Inside the Small Business “State of Mind”: What it Means for Local Advertising
As we turn the calendar page over to 2023, small businesses are in a state of flux. Three years of economic tumult has put both businesses and consumers through a series of peaks and valleys. Now, fears of an impending economic recession have led to a mildly disappointing holiday shopping season—and some worry that those lukewarm sales numbers are a harbinger of greater difficulties to come.
This uncertain future is putting small businesses in a tough spot. Some business leaders are eager to cut costs, reduce overhead and hope that a more careful business model will be better equipped to weather the economic storm. Other businesses are looking for ways they might get ahead of this disruptive business climate by investing into revenue stream development and other growth strategies.
When facing uncertainty, it can help to know what other local businesses are thinking. This collective knowledge can be a valuable resource in helping you adapt and enhance your advertising and marketing strategy with methods you might not have been considering. Borrell Associates’ annual Local Advertiser Study and SMB Panel offers excellent, in-depth insights that can help local businesses plan for the future, which is why we hosted an exclusive webinar with Borrell EVP Corey Elliott earlier this month.
Read on for some of the highlights—or watch the full webinar for expert insights to help you elevate your advertising in 2023.
In recent months, news stories of mass layoffs at major businesses have become a common occurrence. These workforce reductions, combined with inflation and general economic unease, would seem to suggest that the near future is going to be tough on businesses—and local businesses in particular.
But the latest data tells a different story. Yes, some large businesses are suffering from revenue declines, or are revising their own growth forecasts in anticipation of upcoming economic hardships. The small business landscape, though, seems to be in a different situation: While the number of large businesses in operation in the U.S. has declined slightly in 2022, more than 14 million new small businesses have been established since 2019, suggesting that post-pandemic economic chaos hasn’t dissuaded local businesses from opening up shop.
Meanwhile, overall applications to register small businesses in the U.S. have been higher in 2021 and 2022 than during the pre-pandemic years. And, while overall small business confidence in the economy is lower now than it was at the end of 2021, those sentiments have actually improved since May—meaning small businesses are trending toward more optimism about their own prospects in 2023 and beyond.
When companies need to cut costs, marketing and advertising have historically been among the first line expenses to get placed on the chopping block.
But today’s small businesses are moving in the opposite direction. They realize advertising and marketing can help them generate visibility and revenue, so they’re increasing their investment into these channels almost universally. From social media to events promotion to display and other ad channels, small businesses are increasing their investment in digital, cost-effective and scalable channels while scaling back their investments in more traditional mediums, such as print ads.
If your small business is still working to finalize its marketing and advertising spending budgets, these trends are important to follow. Cutting back now will create an opportunity for your competition to increase their visibility and local market share. While you might save in the short term, your business could suffer customer churn and revenue decline that undercuts your company’s growth for months, if not years.
As companies set their 2023 operating budgets, digital video advertising and digital content marketing have proven very resilient, in terms of small business investment.
According to a survey by Borrell Associates, only two percent of businesses planned on reducing their spending on digital video and content marketing—one of the lowest figures of any marketing or advertising category. But this small two percent decline was easily eclipsed by the number of companies planning to increase their investments: 11 percent of businesses said they would spend more on digital video in 2023, while eight percent said they planned to increase their content marketing spending.
Other digital channels saw even more aggressive investment. Social media ads, for example, are expected to see increased spending by 28 percent of small businesses, while only six percent of businesses plan to spend less. This comprehensive view of small business ad spending paints a clear picture: today’s small business leaders know that if they want to survive and thrive, advertising and marketing is their key to navigating economic uncertainty.
A digital ad strategy can be the solution your local business needs to support your business model and drive continued growth in any economic climate. But the potential of this strategy can only be achieved when it has been built and optimized for continued success.
That’s why small businesses benefit when they enlist the help of a local media partner to develop and execute campaigns that drive a strong ROI. According to Borrell, local businesses want to work with local media partners that offer the following attributes:
- A high level of marketing expertise. There’s no substitute for experience—especially when it comes to choosing a media partner.
- True partnership, rather than a vendor mindset. A good local media partner is aligned with your business goals, and will help you develop campaigns and strategies in support of those goals.
- Delivery of a transparent marketing plan. From goal alignment to performance and reporting, a good media partner will keep you in the loop every step of the way.
- A client-centric mindset. Is your media partner concerned about its own bottomline, or does it measure success by how well your business is served?
If you’re looking for a local media partner to improve your 2023 marketing and advertising strategy, Cox Media fits the description of a local media partner you can trust. We have the in-house expertise and innovative tools to push your performance to the next level, and we work closely with each client to make sure every campaign is set up to support your unique advertising goals.
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