Increasing Influence of Online Local Advertising Among SMBs

BY Kathy Crosett
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Local marketers still believe in the power of advertising to increase their advertising to sales ratio, especially the influence of online local advertising on their target customers. That’s one of the key findings in the 2019 Local Advertising Survey recently published by Borrell Associates. Of the 2,288 businesses that participated in the survey, 78% have fewer than 100 employees. Only about 15% of small to medium-​sized businesses (SMBs) have ad budgets that exceed $200,000. However, there is plenty of opportunity in the local market for reps who sell media and digital marketing services to SMBs.

TV and Larger Local Businesses

This year, around 20% of surveyed businesses have increased their ad spending in order to increase their advertising to sales ratio. These businesses continue to spend most of their budget on local broadcast TV. On average, this broadcast TV spend works out to about $95,816 annually. Local businesses also like to invest in ads on cable TV and advanced TV platforms. However, only larger local businesses, the top 20%, have big enough budgets to fund TV ad campaigns. Of the businesses that purchase TV, about 50% have purchased ads on advanced platforms.

Traditional Media and Local SMBs

SMBs, your prospects, use 3.4 kinds of traditional advertising and 2.6 types of digital advertising. On average, the company's spend ratio is nearly two to one in favor of traditional formats. However, online local advertising is still prevalent among this type of client. Not surprisingly, the most popular digital format for your local prospects is social media. 62% of businesses in the Borrell survey currently pay for ads on Facebook, Twitter, Instagram or another social site. But they are also buying ads on traditional formats other than TV:

  • Newspapers 50%
  • Radio 44%
  • Out-​of-​home 26%

Advice Needed: Opportunities for Increased Online Local Advertising

Only 25% of respondents in the Borrell survey call themselves master ad buyers. The rest need help as quickly as they can get it to increase their advertising to sales ratio. Around half of these small to medium-​sized businesses aren’t sure they are using the right media mix for their target customers. This doubt is likely caused by a lack of online local advertising. Even worse, these businesses don’t know if what they are doing is working. 

This situation begs for a consultative sales approach. Over 40% of prospects are open to trying something new. Before you reach out to local SMBs with your pitch, make sure you are delivering what they want. In the 2019 SMB Purchase Survey from SalesFuel, 59% of decision-​makers want you to know your product and 45% want you to provide ideas that are relevant to their business.

To do that, check out the Digital Audit available at AdMall from SalesFuel. With that information, you can show prospects how they stack up digitally against their local competitors.