New research from Amazon Ads has revealed that Australian SMEs are benefitting from advertising as they look to expand their businesses at home and internationally.
The study found that 88 per cent of SMEs said that their current advertising strategy is successful in acquiring new customers. 71 per cent said it had helped them to expand their Australian business, while 54 per cent said that advertising had helped them internationally within the last 12 months.
This confidence in advertising pushed 33 per cent of SMEs to increase their ad spending during the past year, while 39 per cent kept their budget the same year-on-year.
The most common motivations for this increase in spend include driving awareness of a new product or service (47 per cent) or to improve customer awareness of their brand (45 per cent). The most popular channels for SME spend in advertising include social media advertising (70 per cent), followed by online search (63 per cent) and online display (44 per cent). Looking ahead, nearly a quarter (24 per cent) of those sampled said they planned to spend on streaming TV advertising during the next 12 months.
Some SMEs eschewing advertising
Overall, 68 per cent have said they currently spend on advertising, while 32 per cent that do not spend on advertising at all.
Despite the success enjoyed by some, not all SMEs feel they need advertising to grow their business. 32 per cent of Australian SMEs 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 (44 per cent) while a similar number (38 per cent) said they haven’t seen a return on previous investments.
Many SMEs also find advertising a challenge. 32 per cent said that their biggest advertising-related challenge was lack of budget, while 29 per cent citied a lack of time and resources. Meanwhile, 28 per cent said that knowing where to focus their advertising budget was the greatest challenge their business faced when it came to advertising successfully.
“We see many small and medium businesses 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,” said Kasey Jamison, Head of Endemic Advertising, Amazon Ads, Australia and New Zealand (pictured above).
The research also noted a clear belief among Australian SMEs in the power of technology to enhance the impact of advertising. In particular, 46 per cent said they believe AI will improve the performance of their advertising campaigns. Because of this, 19 per cent are currently training their teams on how to use AI technology for advertising purposes.
