With the challenges of current economic conditions and rapid advances in technology, small business owners are facing a more volatile and competitive marketplace than ever before. Traditional marketing and advertising platforms are not as effective as they once were as audiences’ attention is increasingly focused in the digital space. Consumers have less disposable income, and businesses are competing harder than ever for it. Gaining a competitive advantage and connecting with customers is becoming more important than ever, and many business owners are looking online to do so. Online marketing and advertising has grown significantly over the past 12 months, and is forecasted to continue on the same trajectory for at least the next 12.
Business owners are investing online in three main areas: web page design and maintenance, paid advertising, and social media. These three platforms help businesses build a solid online foundation and convert more customers.
Web page design and maintenance is one of the avenues experiencing the greatest growth. A recent study by BIA Kelsey showed that small business spending on their websites was up around 30% from 2011 to 2012. But while businesses can easily increase their online advertising budgets and drive traffic to their websites, there is no return on their investments if their sites aren’t converting visitors into customers. Businesses that have websites optimized for search engine optimization (SEO) rank higher on search engine results pages and convert visitors into customers at a higher rate. In addition, a report by Entrepreneur.com states that 55% of small businesses now have a blog. Properly managing and maintaining these blogs is an important part of engaging with consumers and positively impacting a company’s SEO.
The same survey reported that in 2007 the average small business used three types of media for advertising and promotion, while in 2012 it used 5.8 types of media. Many marketing experts are agree that businesses need to spread their marketing budgets across more platforms in order to obtain maximum exposure to consumers. They believe that reaching consumers in more of the places they are searching will help the overall success of the company. A study by media research firm Borrell and Associates reports the the average small- to medium-sized business spends $6,800 annually for online paid search and display ads. These platforms continue to have success because they can be highly targeted to consumers more likely to be interested in a company’s product or service, and it is easy to track the performance metrics of these platforms.
Social media has been the buzzword for the last decade, and close to 90% of small businesses are on Facebook, reports Entrepreneur.com. They also report that 36% of small businesses pay for publishing and analytics tools. As more businesses begin to realize the potential benefits of social media, this percentage will increase. Entrepeneur.com also reported that four times as many businesses increased their social media budgets as decreased them over the past year, and 66% of businesses are spending more time on social media now than they did a year ago. The BIA Kelsey study also reports that the number of businesses advertising on Facebook has increased 40% since January 2012. All of these statistics reinforce the fact that many businesses are turning to social media as a marketing platform, and many are backing their efforts with an established budget.
The online marketplace is quickly becoming the most competitive advertising arena. Business owners with a digital marketing strategy and willingness to invest in the right tools and platforms will reap the benefits now and be better positioned to compete in the future.