Borrell: SMBs Plan To Spend More Selectively On Social, Event Marketing
On average, SMBs use just three social media networks, while less than half see it as a "smart" investment, says Borrell Associates' Corey Elliott.
Wall Street may be experiencing a high degree of volatility these days, but over on Main Street, SMBs have been feeling more buoyant — and that’s reflected in their ad budgeting, according to a survey by local media and marketing researcher Borrell Associates.
About half of the 1,000 SMBs surveyed by Borrell ahead of its 9th Annual Local Online Advertising Conference in New York (March 12-13) expect spending to hold steady this year, while two-in-five expect spending will increase by more than 5 percent.
Still, the marketing allocations will not exactly be spread evenly among local media, notes Cory Elliott, Borrell’s VP of research. For one thing, SMBs are continuing to gravitate to the “earned media” of social networks versus “paid media” advertising on publishers airwaves, print, and websites.
A quarter of SMBs spent more money on developing content for web and social media than on paid media, which means that more local budgets will be going to marketing services such as consultants.
Rising Social Media Tide Doesn’t Lift All Networks
It’s a trend that Borrell has noted many times over the past few years: the rise of social media marketing in the regional and local space, versus more traditional forms of ad spending. At the end of 2015, Borrell found that “local digital” targeted banners comprised 60 percent of the digital revenue, while “untargeted” banners represented 9 percent as paid search took 14 percent and video attracted 4 percent of SMB dollars.
That has paved the way for “native-social” advertising by SMBs, driven largely by Facebook, which has placed a special emphasis on local business marketing.
But in the social space, as Facebook and Instagram have battled Snapchat and Pinterest for what seemed to be a growing piece of the local marketing spending pie, relative newcomers like self-declared Instragram challenger Vero could have a tougher time bringing in ad dollars.
According to the Borrell survey, even as social media becomes more integral to SMBs’ marketing, brands don’t feel the need to be “everywhere social.” Most survey respondents participated in fewer social networks in 2017. The most popular is Facebook, but retailers use Instagram, while B2B companies use LinkedIn, and “master marketers” use YouTube.
On average, SMBs use just three social media networks, while less than half see it as a “smart” investment.
Event Marketing Takes Center Stage
“At the end of 2016 we asked panelists to predict what would happen with social media in 2017,” Elliott said. “At that time, the panel assigned an average probability of 71 percent that, in 2017, their business would focus more intently on one or two social media platforms rather than trying to maintain a presence on all of them.”
One year later, Borrell checked back to see what actually happened.
“The Panel was fairly correct,” the report states. “The average number of social networks used by our SMBs respondents is three. But 82 percent said it was true that, ‘In 2017, my business focused more intently on one or two social media platforms than trying to maintain a presence on all platforms.'”
“What SMBs discovered in the last three years was the value of connecting to a very targeted audience and very small, one-on-one connections,” Elliott said. “Last year we asked, “Hey, where do you get your best leads? What is your number one lead source?” Three out of the top five were referrals, of course, referrals from family, referrals from customers, referrals from other businesses. Let’s chalk that up to word of mouth.
“Then came website, then social media, and then event marketing,” Elliott added. “First of all there’s no pure advertising in any of those things. Social media meant maintaining ‘social media pages.’ I suppose you could probably squeeze an ad in there, but that’s not going to happen regularly. What they’re discovering, especially with event marketing being so high, is that there is value in making that social connection. That’s what exploring social media pages taught them in terms of creating connections with customers.”
As SMBs have gotten used to striking connections, they’ve also discovered that doing so is limited when it comes to making the cash register ring, Elliott said.
“So now, the question for SMBs is, ‘How do you leverage those connections? How do you leverage a very targeted audience rather than the broad audiences that local media publishers have?’ Ultimately, the answer has been, ‘Maybe it’s more important to talk to 100 of the right people than 10,000 general people,” Elliot said. “And that translates into a winnowing down of places and platforms where money is spent.”