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March 10, 2011

Borrell Associates has just released a report entitled "Small Business's Become Everybody's Best Friend". The report summarizes feedback about media spending of about 2,000 small businesses. The growth in the coming year is expected to go mainly toward online. Radio came in fourth place behind online (1st) direct mail (2nd) and Newspapers (3rd). The report says "smaller businesses control 83 percent of all local advertising — but that’s only because there are so many of them, not because they’re big spenders. The average small business spent just $11,740 on advertising in 2010, about $2,300 of it online.

Gordon Borrell was the author of the report. We asked him to dig deeper into his findings.

Is it safe to say local/small businesses have learned the importance of the Internet in growing their business?
I wouldn’t say that in past tense.  They’re still learning.  The fact that they’re planning to increase online budgets 29% this year indicates that they’re at least convinced that there’s something ‘there’ with online advertising.  I believe it’s 50% experimentation, 50% actual results.  Like any other media buy.

How would you say a small business owner is going to react now if a salesperson (let's use radio as an example) comes through the door unprepared, with all the other salespeople calling on them?
We wrote a report last month urging sales reps to ‘come clean’ about website stats.  Unique visitors aren’t unique at all.  The first person who  walks in the door and educates the advertiser about the REAL story is going to make it much, much harder for the hypesters who don’t know  the difference between a clickthrough and a unique visitor.  So, yes, the fast-talking, high-pressure radio rep is going to be shut down pretty  quickly if she’s peddling online advertising and doesn’t know her stuff.
 
What was most revealing about your research?
"Small businesses are averaging 22 sales calls per month, and taking only 1 in 5 of them. That means it’s damned difficult to even get in the door these days.  Persistence is always the key to the door, that door is going to hit you in the ass pretty quickly if a sales rep talks about traffic and exposure but isn’t prepared to discuss return on investment.  The advertising world has suddenly gone from buying eyeballs to buying results."

And the number one surprise from your research?
"I’d say the biggest surprise is that 86% of SMBs already have a website, and that “my website” is the No. 1 thing they expect to spend money on this year.  Do you realize what that means?  The deer pretty much have the guns.  The Internet has given smaller businesses a direct channel  to consumers – or at least that’s what they think.  The smarter media companies will find a way to play to that belief and cultivate a relationship that drives traffic to the advertiser’s site through a myriad of things – not just through a banner ad on the radio station’s website. 

The need someone to help them drive traffic, not just buy one ad on one website.  That means help with email advertising, Facebook  campaigns, search engine optimization, radio commercials, deals programs, etc."

Read the entire summary HERE

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