SMB Data Point of the Week: How Do SMBs Determine How Much to Spend on Advertising?

SMBs use various factors to determine ad spend – profitability being key to how much they spend. With so many choices, the next deciding factor is based on how well the advertising meets the exposure to customers and level of engagement with customers they want to receive. SMBs will churn or jump to a new vendor if it doesn’t meet these standards. In selling to SMBs, reporting on ad performance that clearly shows customer engagement and new customer metrics is important churn protection. In our current Local Commerce Monitor survey of SMBs (Q3/2015), we asked respondents to rank various factors that go into determining their annual ad spend. “The amount of money available after other expenses are paid” was the top rated factor overall, with 63.9% of SMBs surveyed ranking it as their first, second or third most important factor. “The exposure and customer engagement we want to achieve” was ranked 1st the most, but was the second highest overall. Money was again the important consideration in the third ranked factor – expected revenues.

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