Survey: SMBs Beefing Up Local Marketing — And Favoring Free Social Over Websites

More and more small and medium-sized businesses understand the importance of digital, and are upping their marketing game — even though they still don’t have a clear understanding of the ROI of various channels.

According to Thrive Analytics’ recently released Local Pulse Report, 42% of SMBs are planning to boost their local marketing budgets throughout the year, up from 35% in 2015. Key areas of focus are mobile marketing, (49%, up from 34%), online display (44%, up from 33%), paid search (44%, up from 33%).

One “interesting paradox” here, says the firm’s managing partner Jason Peaslee, is that only 26% of SMBs use technology to measure the marketing performance of these channels.

So why are so many of these businesses increasing spend on something they are not certain is working?

“Most [SMBs say that] they measure performance by asking the customers where they found them (59%), and yet when we ask why they are changing marketing methods [such as] decreasing budgets, poor program results [or] ROI is generally the main reason why,” Peaslee said, adding that SMBs that use measurement tools, or have reps reviewing their marketing programs with them have higher satisfaction ratings and will usually spend even more.

The majority of the more than 1100 SMBs Thrive surveyed in January seem to understand that they have to be aggressive in their local marketing game, and are vowing to up the ante. But for some reason they’re not yet willing to go that extra mile to really figure out what’s working and what’s not.

Cue the next interesting paradox: SMBs are increasing their local marketing budget, but when it comes to social media marketing, they’re mostly sticking with the free route (as opposed to paid social advertising).

“A majority of those businesses are sole proprietors, or start-ups that don’t have a lot of dollars to spend, so they are trying to build awareness any way they can,” noted Peaslee. “Social media is generally perceived as free so most start there.” The report shows that only 19% of SMB respondents have actually paid for social media advertising.

SMBs are so keen on free social media, that they’ll often use social pages in lieu of an official website. Thrive’s survey found that 80% of respondents use social media including Facebook (70%), Twitter (32%) and LinkedIn (26%) — but just 60% have a website for their business.

It may sound foolhardy to rely so heavily on social, but Brian Sutter, director of Marketing at Wasp Barcode Technologies, which conducted its own SMB study, State of Small Business Report, suggests otherwise.

“A big part of it simply has to do with the fact that businesses aren’t getting the bulk of their sales from their websites anymore,” Sutter told Street Fight. “Mediums such as social media and apps are a lot more accessible and easier to navigate, specifically for millennial audiences. Many websites also just aren’t built for success. They feature a little to no call to action, limited contact information, and either no content or subpar content at best.”

Moreover, Sutter points out that unlike social media, many websites aren’t optimized for mobile.

“Social media comes with the added benefits of immediate mobile optimization and a preexisting interface that you have to complete in order to be successfully up and running. People might forget to put their phone number on their website, but on Facebook, you’re prompted to put in your contact information almost immediately upon completing a page for your business,” Sutter added.

Social may work better than a website for some needs, but SMBs will still have to put more muscle/money into their campaigns if they want to see results. Social media posts may be “free,” but when done right it can be time-consuming. And wasting time on something that may not be moving a consumer toward a purchase is exactly that: wasting time.

“It’s not enough to simply post something on Facebook now and expect magic to happen without learning how to measure it or ensuring that it’s even engaging your audience to begin with,” said Sutter, who expects there to be a lift in measurement efforts. “Up until now, SMBs haven’t focused too much on measuring ROI of their marketing and advertising efforts, but with SEO and analytics tools becoming more common, there will be an increased emphasis on learning how to glean insights from them.”

Nicole Spector is a Street Fight contributor.