Medium-​Sized Businesses Are Big Spenders in Local Ad Markets

BY Kathy Crosett
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You’re used to pounding the pavement to call on local small businesses about their ad spending.  And you know you'll need to win a lot of small business accounts to make your quota. Are you leaving money on the table by neglecting larger businesses that advertise in the local market? Maybe so, according to new research from BIA Advisory Services.

This fall, BIA released its 2018 Survey of Advertising and Marketing (SAM™).  The survey of 1,500 businesses shows that larger firms, those with 500+ employees spend just as much of their ad budget in local markets as smaller businesses do. Scoring just one of these accounts can make a big difference for your bottom line.

Local Ad Market

Celine Matthiessen, BIA’s VP Analysis and Insights and SAM study director, reports “that overall U.S. businesses invest about two-​thirds of their total marketing budgets (promotions plus advertising spending) in advertising on local media ad channels.” Large businesses, not surprising, have large ad budgets. In this study, marketers with 500+ employees spent an average of $4.48 million on advertising and $2.178 million on promotions in the past year. Significantly, 67.3% of that activity took place in the local market. Scoring the ad budget for just one of these businesses, could mean getting an additional $6.658 million in media sales.

By contrast, the typical small business with five to nine employees spends about $10,541 every year on marketing. About $6,334 goes to ads and $4,207 goes to promotions.

Local Media Formats

Business owners tell researchers that they favor the following media formats:

  • Targeted social ads 61.2%
  • Email 49.3%
  • Direct mail 37.6%
  • Direct home household targeting (35.7%)
  • Mobile location aware (35.5%)

In looking at these formats, Matthiessen noticed a trend. Businesses are using media formats that allow them to hyper-​target their audiences. Using this strategy, marketers are maximizing the ROI on their ad budgets. Are your clients making the most of their ad spending, especially in the digital realm? There’s an easy way to find out. Run a Digital Audit, available at AdMall from SalesFuel. Using that resource, you can show your clients the types of digital and social advertising that their target audiences respond to.