Study: 32% of SMBs Spend Less Than $100/Month on Marketing


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A study published today by and BrightLocal is, perhaps, the most wide-ranging and specific study on small business marketing, well, ever. It reveals, in great detail, why SMBs market, how they market, and what their plans are for future marketing.

This study is ESSENTIAL reading for any agency that wants SMB or local clients.

The study surveyed 20,000 Chamber of Commerce businesses and found several interesting things. We’ll list a few of the findings below:

– SMBs spend an average of 46% of their marketing budget on what they would classify as ‘digital marketing’

This is a good thing! SMBs are seeing the value of online marketing and increasingly leaving less effective offline tactics behind.

The number should be higher though. Our data shows, clearly, that online tactics work better than offline tactics. Direct mail is the only real exception to that rule. Direct mail works great.

– 24% of SMBs spend less than 10% of their marketing budget on digital marketing

– Industries like Restaurants, Hotels, and Professional Services (Dentists, Lawyers, etc.) are the most likely to conduct online advertising.

– The average SMB spends $400/month on marketing

$400/month certainly isn’t a huge number, but it also isn’t anything to sneeze at. This should be a heartening number for local agencies. At $400/month All you really need is 10-15 clients to have a viable business.

The other thing worth noting here is the cost of call tracking relative to that budget. The average local client is spending $400/month with agencies. LogMyCalls offers call tracking to agencies–everything included–for only $6.99 per number. That’s a cost that is very easy to roll into your offerings or pass along to your clients. They won’t bat an eye at $6.99/number.

– 32% of SMBs spend less than $100/month on marketing

These are predominantly very small businesses in very small towns. For example, I grew up in a very small town that had one mechanic in it. This mechanic, I’m absolutely certain, has a marketing budget of $0. But, my hometown and the surrounding towns, are so small that he doesn’t need to market. Everyone knows him and knows that he does great work.

I am, however, surprised that the number is 32%. That seems like a high percentage to me. It seems like the percentage of SMBs that spend less than $100/month on marketing should be closer to 8%.

– 6% of SMBs spend more than $1000/month on marketing

In our experience, these are tech companies, lawyers, dentists, orthodontists, etc.

– SMBs say the LEAST effective marketing channels are Local Directories, Local Newspaper Advertising, PPC, Local Radio, and Local TV

Our data backs up this finding entirely. Local yellow pages, radio and TV are just not effective. It is rather surprising to see PPC on this list though.

– The SMBs say the MOST effective marketing channels are Word of Mouth marketing, SEO, Online Local Directories, and Email Marketing

local study

Word of Mouth can’t be beat. Remember though that Word of Mouth can be traditional offline word of mouth OR it can be Yelp reviews, Google+ Local reviews, TripAdvisor reviews, or any social media channel.

– 79% of SMBs have NO plans to increase spend on digital marketing channels

One of the statistics we’ve quoted for a long time comes from Business News Daily: 73% of SMBs don’t know how their customers find them.

It strikes me that these two statistics are connected. Most SMBs don’t track their marketing’s effectiveness. They don’t know what works. They don’t know what generates calls or web traffic. If they knew what worked, they would spend more money on these things.

(Enter call tracking and Conversation Analytics sales pitch here).

– 32% of SMBs are contacted by a new search agency every single day

– 75% of SMBs are contacted at least 1 time per week by a search agency

local agency

Can you say market saturation? There are new local SEO and PPC firms popping up nearly every day. The trick, if you’re one of these agencies, is differentiating yourself from the competiton. What can you show these SMBs to convince them to work with you?

The answer to that question is data.

The agencies that have data at their disposal–web analytics and call tracking data–are the agencies that can persuade a local business to work with them.

Imagine if you could tell a local business that you could generate 100 calls for them each month (or whatever). You could woo them. And you could keep them.

And with Conversation Analytics you can even track how many appointments or purchases you generated for them.

Wow. Talk about differentiation.

Republished with author's permission from original post.

McKay Allen
LogMyCalls is the next generation of call tracking and marketing automation. The award winning product from ContactPoint, LogMyCalls provides lead scoring, conversion rate tracking and close rate mapping. For more information visit and call (866) 811-8880.


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