-as-a-service (SAAS) providers and e-mail marketing agencies that tailor their solutions to the needs of SMBs. In 2008 this segment represented 64 percent of the ERPM market, according to BIA/Kelsey.

Matt Booth, senior vice president and program director of interactive local media for BIA/Kelsey, said SMBs will soon have a window into digital word-of-mouth, noting there are too many disparate conversations going on through social networks, user reviews, message boards and online affinity groups for a small business to find, let alone track, manually.

"We've been watching ERPM closely over the past couple of years and believe the segment is poised to break through with solutions that enable SMBs to effectively manage their online reputations," he said. "The market has developed in such a way that ERPM is basically a white space that capital and technology will rush to fill."

Booth said BIA/Kelsey expects technology and partnerships to evolve to enable businesses to respond to consumers' opinions, concerns and requests. The company defines presence management as "where" and "how" business data and information are located across Internet sources, and defines reputation management as being built on the aggregation of reviews and comments, including product and service mentions by consumers. After opinions are gathered from sources like Facebook, Twitter and other online resources, the data is aggregated into a dashboard, whereby businesses can view their online reputation by monitoring digital word-of-mouth.

Presence management helps business owners see how their businesses are displayed. BIA/Kelsey analysts expect presence management to transform into the ability to suggest corrections and clarifications to core business data. Furthermore, the company said its presence will allow businesses to promote themselves via outgoing messaging to numerous social networking sites like Facebook and Twitter.