Nearly a third (65%) of UK SMEs have an annual marketing budget of less than £5,000, with many small businesses failing to set a budget at all, according to a new poll.
Touch Local carried out a poll amongst a sample of UK small business owners, to find out if they had set a marketing budget for 2011, and what forms of marketing do they consider to be the most effective.
More than a third (38%) of business owners who took the survey, confirmed that they have a marketing budget for 2011. Many of them also specified that the budget was limited, due to the fact that they do not have any excess in their capital to dedicate to marketing.
Most of the respondents (62%) stated that they did not have a set marketing budget for 2011.
More information acquired from business owner who have a set marketing budget:
In the current “challenging” economic climate, it’s not surprising that 65% of UK SMEs have an annual marketing budget of less than £5,000. Only 2% of the respondent stated that they are planning to spend more than £100,000 on marketing activities in 2011.
Overall, it seems that there is a definite shift towards online advertising:
o 80% of business owners felt that investing in a website had a high priority when allocating their marketing budget
o One in 3 of the respondents placed high importance on advertising in online business directories, versus only 1 in 10 for print directories. What’s more, 60% of small business owners stated that they were not planning to spend any of their marketing budget on print directory advertising
o Nearly half of the survey respondents are placing high priority on search engine marketing and 1 in 3 on email marketing
o When it comes to advertising in newspapers and through leaflets, 23% consider it to be a high priority and 16% are not planning to spend any marketing budget on these in 2011
o Other type of advertising, such as video, direct mail and telemarketing have predominantly low to medium priority
More information acquired from business owner who do not have a set marketing budget:
Even though 62% of SMEs have no marketing budget for 2011 most of them could end up squeezing their budgets for marketing or advertising.
However there is major shift in the approach of advertising with majority of the respondents willing to invest in their company website (61%), followed by SEO (27%), email (23%).
When it comes to advertising on business directories, 18% of businesses would invest in online business directories compared to only 10% in print directories which is more or less as expected.
Interestingly, 53% of the respondents will not advertise using Video, reasons being the high production and distribution costs.
Only 1 in 8 of respondents would advertise through Social Media, citing lack of time and resource as a reason.
Other types of advertising like direct mail pay per call services and telemarketing was low in priority.
The study showed that SMEs throughout UK are investing in a more modern channel rather than the traditional method of marketing.
They acknowledge that the difficulty to quantify the effectiveness has forced them to the shift away from the more traditional forms of marketing towards web based marketing mediums as it is seen to attain better returns.
Some of the comments from the respondents:
• I’m a sole trader and I keep my overheads down to the absolute minimum. Word of mouth has also worked very well for me.
• I have in 40 plus years of running my business & always spent around 3% to 4% of turnover on advertising.
• I would spend more on good leads that generate profitable business.
• The ‘marketing industry’ has become so large, complex and full of spam that it is now impossible to quantify effects of many of these so-called marketing campaigns.
• SEO has now been made a dominant factor in website success that many of us use our websites to direct our existing customers rather than seek out new ones.
• Over the past 5 years of trading we know where we get the better results from our efforts and pursue those. Regular monitoring of incoming trade means we adjust our budgets accordingly.
• From experience printed advertising is a dying medium. Our best returns have come from promoting our own website and SEO work.
• Due to the current climate, we do not have any excess capital to spend on advertising of any kind.
• Making marketing a priority and putting it on our wish list does not necessarily mean that funding will become available whilst high street sales are still struggling.
• Due to very poor levels of business we don’t have much money to spare for this at the moment. The recession is still hitting us hard.
• Paper advertising hardly works for me anymore, and is too expensive, our website is key.
• Over the years I have found most advertising to be a waste of money. I have tried everything from cards in supermarkets, directories, charity posters, but none even cover the cost of the advertising. Website and word of mouth are the only functional methods for my business.
• I find the cost of advertising very high in most publications with little or no reward. I would welcome information on how to use email marketing.
• Networking is another valuable marketing avenue. I am a member of a national networking group and I’m hoping this will be useful in 2011.
Source: www.touchlocal.com/