Skip to content

LCM logo

One big trend we are seeing in our Local Commerce Monitor (LCM) findings is that low-spending SMBs are taking advantage of the lower price levels of digital and social media and reducing their overall ad spend. This has big implications for traditional media sellers as well as pure plays trying to find the right go to market strategy to reach smaller spenders at scale.

LCM tracks low-spending and high-spending SMBs separately. We call the low-spending SMBs “Core SMBs”, and define them as those spending less than $25,000 annually on advertising and promotion. In Wave 18, we saw a continuation of the downward pull on ad spending by Core SMBs due to the lower price points of digital media in general and social media in particular. We detail these findings in a new report, “LCM 18: Advertising Trends of Core SMBs,” available to BIA/Kelsey clients.

At around $2,500, average media spend by Core SMBs is down around 17 percent from the $3,000 average spend in 2011. We’re clearly seeing a de-emphasis on paid media, in favor of social media and other ways to engage customers, a trend that became apparent a year ago, in the LCM Wave 17 findings.

With Core SMBs, digital media, particularly social media, showed strength across the board. Core SMBs indicated bold intentions to increase spending on digital media. Social media achieved new heights in reach (69 percent) and spend (25 percent of total spend).

When asked about service models, 48.3 percent of Core SMBs said they preferred the “Do-it-myself” model, as opposed to the “Do-it-with-me” or “Do-it-for-me” models. This strong reading is a key message for companies serving the lower range of the SMB market.

In the section of the LCM survey about channels, we explored several behaviors and attitudes. For instance, we saw a big increase in Core SMBs concentrating their online ad purchases through a single channel. A record 82 percent of Core SMBs report using only one channel for purchasing online ad products. (Note: This metric considers “Do-it-myself” a channel).

At the same time, we also saw numerous differences between Core SMBs and high-spending SMBs. For example, there’s a huge gap in the usage level of online services. Only 12 percent of Core SMBs use some type of CRM system, compared to a full 50 percent of high-spending SMBs. Evaluated along with other data from the LCM survey, findings like this are crucial for companies serving the lower range of the SMB market.

Clients of the BIA/Kelsey Advisory Services can find the full report here. Interested in an excerpt? Download one here.

This Post Has One Comment

  1. Steve, great article! I have found that 48.3% of business owners may prefer a “Do-it-myself” model for digital marketing, however most of them will not find the time or have the expertise to execute a successful strategy. The business owners who try to do this themselves actually spend more money in the end than those that find a trusted partnership.

Leave a Reply

Back To Top