While half of the small and mid-sized businesses (SMBs) surveyed still feel the business climate is poor, that’s a big improvement since March when only 12% felt economic conditions wouldn’t change in the next six months.
In August, the number jumped to 46%, as twice as many expressed optimism that things would improve, compared with four-year averages.
Gordon Borrell, CEO at Borrell Associates, believes SMBs are adapting. “A remarkable amount now tell us they've benefited from COVID-19's impact, and many are hitting re-start on ad
budgets,” he wrote in an email to inside Performance.
There’s a positive side — a three-fold increase in the number who said the pandemic has helped their business. Sixteen percent now feel this way, with 6% claiming a “large positive impact.”
The feeling of doom continues to wane. About 56% of the SMBs participating in the survey said their businesses in March and April felt large negative impacts, compared with just 34% in August.
Optimism continues to help ad budgets restart in some media and from larger companies. I’m hearing this mostly from agencies such as Merkle, which works mostly with larger companies. At larger companies, the sentiment points to higher spending on Search and Facebook.
Understandably, some are more pessimistic than others. Some SMBs cannot see an end to the disruption from the pandemic. They say the end is no longer near.
When asked how long they anticipate the impact to their business will last, in March the average response put the recovery at November 2020. In April, the average recovery date was pushed back to December, and now they believe the "end" date for the impact will be June 2021.
Borrell data shows that compared with March, half as many SMBs now plan to spend less in the coming months, with a slight increase in the percentage that are planning to spend more. Some 52% plan to hold steady.
Costs and new ways to advertise are top-of-mind because the strategies that worked before the pandemic no longer work. SMBs are working with tighter and more inconsistent budgets and are looking to figure out new methods of advertising.
When asked to describe what’s on their mind, 19% or SMBs said they would cut budgets or costs, 17% are looking for new methods to advertise, and 10% don’t feel a need to advertise at all.
Notably, 3% said they are moving past COVID-19 messaging, 3% are avoiding negativity, and 3% still expected a COVID fallout.
Some 5% see a change in consumer behavior, while 5% expect some sort of election impact, and 5% are not sure what to think related to advertising and marketing.