In a slowdown, marketing is often perceived as a questionable cost rather than a longer term investment. This is even more obvious among small businesses which have to cope with greater exposure to risks.
This summer, Microsoft Advertising ran a research across 1000 small and medium search advertisers in France and the UK. The ambition was to evaluate the influence of the current recession on marketing spend and the weight of digital in the marketing mix.
Online Grows its Share in the Recession.
Small businesses who have already adopted digital advertising tend to focus their investment online. Only 38% of 994 respondents use both online and offline advertising, while 12% only use paid search. On average, respondents use 3 different media for advertising.
Unsurprisingly, company size has an impact on media used, with smaller enterprises using fewer channels for advertising than larger firms.
The strong penetration of search marketing across the board is understandable: affordable, trackable, scalable, reactive - this advertising technique does not require complementary production investments like radio or press may do.
But would these positive attributes outweigh the external pressure on the business bottom line?
To put this question into perspective, the IAB/eMarketer figures suggest that UK advertising spend will increase by only 1% in 2009 over 2008, and by 17% on internet advertising. The IPA's Bellwether report indicates that 45% of companies in the UK are reducing their ad spend in 2009 over 2008.
So we asked these brands how their advertising spend would evolve in 2009 compared to the previous year.
European SMBs are Optimistic and Invest More
The first take-away was to see some optimism amongst these search advertisers. 75% of them intended to spend at least as much this year as last year, and 42% were even considering ramping up their overall advertising spend. A phenomenon that is exacerbated in search marketing where the net increase spend peaks at 29% year-on-year.
The projected progression of search marketing is triggered by the optimistic advertisers that increase their overall budget, but also by the more pessimistic. As a matter of fact, more than a third of the advertisers reducing their ad spend in 2009 will not reduce or will even increase the share of search. One fourth of those planning to spend the same amount in advertising will increase the share of search in their mix.
It seems that SMBs have found in search the marketing holy grail. This performance-based media buy is a critical lead generator that matches ideally the intrinsic nature of small businesses. It enables highly-relevant tail players to outperform deeper-pocketed, though more generalist, brands by getting in touch with a qualified audience in a cost-efficient manner.
Time to Jump on the Bandwagon?
If you are not doing any search marketing yet or if you want to learn more about how the unique targeting capabilities of Microsoft adCenter can help your business grow, visit us at the Business Start Up Show in London on November 26th and 27th. Our team will provide information on Bing and highlight how Microsoft new search experience generates great Return On Investment (ROI) when combined to the most recent adCenter functionalities.
By clicking on the following banner you will be offered free tickets to the show. Search is said affordable, now it gives you even free stuff:)
