SMBs are catching wind of digital marketing products and services available to them and are responding with serious investments. In fact we’ve noticed small businesses are injecting more funds into online advertising than ever before. Borrell Associates, a group specializing in media-industry marketing reports, conducted their annual SMB survey (the largest survey of local business marketing habits in the US) and found the same.
Borrell’s 2016 SMB Survey saw a whopping 75% of SMBs planning to spend more on advertising in 2017. 15% of those smaller businesses are going to cut marketing spend on traditional media outlets in order to be able to invest more in digital. SMBs are shying away from conventional forms of advertising and are warming up to more modern forms of digital advertising – let’s take a look at why that is.
Why Do SMBs Trust Digital Now?
Marketers know that, historically, SMBs weren’t always so keen on digital advertising. There are a few reasons why, but money has always been the main barrier. Creating and managing a website, social media presence, and digital ad campaigns can be incredibly costly and time consuming for a small business.
A lack of financial resources and man-power has kept SMBs from the digital realm of marketing, but fast forward to 2017 and things have changed. Digital marketing tools and techniques have proven to be more effective than traditional mediums and SMBs have learned that online advertising is here to stay.
But that isn’t the only reason SMBs are now putting their trust in digital. In the Borrel survey, more than half of small businesses responded that they are planning to spend more on digital advertising because it provides far more data on their target audience. Since digital ad campaigns make it easier to track and compile data on customers, SMBs can then use that information to make informed marketing decisions.
Beyond data collection on customers (which is incredibly important), digital marketing is also cheaper and more effective overall. Take for example a Google Business Page that literally puts your small business on the map for free!
As GPS users navigate through a new town in search of gas or lunch etc., they can be presented with your nearby business services if you have a Google Business page. These types of free services are certainly more affordable to small vendors not to mention they are definitely more effective at catching business as it passes by!
Experts, like Dr. Peter J. Myers from Moz, predict that digital marketing opportunities for local like the map-example above will increase and evolve. Coinciding the increase in digital tools available to “the little guys” is subsequent interest and enthusiasm for these marketing services. 35% of SMBs believe that digital works better than the other types of advertising they have been using before.
Social Media Supports SMBs
Social media has played a huge role in warming up SMBs to the power of digital marketing. Let’s get back to the affordability aspect of digital advertising for a second. Obviously an SMB wants to spend as little as they can on effective ad campaigns. Social media marketing campaigns are more affordable than alternative platforms, which is why the number of SMBs advertising on social networks has doubled since 2010.
Social media is actually THE most alluring digital marketing platform for SMBs, largely because it’s free to create a business profile and have an audience. 90% of SMBs now believe that a social media presence is necessary, and 75% of SMBs plan to actually advertise on social media as well. That’s a huge jump from the 44% aiming to advertise on search engines.
Facebook is easily the top choice for SMBs when advertising on a social media network. A whopping 90% of SMBs said they were satisfied with the effectiveness of their Facebook ad campaigns. 36% said they were “extremely satisfied,” and it’s not all that surprising to see why. Unlike an expensive TV commercial, a Facebook ad has far more longevity and doesn’t need a potential customer to be viewing at exactly the right time. Instead Facebook is incredibly powerful for targeting customers locally when the user chooses to engage with Facebook – in other words it’s a lean, mean SMB marketing machine!
Good News for Small Business Marketers
Marketing professionals who cater to small businesses should be jumping for joy at all this great news! Since many SMBs struggle to effectively advertise online and 58% say that they want third-party support to help them manage their digital presence, there is a huge opportunity for marketing professionals servicing smaller businesses.
Companies like Yellow Pages and Yelp, who provide easy ways for small businesses to reach customers online, have already experienced a serious uptick in revenue. Digital revenues for Yellow Pages grew 22.4% in 2016, bringing in $142.5 million more for the company, 67.7% of the company’s total revenue.
Yelp is experiencing the same kind of growth. Even though analysts predicted otherwise, Yelp’s net revenue rose by 29.5% last year to $173.4 million. All those analysts obviously didn’t account for the influx of small businesses that would head on over to Yelp’s local advertising services, where accounts rose by 32% by the end of 2016.
But Yelp isn’t the only one benefitting. Businesses that register a free Yelp page were shown to increase their incremental revenue by $8000 every year. Any business that creates a Yelp Ads campaign will see even more growth. Yelp Ads can generate $23,000 in incremental revenue for businesses, far more than what a free page will bring in.
Everyone Wins with Local
As digital channels become increasingly available to local vendors, there is a trifecta of positive outcomes. Small business can take advantage of powerful digital marketing tools to grow their business. Marketers can support “the little guy” since small businesses are now willing to spend more than any time before on digital. Even better is the fact that local search results have improved drastically for the end users! As a result of low-cost digital assets that SMBs are adopting like a Google Business Page, social media and sites like Yelp, the end user is able to find local services faster and more efficiently. Everybody wins when SMBs advertise online. So if you’re a small business hoping to make 2017 a more financially successful year, what are you waiting for?
Borrell SMB Survey Infographic
We would like to extend a sincere thank you to Borrell Associates for consistently generating top-notch data and granting us permission to use the graphics featured above.
All screenshots by Chandal Nolasco da Silva. Taken February 2017.