New research from Amazon Ads shows UK SMBs are benefitting from the positive impact of advertising as they look to expand both at home and internationally. The study found that nearly nine in 10 (86%) said that their current advertising strategy is successful in acquiring new customers while more than three quarters (76%) said it had helped them to expand their UK business. More than half (54%) said that advertising had helped them grow their business internationally within the last 12 months.
This confidence in advertising led more than two in five (44%) UK SMBs to increase their spend on advertising during the past year, while 35% kept their budget the same year-on-year. The most common motivations for this increase in spend include to drive awareness of a new product or service (48%) or to improve customer awareness of their brand (51%). The most popular channels for SMB spend in advertising include social media advertising (65%), followed by online search (58%) and online display (40%). Looking ahead, more than a quarter (28%) of those sampled said they planned to spend on streaming TV advertising during the next 12 months.
Of the 300 SMBs sampled, almost three quarters (71%) of those sampled said they currently spend on advertising, compared to 29% that do not spend advertising at all.
Despite the success enjoyed by some, not all SMBs feel they need advertising to grow their business. 29% of UK SMBs do not currently spend on any kind of advertising. When asked why they are not currently advertising, the most common response was that it is too expensive (42%) while a similar number (38%) said they haven’t seen a return on previous investments (ROI).
Even among SMBs that are currently spending on advertising, challenges remain. Three in 10 (30%) said that their biggest challenge with advertising is knowing where to focus their advertising budgets to achieve their goals, while more than a quarter (26%) said they were unsure how to measure the performance of campaigns. The same number (26%) said creating compelling content was the greatest challenge their business faced when it came to advertising successfully.
“We see many SMBs testing the impact of advertising as part of their overall growth strategy and deciding if advertising provides the right return on investment to help them meet their business goals,” said Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads. “Our aim is to make advertising as simple as possible for any SMB by removing the barriers, through a low cost of entry, closed-loop measurement and the ability to surface their products to customers at scale.”
There is a clear belief in the power of technology to enhance the impact of advertising among UK SMBs and to help them solve existing problems, as just under half (45%) of UK-based SMBs said they believe AI will improve the performance of their advertising campaigns. As a result, almost one in five (18%) of those sampled are currently training their teams on how to use AI technology for advertising purposes.
“AI and machine learning have created a range of new possibilities for advertisers and SMBs are already seizing this opportunity,” added Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads. “These technologies are democratizing the ability to advertise at scale and enabling small businesses to create compelling content that reaches relevant audiences in the right place and time.”
