{the guide} The Small and Midsize Business Marketing Survey 2013
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1 {the guide} The Small and Midsize Business Marketing Survey 2013
2 Introduction remains a staple component in the marketing strategies of businesses and organizations of all shapes and sizes. Despite the emergence and hype surrounding numerous other digital marketing channels, such as paid search, SEO, and in recent years, social media, still commands a larger share of marketing spend than any of its contemporaries. The reason for this is clear. When used properly (i.e., when it is relevant, timely, and engaging), offers a targeted, personal, and effective method of communicating with its audience. It is also extremely cost effective and highly transparent, with results easily tracked and analyzed. Despite numerous high-profile predictions of marketing s demise, particularly at the hands of social media sites like Facebook and Twitter, spend on continues to increase. This has forced many marketing commentators to reevaluate their projections. Many now argue that was in fact the first social (albeit closed) network. goes beyond basic social engagement and provides a trusted, secure, and formal environment where messages can be archived and chains of communication easily followed. This means it is a great place to conduct business. The emergence of social media has actually strengthened marketing s position as the technologies have entwined to create more powerful and strategic methods of engaging with customers. In October 2012, icontact ( marketing by Vocus) commissioned an independent survey on the health of marketing in the small and midsize business community. Six hundred and one marketing decision makers, from a range of organizations with annual revenues of between $1 million and $50 million, were surveyed on their attitude toward, understanding of, and commitment to marketing. This report details the findings of that survey. 2
3 Summary of Key Findings Command of budget. On average, businesses spend 15 percent of their marketing budget on marketing; 54 percent report spending percent, while about one-fifth spend more than 20 percent of their marketing budget on . Budget commands more than any other single marketing tactic. The next most popular tactics are events (14 percent on average) and person-to-person contact (averaging 13 percent). Social media and SEO each accounted for 8 percent of budget spend. s #1 purpose is to share. While has commanding share of the marketing budget, it s also used to share. 92 percent of businesses say they use to share information about new products or services; 90 percent said they use to share news about their organization. SMB list size. Businesses surveyed have an average of 3,489 subscribers; about one-quarter of businesses have fewer than 1,000 subscribers while about one-fifth have more than 10,000 subscribers on their marketing lists. at least once a week. 39 percent of businesses their entire list about once per week with 6 percent sending daily s. 58 percent report sending s to just part of their list about once per week, with 10 percent sending daily s to a partial list. common of major tactics listed, followed by trade shows and events, person-to-person contact, and direct mail. Still plenty of room for growth. 56 percent of businesses say they plan to increase their use of marketing in 2013; was second only to social media, which 60 percent of businesses said they plan to increase. SEO placed third with 41 percent. Marketing has confidence in percent of respondents said they were very confident in marketing, while 78 percent said they were somewhat confident. marketing ranked third, behind personal outreach and events and ahead of social media. marketing helps business. 91 percent of businesses said marketing was either helpful or very helpful to their organization. Most businesses cite the precision audience segmentation that offers and the ease with which customers and prospects can engage the brand. marketers love clicks. Clicks are the #1 metric marketers look to when measuring the success of their marketing campaigns, with 78 percent looking to increase website traffic. 74 percent gauged success by leads generated and 72 percent by actual sales. Integrating with other types of marketing. 64 percent of businesses coordinate marketing with social media marketing the most 3
4 Commands Marketing Budget Marketing s Share of the Marketing Budget media. 1 According to this survey, social media ranks fifth in overall share of marketing budgets, and marketing investments are nearly double. Budgets Set to Grow 0% 12% Less than 10% 14% 10%-20% 54% More than 20% 19% marketing is important in fact, 83 percent of businesses say is either important or critically important to their overall marketing strategy. The ability to segment audiences and reach prospective or existing customers with content designed precisely for their preferences was often cited as a reason why is so important but nothing demonstrates commitment like a budget. It s telling that respondents said, on average, that marketing commands 15 percent of their overall marketing budget. This represents the single largest marketing expenditure. In fact, 54 percent of business said they spend percent of their budget on marketing, and nearly one-fifth (19 percent) spend 20 percent or more. Fifty-six percent of businesses reported plans to increase spending on marketing in the next year, while 41 percent said they d keep spending about the same. Social media is the only marketing area that may see a larger investment 60 percent of businesses said they d increase spending on social media. Of the 11 different areas, only social media and marketing had a majority, or greater than 50 percent of respondents, indicating that investments would grow. Several other categories trailed behind social media and marketing, including SEO (41 percent), person-to-person outreach (40 percent), and online display ads (38 percent). How much should you spend on marketing? There is no one-size-fits-all answer to this question. It will depend on a number of factors, including current list size, potential list size, depth of segmentation, your business model, etc. For example, a large business targeting a relatively niche market with a single (or limited range of) high-value product(s) may spend less than a small business targeting a large community with a range of inexpensive products. Business spending on marketing topped investments in events and trade shows, search engine optimization (SEO), social media, and a range of paid media across print, broadcast, and digital media. To place this in context, previous studies revealed that businesses spend a median of $845 per month, or more than $10,000 per year, on software tools for social Because marketing is often priced in terms of list size and/or number of sends, your budget should be calculated on the number of meaningful, targeted communications you can send your list and 1 Path to Influence: An Industry Study of SMBs and Social Media 4
5 the Return on Investment (ROI) or impact you hope to achieve via your marketing campaigns. This might mean you send a number of highly relevant s on a daily basis to various segments of your list, or you send just one newsletter-type communication to your entire list whenever you have something to share. The path you follow will help determine the budget you need to set aside for marketing. The first step in planning your marketing budget is to ensure that you build and deliver only relevant, timely, and engaging s. This will result in higher open, clickthrough, and conversion rates, allowing you to analyze your ROI and optimize future campaigns and strategies. While offers a seemingly low-cost marketing solution to many businesses, the fact is that marketing is neither expensive nor cheap. There is only marketing that works and marketing that doesn t work. If you are sending untargeted, irrelevant, and untimely communications, and you are not tracking results and optimizing accordingly, then the amount you are spending is less important than your campaign s ineffectiveness. Average Share of Marketing Budget marketing 15% Events/Tradeshows 14% Person-to-person contact 13% How Businesses Use in Marketing Sharing information about new products or services was the most common use of marketing (92 percent); sharing news about the organization ranked second (90 percent); and advertising special events ranked third (87 percent). These are fairly obvious marketing activities, and previous studies on the use of social media shared similar rankings for the top uses of the medium. However, where breaks with social media is in engaging customers in a formal, business-friendly environment and soliciting feedback. Has Pull Conventional wisdom might think of as primarily a push medium, but the data shows that has considerable pull. 84 percent of businesses said they used to engage and solicit feedback from customers. Whereas businesses tend to be wary of soliciting this feedback in the public domain of social media, provides a way to connect privately. , of course, is not immune to public disclosure it s easy to forward an or post it online but does seem to provide a sense of personalization that puts businesses more at ease in engaging and asking for customer commentary. Print ads Direct mail Social media 8% 11% 10% Responding to News as a Public Relations Tool Search Engine Optimization 8% Online display ads 7% While just 59 percent of businesses said they use Television advertising 5% to respond to news about their organizations the low- Radio advertising 4% est scoring of all the possible uses listed analysis by Display ads like billboards and signs 3% company size demonstrated some statistically significant Other 5% variations. Larger organizations, those with $30 million or more in revenue, were more likely to use to respond to news (70 percent). Larger organizations are perhaps more likely to generate news, and this demonstrates 5
6 how the uses of marketing channels like marketing expand and grow, even as the organization grows. Subscribers A Matter of Size List Size The Cost of List Growth There are very few financial barriers to list growth. Only 11 percent of those surveyed said that the cost of acquiring new subscribers is too expensive. 47 percent believe the costs are reasonable, and 21 percent stated that they would be happy to pay more for new subscribers. Frequency and Segmentation Not sure; 17% 1,000 or fewer; 24% Frequency of s to List More than 10,000; 21% 3,501 to 10,000; 19% 1,001 to 3,500; 19% Median: 3,489 Entire List Daily Daily A few times a week A few times a week Once week Once a week A few times a month 6% 6% 16% 39% 16% 17% 39% 17% 23% A few times a month Once a month or less 23% 34% Most businesses have lists of 10,000 or fewer subscribers, although 21 percent report having more than 10,000. The median list size in this segment is about 3,500 subscribers. 19 percent of businesses report having between 1,001 and 3,500 subscribers, while another 19 percent report having between 3,501 and 10,000 subscribers. Part of List Once a month or less Never Never Daily Daily A few times a week A few times a week Once week Once a week A few times a month A few times a month Once a month or less Once a month or less Never Never 2% 2% 10% 10% 24% 24% 14% 14% 22% 22% 21% 21% 8% 8% 34% 48% 48% Modest Goals for Growth Goals for growing list size were relatively modest. On average, businesses are aiming to grow their list size by 28 percent. 58 percent of respondents said they d like to grow the number of subscribers on their list between 1 percent and 25 percent in the next year. Another 15 percent said they d like to see their lists grow between 26 percent and 50 percent over the same period. Most businesses surveyed their entire lists monthly and send segmented s at least weekly. 34 percent of businesses send to their entire lists at least once per month, while another 23 percent their entire lists a few times per month. A surprising 39 percent of businesses their entire lists once a week or more, with 6 percent saying they their entire list every single day. Among businesses that segment marketing lists, 58 percent of respondents said they part of their 6
7 lists once or more per week, with 10 percent reporting that they part of their lists daily. The majority, 24 percent, indicated that they part of their lists a few times a week. Integrating with Other Marketing Functions Businesses are more likely to integrate and social media activities than any other marketing means. 64 percent of respondents said they coordinate activities with social media marketing. It may seem plausible to conclude that this is because both media are digital; however, the next three most frequently integrated activities are physical: events, personal contact, and direct mail. 50 percent of respondents said they coordinate marketing efforts in conjunction with events, such as trade shows. Another 48 percent said they use after personal contact, perhaps meetings or briefings, and 48 percent also said they coordinate marketing with direct mail. Coordination with SEO, print ads, and online display ads all followed. Marketing Management Business marketers have a high degree of confidence in marketing. In fact, confidence in marketing was higher than any other marketing tactic, except for direct, interpersonal communication (80 percent). 78 percent of respondents were either Extremely Confident or Very Confident in their marketing efforts. Marketing tactics that followed include events and trade shows (72 percent), direct mail (65 percent), and social media (60 percent). Dedicated teams 54 percent of businesses have some sort of resource dedicated to creating content 34 percent report having a team dedicated to marketing, and 20 percent have assigned the responsibility to just one person. 34 percent of businesses assign content generation to the marketing department as a whole this is likely a small team of people responsible for a range of marketing activities. Just 9 percent of businesses report outsourcing marketing content development to an agency. Uses of Marketing Confidence with Marketing Types To share news about new products and services 92% Extremely Confident Very Confident To share news about your organization 90% Person-to-person contact 41% 80% To advertise special events 87% Events/Tradeshows 35% 72% To engage your customers and solicit feedback or information from them 84% marketing Social media 32% 27% 60% 78% To send a regular e-newsletter 83% Print ads 25% 60% To promoted content on your organization s website, blog, etc. 83% Direct mail 22% 65% To advertise sales or promotions 72% Online display ads 20% 58% To solicit donations from subscribers 71% SEO Television advertising 20% 17% 38% 55% To respond to news stories about your organization 59% Display ads 14% 38% Radio advertising 13% 37% 7
8 Conclusion marketing offers small and midsize businesses the opportunity to target their customers with engaging offers and promotions, as well as relevant company news and information. marketing is cost effective and easy-to-use, and complements other marketing strategies perfectly.small and midsize business owners and marketers are comfortable with marketing technology and the strategies that make it successful, and are looking to increase their activity via the medium in the coming years. About icontact Since 2003, icontact has helped small and midsize businesses share their stories, ideas, and products through and social marketing. We take what we know about our favorite small and midsize businesses a trendy boutique hotel in South Beach, the online poster store that helps us decorate our cubicles, even the local coffee shop you ll find us at on Saturday and we build the online marketing features we know those businesses need to succeed. We then pair our tools with award-winning support and expertise, so our customers never have to go it alone. And we top it all off with great personality, energy, and a commitment to creating a positive wake in our community. icontact is a service of Vocus. For more information, visit us online at Connect with us: 8
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