What do small businesses really spend on digital advertising? The answer to that question is defined by the quantity and type of respondents included in a survey. A new study released on this topic by Boston Consulting Group (BCG) indicates the average SMB spends about 3% of its ad budget online. That figure seems low but the study contains excellent data points to help SMBs see the impact of shifting more of their ad spending online.
In general, about 84% of local ad market spending is done in traditional formats while 16% is digital. This includes spending by both local and national firms. When only small local firms are included, BCG analysts say that SMBs largely use circulars and direct mailers and spend 97% of their ad budgets the same way they always have.
These analysts also point out that digital services firms can help locals SMBs unlock the power of digital for local marketers. To demonstrate the impact of digital, the study highlighted SMBs and Yelp. Firms that didn’t actively advertise on the social site could trace an average of $8,000 in additional revenue annual as a result of their Yelp profiles. Those SMBs who actively advertised on Yelp can experience up to $23,000 more revenue, on average. The results of this study also showed that specific sectors enjoy higher sales life as a result of online advertising at Yelp. These included:
- Home Services
One of the biggest problems SMBs face is that they don’t understand all of the digital avenues available to them. And, they also don’t have the time and expertise to master digital campaigns.
Have you found sales success in the SMB market when you help them move into digital?[Source: Degrande, Sebastian et al. Digital Marketing Potential of Small Businesses. Boston Consulting Group. 19 Mar. 2013. Web. 1 Apr. 2013]