Small Business Advertising Report

The UK's four million SMEs (small and medium-sized enterprises, with less than 250 employees) account for half its jobs and half its GDP. However, they take a DIY approach to their advertising, according to agency B2B International which has recently published a White Paper on SME advertising practices and launched an SME panel.

The report says advertising spend for the SME sector is typically 2% or less of turnover. Two thirds of SMEs manage their advertising and promotions internally. 99% of these companies actually employ less than 50 people and B2B says they are 'attempting to market their products and services professionally and yet cannot afford professional help'.

The paper reveals that in the last two years a corporate web site - cheaper than a company brochure and easier to keep up-to-date - has become the most popular and most important promotional vehicle for SMEs, used by around 90% of companies. PR and direct mail are next, each used by about 60% of SMEs. Trade press advertising is seen as expensive and is used by only 53% of companies, with only 1 in 20 respondents classing it as their most important promotional medium. Exhibitions have also declined in importance but they remain significant for companies whose products require a physical demonstration or where sight of the product helps sales.

Company founder and report co-author Paul Hague says that below the line advertising has a real place in SMEs' advertising strategy but warns of a 'potential lack of creative brilliance from the proprietor, an inability to hit the hot buttons with the target audience'.

In terms of gauging the return on advertising investment, results are perhaps surprising. Half the smallest SMEs (those that spend less than £10,000 per year on advertising) claim to make some attempt to measure the effectiveness of their spend, compared to only one in ten larger SMEs.

The report estimates that the shopping basket of SMEs adds up to over £1 billion of products and services per annum and outlines the benefits for suppliers of tapping into this market - including premium prices, good margins and loyal customers. Where bosses are covering multiple functions and companies operate as simple decision-making units, relationships can be established which will last a long time.

The White Paper is available via B2B's web site at www.b2binternational.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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