where smbs really advertise and where the plan to spend more next year

Tomorrow’s Media, Understood Today

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Q2 and Q3 2013 SurveysQ2 and Q3 2013 SurveysSMB Marketing PatternsSMB Marketing Patterns

December 2013

Background & MethodologyBackground & Methodology This survey is part of ongoing Borrell surveys to monitor changes in advertising patterns at the local level. Questions generally remain the same from quarter to quarter, allowing us to identify trends Respondents for this wave were solicited from current, past and

prospective advertising clients of 14 local media companies across a wide geographic region of the U.S. Local media companies sent invitations to participate; Borrell collected and analyzed results. Surveys were conducted May 1 through Aug. 23, 2013. There were 903 respondents and 440 completions. Respondents were offered an incentive to participate (an iPad, awarded by random drawing).

More information and details available at www.borrellassociates.com or by emailing [email protected].

http://www.borrellassociates.com/

mailto:[email protected]

SMBs are hopeful. 64% are “very” or “somewhat” optimistic about near-term (12 months) improvement to the local economy.

Some have dropped out of newspapers altogether. The percentage who buy print newspaper advertising declined from 87% in 2011 to 71% in the latest survey.

Digital spending continues to rise significantly. In 2011 digital share of ad budgets was 15%; in our latest survey, SMBs reported 19%. This equates to a 33% increase in digital ad budgets in two years.

Facebook rules. More than 83% use Facebook, vs. 64% two years ago.

Mobile marketing is the new black. 85% say a mobile presence is important.

Deals are languishing. 77% aren’t participating; only half who do are satisfied. “Showrooming” no big whoop. 9% of SMBs said it hurts business; 24% believe it helps.

The HighlightsThe Highlights

www.borrellassociates.com

40. How would you rate your overall expectations about local area economic conditions over the next few time periods ? N = 477

Most SMBs optimistic about economy Most SMBs optimistic about economy

17%

21%

27%

41%43%

39%

24%

19% 19%

14% 13%

9%

2% 2%3%

Next 6 months Next 12 months Next 2 years

Very optimistic Somewhat optimisticNeutral Somewhat pessimisticVery pessimistic

16%

16%

35%

18%

10%

7%

Don’t know

Very difficult

Somewhat difficult

Neither difficult nor easy

Somewhat easy

Very easy

Finding Qualifed Employees

Sales Reps Call Every DaySales Reps Call Every Day

3. Many different media work to earn your business as an advertiser. In an average month, how many total attempts are made to speak with or reach you about any advertising opportunity? N = 804

4. In an average month, how many advertising sales people do you speak to, in person or on the phone, among these incoming efforts? N = 830

Attempts:Mean : 18.6

Median :8

Pitches Taken:Mean : 6.5

0%

10%

20%

30%

40%

50%

60%

0 1-4 5-9 10-14 15-19 20-24 25-29 30-49 50 or more

Don't know/Not

sure

Contact Attempts Pitches Taken

On average, SMBs get five sales calls per week and listen to only one of them.


1. To begin, in how many different media outlets do you currently advertise? N = 9035. Compared with what you spent on advertising in 2012, will you spend more money, less money, or about the same in 2013? N = 827

Moderate Growth for YOY SpendingModerate Growth for YOY Spending

27%

47%

19%

8%

Spend more money

Spend the same amount

Spend less money Don't know

Plans

1%

7%

6%

18%

39%

14%

8%

8%

Don't know/Not sure

15 or more

10-14

6-9

3-5

2

1

None

Ads Bought

Avg. Media Bought = 5.0


6. Please estimate what portion of your total ad spending next year will be spent on the media listed below. Estimate the PERCENTAGE each will get in 2013. [Amounts should total to 100%.] N = 657

Share of Ad Budgets: Digital is No. 2Share of Ad Budgets: Digital is No. 2(among this sample)(among this sample)

22%

19%

12%

9%

7%8%

5%3% 3%

3%

1% 1%

8%

NOTE: Borrell’s spending data for the entire U.S. indicatesthat digital ad spending now comprises 25% of local ad budgets, newspapers 19%, radio 12%, and local TV 12%.The difference in the chart below is likely due to the fact thatresponses were from highly localized, smaller businesses.

Total Marketing Expenditures on the RiseTotal Marketing Expenditures on the Rise

$79,713

$88,277

$6,000 $9,000

2012 Total Ad and Marketing Spend 2013 Total Ad and Marketing Spend

Mean Median

Direct Advertising

68.3%

"Non-Ad" Marketing

36%

Direct vs. Non-AdGross Revenues $ 2,283,300

Total Combined Budgets $ 97,100

Net of Revs 4.25%

38. Not all advertising and marketing money is spent on ads alone; what percentage of your advertising and

marketing budgets is spent on advertising versus "non-advertising" expenses? [Total should be 100%.] N=399

37. What do you expect your total direct spend on advertising and marketing efforts will have been in 2012 and will be in 2013 N=351

+ 10.7%


7. Thinking of your total advertising budget, as compared with 2012, do you think your spending will increase, stay the same, or decrease in the following categories in 2013: [Choose one response for each item listed below.] N = 689

Online Spending is an Energizer BunnyOnline Spending is an Energizer Bunnyit keeps going and going and…it keeps going and going and…

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Online/Digital Mobile Direct Mail Radio Local Newspapers

Other Local Print Pub

Outdoor and OOH

Broadcast TV Stations

Cable TV Stations

Print Directories

Cinema Telemarketing Other

Increase Stay the same Decrease


10. Which of the following ONLINE MARKETING do you expect to engage in 2013? [Select all that apply.] N = 652

Top Activities: ‘Own Website’ & Social MediaTop Activities: ‘Own Website’ & Social Media


36 Which of the following sources best provide you with new customers? That is, how do people most often hear about your services and products who have not shopped with you or visited your business before? [Select all that apply.] N = 498

No. 2 Source of Customers: My WebsiteNo. 2 Source of Customers: My Website

2%8%

12%13%

14%17%17%

21%22%

25%26%

36%39%

43%46%

61%68%

73%

Mobile campaignsOther (please specify)

TV adsOutdoor/Billboard

Online adsYellow Pages

Industry organizationsRadio ads

Other print media adsDirect mail

Email marketingSocial media

Print newspaper adsEvents

Professional referralsReferrals from friends and family

Company websiteReferrals from other customers

Customer Source


12. Thinking about your company's investments in ONLINE and MOBILE advertising and marketing, what percent of your total ONLINE and MOBILE ad and marketing spend do you expect will go to each type listed below in your spending for 2013? [Amounts should total 100%.] N = 499

Largest Share of Funds/Focus: My WebsiteLargest Share of Funds/Focus: My Website

14%

9%

8%

19%

20%

18%

21%

18%

25%

33%

50%

55%

75%

Other Online advertising and marketing

Online/Streaming Video

Online classifieds

Business Directory listings

Banner/Display ads - Targeted Display

Sponsorships

Paid search/Keywords (SEM)

Mobile (portion devoted to any type …

Banner/Display ads - Run of Sites (ROS)

Search engine optimization (SEO)

Email

Social Media

Company website

Any Spend

5%

1%

4%

2%

3%

4%

3%

4%

7%

6%

14%

13%

35%

Other Online advertising and …

Online/Streaming Video

Business Directory listings

Online classifieds

Mobile (portion devoted to any …

Banner/Display ads - Targeted …

Sponsorships

Paid search/Keywords (SEM)

Search engine optimization (SEO)

Banner/Display ads - Run of Sites …

Social Media

Email

Company website

Spend Share


13 Does your company maintain a Social Network presence or page (such as Facebook, LinkedIn, Twitter, etc.)? N = 546

Social Networks Reaching UbiquitySocial Networks Reaching Ubiquity

Yes83%

No17%

Don't know

1%

Mean Number of Fans: 1,198Median Number of Fans : 500

15. Which of the following are a part of the key metrics that you use to measure the success of your social marketing programs?

[Select all that apply.] N = 431

1%

2%

24%

34%

39%

39%

45%

48%

57%

59%

None of above

Other (please specify)

Store visits

Sales volume

New Lead generation

Visits to business Social Network pages

New contact information like email, phone, etc.

Visits to Business website

Additional fans, friends, followers

New Customers

Key Metrics

14 How many Friends, Fans, Followers, or other users does your business Social Network have? N = 431


29. On which, if any, of the following websites does your business or company have a listing that your business or company wrote and placed? N = 509

20%

4%

3%

10%

11%

15%

20%

19%

33%

42%

70%

None of above

Other (please specify)

Tumblr

Bing

Foursquare

Pinterest

Yelp

Yahoo Local

Twitter

GooglePlaces/Google+

Facebook or FacebookConnect

Social Sites Used

Facebook is Top Dog, but Google+ in the MixFacebook is Top Dog, but Google+ in the Mix


35. Which of these digital and electronic programs or services will you use or are considering using in 2013? [Select one response for each item.] N = 478

‘‘Social Search’ is on SMBs’ RadarSocial Search’ is on SMBs’ Radar

24%21% 22%

11%

26% 25%

9%

23%

50%55%

70%66%

"Social Search" tools Reputation management/monitoring

Customer Accessible in-store/on facility wi-fi

Location-based advertising on mobile

Will use in 2013 Considering using in 2013 Neither use nor considering


22. Have you participated in a "Deal of the Day" or similar program where consumers purchase a certificate or coupon at a discount for your business? N = 514How satisfied have you been with your overall "Deal of the Day" experience? N = 120

Deals Get Mixed ResultsDeals Get Mixed Results

No 77%

Yes 21%

Don’t Know

2%

Deals

16%

33% 32%

14%

6%

Very satisfied Somewhat satisfied

Not very satisfied

Not at all satisfied

Don't know/No answer

Satisfaction


32. How important is it to your company to have "high visibility" on web and mobile platforms so customers and prospects can easily find your website and your physical location? N = 308

Mobile is Becoming the New BlackMobile is Becoming the New Black

51%

34%

8%5%

3%

Very important Somewhat important Not very important Not at all important Don't know/Does not apply to us

Importance of Digital Visibility


16. Has your company been pitched by any vendors to conduct mobile-based advertising or marketing campaigns or campaigns with mobile elements in the past 12 months? N = 525

Demand for Mobile Marketing is Pent UpDemand for Mobile Marketing is Pent Up

Yes57%

No33%

Don't know 10%

Pitched Mobile

17%

30%27%

18%

8%

Very likely Somewhat likely

Not very likely Not at all likely

Don’t know/Not

sure

Likelihood Use Mobile Next 12

Yes 19%

No78%

Don't know

4%

Used Mobile


26. Does your business maintain a brick and mortar location from which you sell physical goods or provide services

directly to customers or other businesses? N = 511

Impact From “Showrooming”Impact From “Showrooming”

Yes 79%

No 22%

Physical Location

15%11%

21%

10%

40%

4%

Very often Somewhat often

Not very often Not at all often

Does not apply

Don't know

See Customers “Showrooming”

24%

9%17%

42%

8%

Generally helps business and

sales

Generally hurts business and

sales

Little or no impact positive

or negative

Does not apply to our business

Don't know

Impact of “Showrooming”

“Showrooming” is the process in which a customer uses a Smartphone while in a store to evaluate and compare product pricing or purchase options.

27. How often do you see your customers "showrooming? N = 40328. Is it your experience that showrooming helps or hurts your business and sales? N = 402


36. Does your company write and post content for Facebook, business listings, business reviews, advertorial (native) content or other placements?

N = 511

SMBs Directly Manage Digital and MobileSMBs Directly Manage Digital and Mobile

31. How easy or difficult are any of the following in terms of maintaining an accurate and effective presence on the Web and in directories? N = 498


31. How easy or difficult are any of the following in terms of maintaining an accurate and effective presence on the Web and in directories? N = 498

Detail on Managing Digital PresenceDetail on Managing Digital Presence

0%

5%

10%

15%

20%

25%

30%

35%

Creating text to post

Keeping up with Facebook

Monitoring comments about your business on various forums

Monitoring placed listings

Keeping up with Twitter

Monitoring "free" listing not

submitted by your staff to an online

publisher

Buying keywords Maintaining a presence on

mobile phones and apps

Very easy Somewhat easy Neither easy nor difficult Somewhat difficult Very difficult


33. Does your business maintain a "current customer" database or list for use in marketing and sales? N = 508

Two-Thirds Collect Customer Data Two-Thirds Collect Customer Data (but 2/3 don’t appear to be mining it)(but 2/3 don’t appear to be mining it)

Yes77%

No21%

Don't know

2%

Customer Database

Yes21%

No77%

Don't know

1%

Loyalty Programs

34. Does your store or business maintain a formal "loyalty rewards" or "frequent buyer" program? N = 508


39. Which of the following advertising and marketing support services do you currently purchase or would like to have available from your media providers? [Select all that apply.] N = 477

The Big Draw: Website Design & HostingThe Big Draw: Website Design & Hosting

29%

5%

10%

11%

12%

12%

15%

15%

17%

18%

19%

24%

26%

33%

34%

None of these

Transaction enabling services

Self-serve display advertising solutions

Media campaign management

Strategic planning services

Media planning and placement

Video production

Market intelligence

Event marketing support

Email solutions support

Training/education/workshops in digital marketing for small …

Graphic design services

Lead generation programs

Social networking support (building and updating Facebook …

Website design and hosting

Digital Services Bought or Sought

04/12/23© Borrell Inc., 2013. All rights reserved 24

Do you think Do you think YOUR Advertisers Are Different?YOUR Advertisers Are Different?

Borrell conducts thousands of SMB surveys quarterly in local markets. Find out what YOUR advertisers are

planning to do next year.

For more information contactGreg Harmon, senior research analyst

[email protected]

Ad Spending In Your Market

Test Drive at www.adspending.com, or call 757-221-6641

http://www.adspending.com/

Questions?Questions?

Greg HarmonSenior Research AnalystBorrell Associates, Inc

[email protected]

Jim Brown

Vice President, Sales

Borrell Associates, Inc

[email protected]

757-472-0555

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where smbs really advertise and where the plan to spend more next year

Marketing

total advertising budget

local ad budgets

advertising patterns

marketing budgets

direct advertising

digital ad spending

nonad marketing

total marketing expenditures