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Survey: SMBs Boosting Digital Media Spend Because Of Competition, Not ROI
SMBs are increasing marketing investments, especially in mobile and social media.
More small to medium-sized businesses (SMBs) are devoting more of their resources to digital media, but that may be creating more challenges than it solves, according to new survey data from Thrive Analytics in its 2016 Local Pulse Report. The survey captured responses from 1,116 SMBs and covered a range of topics from digital media and ad spending patterns to social media usage and ROI measurement.
The survey found that on average, SMBs are now using 7.8 media channels (traditional and digital) to promote themselves. This has grown from six channels in 2013. It’s a reflection of the increasing complexity and fragmentation of the market.
One would assume these local marketers would be more focused on measurement to determine which channels were working. The survey did find that they were interested in “ROI,” but they weren’t effectively measuring it. In fact, 74 percent of SMBs didn’t use any tools to track the impact of their marketing.
SMB Usage of Tools/Technology to Help Measure Marketing Performance
Source: Thrive Analytics, January 2016
SMBs were instead using calls (but not call tracking), foot traffic/visits and appointments as the top measures of marketing performance. Yet these methods were not tracked back to specific channels or tactics, and only 28 percent were paying attention to website analytics as an indicator of success. Most efforts to determine where leads were coming from were fairly informal or imprecise.
The way that the majority of SMBs (59 percent) were determining whether their marketing was working was the age-old tactic of “asking customers how they found out about us.” The next most common way was “try to determine where every lead came from.”
The survey also found that increasing SMB investments in marketing (especially digital) had little to do with ROI measurability. Only six percent cited measurement as a reason for growing digital media investments. The biggest motivations for increasing marketing spend were that it was “strategic” and that the business’s competitors were doing it.
Other interesting data points from the survey include:
- Top digital growth areas in order: mobile marketing, online display, paid search.
- 80 percent of SMBs had a social media presence (70 percent on Facebook).
- Only 19 percent of SMBs have paid for social media advertising.
- SMBs allocate on average 14 to 15 percent of their total expenses to marketing-related activities.
- SMBs’ biggest hindrances to growth, in order, are lack of funding, lack of resources and not investing enough in marketing.