Referrals, Website and Social Media Are Local Advertisers’ Top-3 Sources For New Customer Acquisition

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Social media holds a strong position among local advertisers in the US, according to market research firm Borrell & Associates. The firm surveyed from April to August 2016 7,564 US businesses that purchased local advertising in 2016 and found that 85% now have a presence on at least one social media platform. They also found that Facebook was by far the social media platform of choice. 96% of survey participants said they had a page or profile on Facebook, 51% on Twitter and 41% on LinkedIn.

Local US Advertisers

Borrell conducted the survey among local advertisers in the US. This extends the survey base beyond small businesses since some of the businesses had annual marketing and advertising budgets of more than $100,000. Small business annual marketing and advertising budgets are, on average, under $6,000.

Borrell also reported that businesses that engage more heavily in social media activities tend to be smaller, older, independent companies with less than $1 million in gross sales. They are more likely to have a single location or be home-based than have multiple locations, and slightly more likely to cater to consumers (B2C) versus only businesses (B2B).

Local advertiser social media and marketing stats

Best Source Of New Customers

Referrals are the leading source of new customers among the businesses that participated in the survey, according to Borrell. However, we are not sure whether these are primarily word-of-mouth referrals or also include referrals that were created online via online reviews.

The Borrell survey revealed that the percentage of survey participants who believe their company website is a significant source of new customers has decreased from 58% to 47%. Interestingly, a January 2015 study by Thrive Analytics (via eMarketer) found that US SMB’s rated the company website the most effective SMB method for marketing and new customer acquisition.

In addition, email marketing, which has consistently ranked the number one source for leads among small businesses in other research, was rated less important than social media and events for new customer acquisition. The percentage of local business advertisers that selected social media as a leading source of new customers has more than doubled in 5 years, from 21% in 2011 to 44% in 2016.

The Borrell survey data also points out that the use of Yellow Pages, once the dinosaur of local advertising among local advertisers, has declined to just 8%. Surprisingly, search engine optimization (SEO) and paid search advertising were not listed as a source of new customers.