Column: Why doing more with less means something a little different for small businesses and their marketing

By Corey Eilliot, Borrell Associates 

Oh, it’s a tired phrase, isn’t it? Especially for anyone involved in local traditional media: “Doing More with Less.” It has traditionally meant cutting resources while maintaining or even surpassing previous levels of service. However, for local business owners, it means something a little different when applied to their own marketing.

The findings from a 3,500+ local advertiser survey conducted during the summer of 2018 suggests that the one thing SMBs are doing MORE of is, in fact, advertising. Ten years ago, local businesses were utilizing about five different sources for marketing. Today, that number has grown to eight.

And for anyone involved in local media, the reason isn’t very surprising. The overall number of choices available to any one business has sky-rocketed in that time. Of course, the clear majority of these choices have been digital in nature.  And therein lies a clue to “with less” part.

In this case, “with less” refers to budgetary outlay. Local advertisers are simply spending less with digital resources than they did with non-digital.  In fact, non-digital types of media are being targeted for cuts to fund more digital initiatives. But it is not because they do not work, but because they are viewed as costly when compared with digital media.

The average annual budget for social media is around $6,000 while the average budget for radio is $25,700. For banner advertising, the average is about $10,000 while a direct mail campaign is upwards of $23,000. But this does not mean local advertisers are dropping all things non-digital for all things digital.  In fact, they know it is about a mix.

In fact, it seems the idea of a good media mix is a fixture on Main Street. This year, 90% of local advertisers claim they are using both digital and non-digital forms of advertising. Furthermore, the percentage of SMBs that claim they are using ONLY non-digital forms of advertising dropped from 22% last year to 5% this year.

Out of the top 15media local advertisers bought last year, 6 of them were digital and 9 of them were non-digital – with the #1 spot going to Social Media Advertising.

Q: Which of the following types of advertising/marketing did your business use last year?  N = 3,854

But it is safe to say things might not be divided equally between digital and non-digital expenditures. Especially when it comes to thinking about future spending.

The percentage of local advertisers who claim they will cut non-digital forms of media should give some traditional media folks pause. For instance, one-third of newspaper advertisers in the survey say they plan on reducing or eliminating their newspaper buys.

NOTE: Although it appears as if SMBs are flocking to Cinema advertising, remember that each of these are based on the businesses who purchased that form of advertising in the past year.

Q: Below is a list of the advertising/marketing your business used in 2017. What are your plans for using these media types in 2018??  N = 3,854

Conversely, when SMBs were asked what kind of media they intend on increasing – a lot of different digital options were cited by a good percentage of local advertisers.

Q: Below is a list of the advertising/marketing your business used in 2017. What are your plans for using these media types in 2018??  N = 3,854

And here is where we see a keen interest in online video this year. Most local advertisers who participated in this survey admittedly do not have a lot of experience in online video advertising but A) for those who do – they love it and B) for those who haven’t yet – there is a desire to learn more.

The #1 reason (cited by 70% of video advertisers) local advertisers engage in online video is that it “grabs attention.” This was closely followed by “gets my message across” at 67%. Of course, there is nothing in the data that explains how SMBs prove any of those perceptions – but nonetheless, these strong opinions suggest that online video advertising is the next shiny object.

And perhaps what is even MORE revealing is local advertisers’ view on the best way to distribute video content. Spoiler alert: TV stations are not #1.

Q: Where did you distribute video content in 2017? Which method worked best?  N = 701

We have all learned that in the past couple of years, all things social meida related have arrived on the doorsteps of SMBs all over the country. Facebook and others have SMB initatives. And most make it extrememly easy for a local business to advertise online. And those that have taken part, claim to see positive results, with 41% of Facebook advertisers claiming the platform is very effective and 26% saying it is even more effective than it was last year.

So, it probably should not come as a surprise that local advertisers claim that their own social media pages are the best place to distribute their video content. And, in hands-on experimentation, they have already learned a few things. 65% of those video advertisers used professionally produced videos and 57% employed videos of 10 seconds or less. So though there might be less opportunity for media companies to distribute videos, there is an opportunity for those that can produce professional short clips.

And as far as social media presence goes? Well, Facebook is pretty standard now, with 9 out of 10 local advertisers having a Facebook presence. However, the most interesting development is what has happened to involvement with Instagram in the past year. Now, one out of two local advertisers have a presence on Instagram – up from 40% just one year ago.

SMBs are not standing still. Participation in social media sites has given them confidence. They are mixing digital and non-digital now more than ever – and it appears as if they are willing to cut more expensive non-digital choices for less expensive digital ones.

Sure, they are doing more with less – but figuring out if the result is better is going to take some time.

The information contained in this article came from Borrell Associates 2018 Local Advertiser Survey – including responses from 3,568 local advertisers across the nation.