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What is Main Street Really Spending on Digital? And Who Are They Spending With?

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Companies at the local level have begun spending vast amounts of money on the basic underlying services needed to support their digital marketing. Companies will spend over five times as much on digital marketing services than they will on digital advertising - costing them $501 billion this year. This report examines the results from our survey of more than 2,000 local advertisers and has uncovered some remarkable insights about what the new marketing environment has done to these so-called SMBs. In addition to what they spend on digital services, these smaller businesses spend an average of 27.9% of their ad budgets on digital media (including social media), and a further 11.3% specifically on mobile advertising. Three out of every five of the businesses surveyed use some form of digital marketing services. This 38-page report includes 30 charts and graphs, plus a 3 page appendix of open ended responses from local advertisers on their biggest challenge in creating and conducting advertising and marketing programs, and a deeper dive into digital services spending in two sample markets. It also provides attention to detail on social media, SMB web presence, projected spending in various categories as compared to larger business and the overall satisfaction by SMBs on the digital services they are purchasing. The executive summary is available for free, here: https://www.borrellassociates.com/industry-papers/papers/2014-digital-marketing-services-outlook-oct-14-detail

Published in: Business

What is Main Street Really Spending on Digital? And Who Are They Spending With?

  1. 1. Tomorrow’s Media, Understood Today www.BorrellAssociates.com 2014 Outlook: Digital Marketing Services SMBs Learn the Cost of Managing Their ‘Own’ Media October 2014
  2. 2. 1 About This Presentation The following presentation is based on: 1. A survey of 2,102 SMBs conducted in August & September 2014. 2. Borrell’s database of marketing expenditures covering 3,000 U.S. counties, found at www.adspending.com. A full analysis of the results can be found in “2014 Digital Marketing Services Outlook” on the Borrell website. © 2014 Borrell
  3. 3. 10/9/2014 © 2014 Borrell 2 Digital Advertising is BIG! More than $95 billion a year Digital Promotions is BIGGER! More than $133 billion a year Combined, both are less than half of…..
  4. 4. © Borrell Inc., 2014. All rights reserved 3 Digital Marketing Services Source: Borrell 2014 Sure, digital advertising is cool and sexy . . . But the ‘dirty’ business of digital services is 5x bigger. $ in Billions
  5. 5. 10/9/2014 © Borrell Inc., 2013. All rights reserved 4 That $501 Billion Universe Has 5 Galaxies This one’s the biggest. 5 DMS Spending Categories
  6. 6. © Borrell Inc., 2014. All rights reserved 5 What’s Included in Each Source: Borrell 2014 $ in Billions Biggest spending category. Most-pitched service.
  7. 7. 10/9/2014 © 2014 Borrell. All rights reserved 6 Is Main Street Really Spending That Much in Digital Services?
  8. 8. 7 3 Out of 5 Said Yes Source: Borrell SMB Survey, Aug.-Sept. 2014 © 2014 Borrell. All rights reserved QUESTION: What types of digital services are you buying? Not everybody!
  9. 9. © Borrell Inc., 2014. All rights reserved 8 Who Isn’t Buying: The S’s. The Sweet Spot: The M’s. Source: Borrell, Dun & Bradstreet; 2014 On average, businesses with fewer than 10 employees spend less than $800 per year on digital services. Yes, that’s PER YEAR.
  10. 10. 10/9/2014 © 2014 Borrell. All rights reserved 9 So, local providers dominate the DMS scene, right? $3 out of $5 are captured by national providers
  11. 11. © Borrell Inc., 2014. All rights reserved 10 National Providers Dominate Source: Borrell SMB Survey, Aug.-Sept. 2014 In every category, more SMBs said they bought from a non-local service provider.
  12. 12. © Borrell Inc., 2014. All rights reserved 11 Who Are These Non-Locals? Source: Borrell SMB Survey, Aug.-Sept. 2014 We asked SMBs to name a company that provided exceptional service. While many named a provider, few names popped up more than once. Below are those that did. It’s a REALLY fragmented marketplace.
  13. 13. © Borrell Inc., 2014. All rights reserved 12 SMBs Are Getting Help, But A Lot Are Still DDIYs* Source: Borrell SMB Survey, Aug.-Sept. 2014 * Digital Do-It-Yourselfers High likelihood for growth.
  14. 14. 10/9/2014 © Borrell Inc., 2014. All rights reserved 13 Brace Yourself It’s About to Get Scary
  15. 15. 10/9/2014 © Borrell Inc., 2014. All rights reserved 14 When We Asked SMBs To Tell Us What They Thought, The Floodgates Opened
  16. 16. 10/9/2014 © Borrell Inc., 2014. All rights reserved 15 Sales Reps Are Bugging Them “(I am) overwhelmed by salespeople creating confusion. Everyone has the magic solution.”
  17. 17. © Borrell Inc., 2014. All rights reserved 16 Source: Borrell SMB Survey, Aug.-Sept. 2014 1 Pitch Per Day; Some Say Dozens
  18. 18. 10/9/2014 © Borrell Inc., 2014. All rights reserved 17 “Have found that I need less and less advertising. Our business is built on word- of-mouth referrals from past clients and customers.” Classic ‘Ads’ Are Less Attractive Source: Comment from Borrell SMB Survey, Aug.-Sept. 2014
  19. 19. 10/9/2014 © Borrell Inc., 2014. All rights reserved 18 “My biggest challenges are keeping abreast of all the new trends in social media and the best ways to reach my customer, and finding the time to manage it all.” Change is Confusing Them Source: Comment from Borrell SMB Survey, Aug.-Sept. 2014
  20. 20. 10/9/2014 © Borrell Inc., 2014. All rights reserved 19 “ROI seems to be minimal at best. Very few clients have contacted me because of any kind of advertising or marketing; it seems to be mostly word-of-mouth. “ And They’re Skeptical of ROI Source: Comment from Borrell SMB Survey, Aug.-Sept. 2014
  21. 21. © Borrell Inc., 2014. All rights reserved 20 Which Is Why . . . Source: Borrell SMB Survey, Aug.-Sept. 2014 They’re putting so much effort here. QUESTION: Which of the following best provides you with new customers?
  22. 22. © Borrell Inc., 2014. All rights reserved 21 And Here’s How They Gauge All That Digital Success Source: Borrell SMB Survey, Aug.-Sept. 2014 QUESTION: How do you measure the success of your social media programs?
  23. 23. 10/9/2014 © Borrell Inc., 2014. All rights reserved 22
  24. 24. Let’s Summarize  The Deer Have the Guns  They’re Pestered by Reps  They’re Confused by Choices  Not All Are Buying  Success = Referrals, Likes
  25. 25. Thus, A Good Strategy . . .  The Deer Have the Guns  They’re Pestered by Reps  They’re Confused  Not All Are Buying  Success = Referrals, Likes  Teach Them to Shoot  Win Their Trust  Educate Them  Target Accurately  Drive Those Results
  26. 26.  Show them misfires  Do consultative sales  Hold local seminars  Use Borrell Data!*  Offer measurements And The Tactics . . .  Teach Them to Shoot  Win Their Trust  Educate Them  Target Accurately  Drive Those Results * This is not a sales pitch. It is sage advice. Check out www.adspending.com.
  27. 27. 26 We Weren’t Kidding About the Data © 2014 Borrell. All rights reserved We have Digital Marketing Services spending reports for any U.S. Market.
  28. 28. 10/9/2014 © Borrell Inc., 2014 All rights reserved 27 We Hope You Found This Useful! Questions? info@borrellassociates.com 1-757-221-6641 Or Tweet to us @borrellassoc

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