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

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. 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. 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. © 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. 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. © Borrell Inc., 2014. All rights reserved 5
What’s Included in Each
Source: Borrell 2014
$ in Billions
Biggest spending
category.
Most-pitched
service.

7. 10/9/2014
© 2014 Borrell. All rights reserved 6
Is Main Street Really Spending
That Much in Digital Services?

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. © 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. 10/9/2014
© 2014 Borrell. All rights reserved 9
So, local providers dominate
the DMS scene, right?
$3 out of $5 are captured by national providers

11. © 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. © 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. © 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. 10/9/2014
© Borrell Inc., 2014. All rights reserved 13
Brace Yourself
It’s About to Get Scary

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. 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. © Borrell Inc., 2014. All rights reserved 16
Source: Borrell SMB Survey, Aug.-Sept. 2014
1 Pitch Per Day; Some Say Dozens

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. 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. 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. © 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. © 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. 10/9/2014
© Borrell Inc., 2014. All rights reserved 22

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. 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.  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. 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. 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