Last month, BrightLocal released some research looking at SMBs' marketing strategies and budgets. It found that 34% of respondents allocate less than 10% of their marketing budgets to online channels while 50% allocate less than 30% and only 29% allocate over 70%.
We spoke with BrightLocal CEO Myles Anderson about some of the study's findings. He told us, “I found this figure a little perplexing when you consider the other responses SMBs gave. 75% said online was effective at bringing in new customers & 3 of top 4 most effective marketing channels are ‘digital’. Yet SMBs allocate a disproportionately low % of their marketing budgets online. I believe the reason is a combination of a few factors.”
“Many business owners handle it themselves so don’t assign a monetary budget to online marketing,” he said. “The survey showed that 64% of business owners handle their internet marketing themselves. Online marketing isn’t applicable or doesn’t work for some businesses so they don’t invest. Some businesses rely solely on Word of Mouth to bring in new customers so don’t invest in online. Budgets are too low to play in the online arena.”
BrightLocal has since come out with some follow-up research taking a closer look at data and comparing responses based on the size of the SMBs that took part in the survey. It found, for one, that there is a direct correlation between the number of employees the business has and the monthly marketing budget.
Here's a look at company size vs. planned spend on internet marketing for 2015:
"From further analysis we can see that larger organizations are more bullish about increasing their online spend, while smaller (which make up the majority of our respondents), are less assertive," writes BrightLocal's Ross Marchant. "Not only is there a higher sense of uncertainty in the group, but there are far more who confidently say they will not increase their online marketing spend.
"The question is whether the increased uncertainty comes from external factors affecting their future planning, or whether they simply don’t feel that the ROI from internet marketing is adequate enough," he adds.
While 94% of SMBs with 50+ employees say internet marketing is "effective" or "very effective," 30% of those running the business on their own say it's simply ‘not effective’. When you have to do everything, it's not hard to understand why that might be.
Image via BrightLocal