Small business owners are feeling optimistic about the future. Borrell Associates regularly surveys a pool of small business operators to gauge their feelings about key trends in advertising and marketing. In the firm's latest report, SMB owners say that both 2014 and 2015 should be good revenue years and to generate these sales increases they’ll be making some changes in their advertising mix.
Of the 900 SMBs that responded to the Borrell survey, 64% are optimistic or very optimistic for coming year. About 58% believe that 2015 holds promise for growth, however, over 50% anticipate having trouble hiring good people.
The average SMB in this survey generates about $2.28 million in annual revenue. Of that, about $88,000, 3.9%, is spent on direct media buying. Another $9,000, or .4%, is spent on other marketing activity. These numbers indicate that the typical SMB spends 4.3% of revenue on advertising and marketing.
The top formats that most SMBs are currently buying include:
- Digital 25%
- Newspaper 19%
- Radio 12%
- Local TV 12%
These business owners like to spread their buying across several formats with 39% purchasing between 3–5 different types of media on a regular basis. Going forward, 40% of SMBs will increase the funds they allocate to various digital formats. About 20% also plan to spend more on direct mail and mobile advertising.
One format that was all the rage a couple of years ago has not made big inroads with SMBs. Only 21% of these businesses are engaging in daily deal promotions. This low number may have to do with satisfaction. Of those who have tried the format, only 16% say they were very satisfied.
Another big concern in the retail industry this year has been the showrooming trend. Analysts have worried that small retailers may not be able to compete with online retailers when they are fighting for shoppers who are armed with real-time pricing information via a smartphone app. SMBs report they have noticed showrooming is taking place in their stores but only 9% say that the trend is hurting their sales.
If you're working with SMBs, what do you think their biggest marketing challenge will be in 2014?