SMB Advertising Spend – Motivations / Popular Channels / Challenges

Category: Data & Insights
SMB Advertising Spend - Motivations / Popular Channels / Challenges

New research from Amazon Ads shows UK SMBs are benefitting from the positive impact of advertising spend as they look to expand both at home and internationally.

The report shows that after a period of economic uncertainty, SMBs are optimistic about the future and the potential for advertising to help them on their growth journey. With SMBs making up 99.9% of all UK private sector businesses and accounting for £2.4 trillion (53%) of the country’s annual turnover, their success is crucial for the UK economy. 

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 advertising spend during the past year, while 35% kept their budget the same year-on-year.

Most common motivations to increase Advertising Spend

  • Drive awareness of a new product or service (48%)
  • Improve customer awareness of their brand (51%).

Most popular channels for SMB Advertising Spend

  • Social media advertising (65%),
  • Online search (58%)
  • 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 have no advertising spend at all.

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%)
  • Haven’t seen a return on previous investments (ROI) (28%)

SMB Advertising challenges

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
  • Unsure how to measure the performance of campaigns (26%)
  • Creating compelling content was the greatest challenge their business faced when it came to advertising successfully (26%)

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. 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.

– Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads

Looking to the future

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. 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.

– Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads

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