SMBs Now Spend More Than 1/4 of Marketing Budgets on Digital Media
A new report released by local marketing research firm Borrell Associates paints a rosy picture for the immediate future of local marketing — as long as the industry can overcome a few barriers .
The report, which drew from a survey of over 2,000 SMBs, found that small businesses now spend more than a quarter of their budgets on digital media with robust growth in the social media and mobile advertising sectors. Four out of five of the businesses surveyed said they had a presence on social media and a little over 11% said they invested in mobile advertising last year.
“Given all the evidence we’ve compiled, there is no reason it can’t grow at multiples of the rate it’s growing now, and it’s growing very quickly,” said the company’s EVP Kip Cassino. “We’re talking to mostly very small businesses, and more than nine out of 10 have a web presence that they’re aware of and take care of every day.”
Cassino said that the study shows that although just about every small business has a web and social presence, many of them don’t understand how to get the most out of it.
“A lot of them were very confused as to what they can and can’t do and what this technology means,” he said. “They don’t understand retargeting very well. They’re not very sharp on metrics to measure whether their web presence is doing them good or not. “
The research firm estimates that small businesses will spend just over $500 billion on digital marketing in 2014. But many of them don’t even realize there are professionals out there available to help them with that side of the business, says Cassino.
“I think the most important thing (a small business) takes away from this is that there are services and people to help you,” he said. “These are not just a few guys hiding around the corner. There are established businesses that have expertise and depth in them. They can come out and give you a hand with what you thought were intractable problems.”
He said the study revealed another big issue is small businesses who try to do all of their digital marketing in-house.
“When you look at some of the smaller businesses, they may not have a real good idea of how to run or operate these things,” he said. “A good fraction of them have websites where their social presence is designed or put into place by themselves or members of their family”
The study also shed light on a communication gap between local marketers and small business owners. Cassino said the average small business is bombarded with about 20 solicitations a week from local marketers. He suggested that any local marketer that really wants to make an impact needs to figure out how to be heard through all of the white noise.
“I think it would be worthwhile for the local marketers to sit and think awhile about how they can get their message through all of the clutter that comes through the phone, the web, through magazines, through talks with neighbors on main street,” said Cassino. “These guys are very confused.”
Cassino said the industry’s overuse of jargon also appears to be a problem. “What we need to get back to is good old plain English, saying ‘This is what this will do for you.'”
Mason Lerner is a contributor to Street Fight.
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