I didn't manage to link up with the picture (this always happens to me when someone posts a link to a picture!)
Never mind...General rule when dogs develop lumps and bumps (which most of them do from time to time).....go and get the lump checked out. The vet will most likely take a needle biopsy. This is quick, relatively painless, doesn't need an anesthetic. And find out what the lump is, and whether or not it needs to be removed.
Let me add that it's the MINORITY of these lumps that turn out to be cancer. A very small percentage. Mostly they are cysts, sebacious cysts, lipomas, infected hair follicles, small abscesses etc.
Many of the benign lumps can be left alone and don't need surgery. But -if the lump keeps catching on things, (like the dog's collar or dog-door) or bleeding, then there is a risk of infection, and sometimes it's best the lump comes off.