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Small Businesses Strapped for Time, Cash Seek Marketing Efficiency

Small businesses want vendors to target their needs more directly

February 26, 2013

Small-business owners (SBOs) are a diverse bunch that includes more women, immigrants and young people than one finds atop big corporations. But what many have in common are modest levels of marketing expertise and technological know-how, according to a new eMarketer report, “Small Businesses as Tough B2B Customers: Shaky in Their Own Marketing, Critical of Marketing Aimed at Them.”

It’s evident that marketing is important to small-business owners. A May 2012 survey conducted by Constant Contact, which helps small businesses with email marketing and social media, asked what keeps SMOs up at night. The top response—from 76% of respondents—was “how to attract new customers.”

Though traditional media such as direct mail still claim a majority of small companies’ marketing dollars, digital spending is substantial. A Q3 2012 survey of small and medium-sized businesses (SMBs) by BIA/Kelsey found that they devoted an average of 29% of their marketing budgets to digital media.

In December 2012 and January 2013, Borrell Associates took a detailed look at the online advertising SMBs planned to invest in during 2013. Ads on Facebook and run-of-site banner ads were the leading categories.

Since SBOs are often anything but digital experts, their choice of channels may reflect personal comfort levels rather than a systematic calculation of return on investment.

It’s not surprising, then, that many rely on email as a marketing tool. In a November 2012 Ad-ology Research survey, 26.9% of respondents said email was the medium on which they spent the largest share of their ad budget, far ahead of all other digital media.

These days, one would assume even the smallest company would have a website. But Ad-ology found that three in 10 small businesses did not.

As for social media, Constant Contact’s Mark Schmulen, general manager of social media, said the tough economy has boosted SBOs’ adoption of social media, “but probably for the wrong reasons. The perception is that social media marketing is free.” But success on social platforms requires “time and energy—and often money,” he said.

Tight budgets notwithstanding, SBOs would likely be more inclined to open their wallets if the marketing aimed at them struck a chord—but it often does not. Small-business owners complain that companies don’t market to them effectively or make the effort to understand their business.

In buying things, owners aren’t tapping a line in an institutional budget. “When they spend money for their business, it’s like pulling money right out of their own pocketbook,” said Schmulen. Thus, it’s crucial for marketers to convince a small-business owner that a product or service isn’t merely good in the abstract but is good for that person’s specific business.

The full report, “Small Businesses as Tough B2B Customers: Shaky in Their Own Marketing, Critical of Marketing Aimed at Them” also answers these key questions:

  • What is the demographic mix among SBOs?
  • How skilled are SBOs at marketing their businesses?
  • What sorts of technology do SBOs use, and how digitally adept are they?
  • How do SBOs feel about the ways big companies try to sell them goods and services?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.

Check out today’s other articles, “Recruiters Rely More on Social Media for Talent” and “UK Marketers Increase Search Budgets.”


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