Large retail and B2B brands have been leading the push into digital marketing with pioneering efforts in mobile advertising, real-time targeting and predictive analytics; but the results of a new poll suggest 2014 may be the year of the small- and mid-size business (SMB).
According to a survey of 1,000 small business executives in 14 markets conducted by Borrell Associates, small- and mid-sized businesses have seen their marketing budgets grow more than 10% since the spring – with more than four-out-of-ten planning to increase spending on digital channels. Part of that has to do with simple economics; SMBs report a higher level of business confidence – a factor that’s more important for SMB-ad spend than for larger firms – than they did last year. But there’s more than just diminishing economic uncertainty at play.
Small businesses say they are ready to take the leap into proven digital platforms, and they are putting their money into the space. Most notably, for the first time this year small businesses will channel more of their marketing budgets into digital than newspapers, according to the Borrell report, SMB Marketing Patterns.
“The SMBs in our latest survey said they are increasing their online advertising by an average of 33%,” said analyst Gordon Borrell, who believes as many as 90% of all businesses will be on Facebook in the coming year. But the big story is playing out in the mobile space. With nearly half of respondents saying they are likely to use mobile as an advertising channel over the next 12 months, Borrell sees an emerging sweet spot for agencies and solutions providers that work with smaller clients.
“Mobile is a really interesting category because 85% of SMBs have said they have a high interest in mobile, but only about 19% of these businesses are actually using it,” he said. “So given that pent up demand, anyone offering mobile products I think is going to be very successful.” The findings closely mirror those of a survey released over the summer by cloud provider Vocus, Inc. in conjunction with Inc.com, which found that while small businesses still lag behind their enterprise counterparts when it comes to more sophisticated approaches to digital marketing, they are working overtime to catch up.
“Large organizations are accustomed to digital marketing – they’ve been doing it for years. However, small and medium businesses during that time have continued with traditional marketing,” said Brendon O’Donovan, product marketing manager at Vocus. O’Donovan says that over the past few years, the increasing affordability and accessibility of digital marketing tools have opened up digital marketing to smaller businesses.
Other industry watchers are echoing that sentiment. Mark Fratrik, chief economist of advisory firm BIA/Kelsey, predicts that by 2017, nearly 30% of the local ad market will be digital/interactive, with mobile expected to grow from less than 2% in 2012 to more than 6% of the total pie. And, he says, SMB mobile advertisers have much more aggressive plans for advertising media spending over the next 12 months compared to those who don’t.
Yet despite the pent up demand, according to the Borrell study, a third of all SMBs say they have not been approached by vendors about setting up a mobile campaign. That leaves millions of potential clients just looking for mobile help. If you’re a vendor with a commercially available mobile marketing solution the question is: What are you waiting for?