Small Business Advertising Spending: How Do You Measure Up?

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Is your small business putting enough dollars into advertising and marketing? Without marketing, you can’t hope to attract new customers and build your business. To find out what other small businesses nationwide are doing in terms of advertising and marketing, we checked in with BIA’s U.S. SAM Survey of Advertising and Marketing. Here’s what the survey found.

Small business advertising spending is on the rise

Businesses with one to 19 employees spend just over $6,431 per year and use an average of eight different media, according to BIA. Businesses with 20 to 99 employees spend more than $47,602 per year across an average of 15 media.

More than half (53.7%) of larger small businesses say they plan to spend more in 2019 than they did last year, with social media and mobile marketing topping the list of the places they are most likely to spend.

The smallest small businesses (those with 19 or fewer employees) don’t plan to increase advertising spending this year. However, they do plan to change their spending mix, putting more of their money toward using geographic filters to target social media, email, and mobile marketing more narrowly.

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Where are small businesses spending on advertising?

Both types of small businesses use a mix of digital and traditional media for marketing and advertising efforts. The five most popular media for advertising and promotion are targeted social media marketing and advertising, email marketing, direct mail marketing and advertising, direct-to-home marketing and advertising, and location-aware mobile marketing and advertising.

Overall, BIA notes a growing trend toward hyper-targeting, and points out three major trends:

  • Social media advertising channels are a popular way to reach targeted audience segments. Almost two-thirds (61.2%) of businesses in the survey use targeted social ads as part of their media mix.
  • Each of the top five most popular media channels offer small businesses the ability to do “deep targeting.” This can be on the individual level, as with email (used by 49.3% of small businesses surveyed) and direct mail (used by 37.6% of businesses), or on the household level, as with “direct home” media such as door hangers (used by 35.7% of the businesses surveyed).
  • Location-aware mobile advertising, which 35.5% of businesses in the survey use, targets audiences based on geofencing or geotargeting (that is, identifying a mobile device location using GPS).

Don’t forget traditional media

While digital advertising and marketing gets most of the attention these days, traditional media can still be very effective, the survey found. In fact, larger small businesses (20 to 99 employees) in the BIA survey say that traditional media, such as newspapers, television, and radio, have a very high return on investment, citing as much as 10 times ROI.

Traditional, over-the-air radio still accounts for the biggest share of radio ad spending, BIA says, accounting for 8.9% of the local advertising market compared to online radio’s 1.1% share. However, BIA forecasts a 9.6% increase in ad spending for online radio in 2019, compared to a 1.9% decline in over-the-air radio ad spending.

Wherever they are spending their marketing and advertising budgets, BIA says smart small business owners are going beyond basic demographic targeting to drill down into the actions that consumers take on the way to making a purchase. “Because businesses like the targeting (behavioral) opportunities that mobile and social offer, these platforms continue to show the largest signs of advertiser growth,” Celine Matthiessen, the director of the study, told TV Technology.

Advertising methods that give you insights into which of your ads your customers click on, what social media content they interact with, and when they visit your website will help you identify your most effective marketing and advertising campaigns. With this information in mind, you can fine-tune your future efforts accordingly for even greater success.

RELATED: Radio Advertising: Should Your Business Try It?

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