Medium-Sized Businesses Are Big Spenders in Local Ad Markets

by | 2 minute read

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.

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-owner of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.