SMB’s Invest More in Digital Marketing to Generate Leads and Build Brand Awareness

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New survey data from search and digital marketing consulting firm Thrive Analytics reveals that digital marketing continues to be the main focus of small and medium-size businesses (SMB’s) in 2016. Most SMB’s cited they consider lead generation and brand awareness building their main digital marketing goals, while social media marketing has become a basic component of the digital marketing mix, primarily because they consider this media channel to be an attractive tactic for “free” lead generation.

Marketing Budgets

SMB’s are planning, on average, to allocate 14-15% of their total expenses to marketing related activities in 2016 and a significant percentage of this will be spend on digital marketing, according to Thrive Analytics. Their bi-annual report, titled “2016 Local Pulse Report”, revealed that nearly half of SMB’s will increase their marketing budgets, up to 35% compared to last year. More dollars are invested across more media channels than ever. Top growth areas include: mobile marketing (49%), up from 34% last year; online display advertising (44%), up from 33% last year; and paid search (44%), up from 33% last year.

Digital Marketing Tactics

More dollars are being invested across a growing number of media channels. The survey participants revealed that, on average, SMB’s are now using nearly 8 traditional and digital media channels to promote their businesses. This is up from an average of 6 media channels in 2013. 

Company Website. The Thrive Analytics data shows that 60% of SMB’s participating in the survey did not have a company website. Nearly half of participants said they did not optimize their websites for mobile despite the fact that mobile marketing represents the top growth area for their businesses.

Social Media. Four in five SMB’s have a social media presence, either on Facebook (70%), Twitter (32%) or LinkedIn (26%), according to the Thrive Analytics report. SMB’s have high hopes for social media marketing. They expect social media to generate leads (70%), build awareness (57%) and engage their customers (57%). Only 19% of SMB’s indicated they had used social media advertising.

SMB marketing and advertising stats

Mobile Commerce. Nearly one-quarter of SMB’s recognize that mobile payment technology is important for the future of their businesses, but overall, the adaption of mobile commerce is slow. Only 38% of SMB’s have the ability to accept mobile transactions.

Digital Marketing Performance Measurement

Thrive Analytics reported that SMB’s are interested in “ROI”, but are not effectively monitoring it. One in four survey participants indicated that they don’t use technology to track the performance of their marketing efforts, but more than half said they monitor leads by asking customers directly how they found their businesses. The most important performance factors SMB’s were interested in include calls (43%), foot traffic (38%) and number of appointments (35%).

Digital Marketing Challenges

The Thrive Analytics survey uncovered that lack of funding (43%), lack of resources (32%) and “not investing enough” in marketing (29%) are the main obstacles for SMB’s to increase their digital marketing activities.

The full Thrive Analytics report can be downloaded here.