When it comes to digital marketing, small and midsize businesses have high hopes. Not only do they hope to drive sales and increase brand awareness through their digital marketing efforts, but they also hope to reach new customers and drive customer engagement from digital marketing efforts as well.
Businesses also hoped to identify customer insights and achieve cost savings and productivity from marketing. Businesses also list obtaining sales leads and improving search engine ranking as other reasons for going digital.
"Large organizations are accustomed to digital marketing — they’ve been doing it for years," said Brendon O’Donovan, product marketing manager at Vocus, which conducted the research. "However, small and medium businesses during that time have continued with traditional marketing. During the past few years, the affordability and accessibility of digital marketing tools, coupled with the awareness of digital marketing in general, have opened up digital marketing to smaller businesses as a viable channel to find and engage with their customers." [Read related article: Digital Marketing a Top Priority for Small Business]
Despite those benefits, businesses are not solely focusing on digital efforts when marketing. Seventy-one percent of businesses have a marketing budget of less than $100,000 a year, while 12 percent of businesses say they spend between $100,000 and $499,999 on marketing a year. However, many of those businesses utilize a majority of other marketing tactics with those budgets. Twenty-two percent of businesses say that digital marketing represents less than 10 percent of their overall marketing budgets.
Eighty-seven percent of businesses say they have a company website and nearly 80 percent utilize social media. Businesses also utilize email in a big way in their marketing efforts, using it for email marketing, customer service and prospecting for customers. Lastly, more than half of businesses also say they have incorporated search engine optimization, videos and photos, and blogs into their marketing efforts.
Businesses are split on which tactics are most effective for their business. One-third of businesses say their website is the most effective digital marketing tool, while a quarter of businesses say social media is the most effective marketing tool. Twenty percent of businesses say email marketing is the most effective tactic.
Researchers expect more and more businesses to focus more on digital efforts in marketing in the coming years.
"There are a number of research reports out there that show digital marketing spend doubling in the next three to five years, which means businesses are paying attention to these trends," O’Donovan said. "I think these estimates, especially in the small- and medium-size business space, are conservative."
The research was based on the responses of 408 businesses, 196 of which had more than $1 million in annual revenue.