SMBs Ready To Restart 2021 Ad Budgets, Study Shows

Marketers are increasingly focused on local ad campaigns amidst growing concerns over heightened competition as stores and entertainment venues have shut down based on COVID-19 government restrictions.

Data released Wednesday shows that marketers of small and medium-sized businesses (SMBs) are responding with a buy “local” message, buying more advertising, increasing social media activity, and broadening their mix.

Local, traditional media may see significant benefits.

Several marketers participating in the survey said they would "return" to advertising with a "shop local" sort of message, according to Gordon Borrell, CEO at research firm Borrell Associates.

Borrell’s latest poll asked marketers about advertising and marketing plans for 2021 to learn more about how things shaped up between January and March, and how budgets look for the remainder of the year.

About 214 marketers responded to this monthly panel. Nearly half said things were better in Q1 2021 compared with Q1 2020. Still, the data shows that, by the time Q1 2021 concludes on April 20:

  • 26% will have used an advertising agency
  • 15% will have canceled an ad buy
  • 32% signed a Q2 advertising contract
  • 47% ran ads or commercials with a local media

Some 60% said they have maintained their spending or increased it compared with last year.

Their perception is that competitors are doing the same things. About 19% believe competitors are decreasing their ad presence, while 25% believe they are increasing their presence, and 37% have not seen a change.

As the second quarter begins, competition is a concern -- especially in terms of local competitors. Local SMBs plan to combat competition by ramping up their social media, ad spend, and adding different media to the mix.

The data shows a mixed consensus on how to approach marketing in Q2. Some panelists will use diversity strategies, while others believe they need to completely revamp their business and others will maintain the status quo.

More than half said they won’t necessarily follow their ad budget. If a good deal comes along, budgets can change.

One third say they will spend more this year than they did in 2019, but rather than spending more on one type of media, they will spend more on a variety of media. Why will they spend more?

  • 70% will add more types of media
  • 58% plan to increase the frequency of the message
  • 34% will shift to marketing methods that cost more
  • 13% say the rates they pay have increased.

When asked how their company will react to increased ad competition, 60% said they plan to increase their social media presence, while 40% will increase advertising and marketing spend, 36% will add new types of media to their organic and paid strategies, 32% will run special promotions, 34% will create new partnership programs, and 23% will hold virtual and in-person events.

Other strategies include reducing costs, hiring more staff, discounting products and services, reaching out to marketing experts and agencies, matching competitors’ spending, and providing more employee benefits.

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