Because It’s ‘Too Complicated’ and ‘Time Consuming’
Despite massive growth in digital marketing in recent years, new research from Brandmuscle shows that local small and medium sized businesses (SMBs) are struggling to adopt new media tactics when compared to their larger national counterparts.
Chief marketing officers anticipate 75 percent of their budgets will be allocated toward digital tactics over the next five years, according to Accenture. Analysts at BIA/Kelsey expect US-based social advertising will reach $15 billion in the same time frame. Nevertheless, Brandmuscle reports that social media and other forms of online marketing are still viewed as being overly complicated and time consuming by local small businesses, who continue to favor more established marketing tactics such as local events, direct mail and coupons.
“Consumers are shifting the way they make purchases, with some reports estimating that as many as 80 percent begin their search for products and services online,” said Clarke Smith, Brandmuscle’s chief strategy officer. “Based on our research, we see a big opportunity for national brand marketers to help local affiliates reach these consumers with digital marketing tactics.”
About the Study:
The 2014 Brandmuscle State of Local Marketing Report surveyed hundreds of local dealers, agents and franchisees across a wide range of industries and asked them to share insights about their local marketing experiences. Brandmuscle compared the results to trends identified by tracking over $2 billion in co-op and channel investments made by Brandmuscle clients over the last three years. The result is a comprehensive national survey on the current state of local marketing across social media, digital media, print media, direct mail, events and more.
Highlights of The 2014 Brandmuscle State of Local Marketing Report include the following:
Some Established Marketing Tactics Are Highly Rated
- -Local small businesses deem some of the most tried and true marketing tactics as most effective. In terms of overall satisfaction, top rated tactics include Local Events, Coupons, Billboards and Email.
- -The most frequently used tactics are Coupons (83%), Direct Mail/Postcards (81%), Local Events (79%), Email (72%) and Websites (72%).
- -Least frequently used marketing tactics include Daily Deals (e.g., Groupon) (29%), Magazine Advertising (45%), Billboards (45%), non-traditional advertising (pizza box toppers, gas pump toppers, vehicle wraps) (47%) and Television (50%).
Traditional Media Leaves Many Dissatisfied
- -“Old media” is taking it on the chin when it comes to performance. Small businesses are least satisfied with Magazine Advertising, Newspaper Advertising and Yellow Pages listings.
- -Traditional media costs big money. “Expense” is the top reason local affiliates are shying away from Television, Billboards, Radio, Newspaper Advertising and Yellow Pages listings.
Digital and Social Media Adoption Still Lags
- -Adoption rates for digital and social tactics remain relatively low. 40% of local affiliates don’t use Keyword Search, 37% don’t use Facebook and 57% don’t use Twitter.
- -New media is too complicated and time consuming. Affiliates cited complexity as the top reason they don’t invest in Twitter, Facebook, Online Advertising and Online Keyword Search.
- -Despite a relatively high adoption rate (72%), one out of four local businesses we surveyed (28%) still doesn’t have a website.
Local Marketing Budgets Are Growing
- -Marketing budgets are growing, with 33% of respondents saying that their budgets are increasing by more than 10% and more than half (52%) saying their marketing budgets will remain about the same.
- -Overwhelmingly, businesses are using marketing to generate new business. 83% say the top reason is to generate new leads and new customers.
“According to our study, the primary reason local affiliates avoid online marketing is because it is too complicated or time consuming,'” said Smith. “National brand marketers are in a unique position to help their local affiliates make the journey to online marketing, which when executed correctly can be both cost-effective and measurable — two key considerations when attempting to maximize the ROI of smaller budgets.”