How Does Company Size Affect Internet Marketing Activity?

How Does Company Size Affect Internet Marketing Activity?
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In January we published the results of the BrightLocal SMB Internet Marketing Survey 2014. With the results of the survey we wanted to gain a better understanding of the attitudes & usage of internet & mobile marketing by small & medium sized businesses (SMBs).

With this follow-up, we want to take a closer look at the data & compare responses based on the size of the SMBs that took part. We know that 736 SMBs took part in the survey, and by now looking at the different responses based on how many employees a company has, we can gain a better understanding of how SMBs of different sizes, feel about & use internet marketing.

For insights about the responses from SMBs in different Industries, please see this post.

About the SMB Internet Marketing Survey 2014

We conducted the survey in partnership with ChamberOfCommerce.com, and we’d like to thank them and all of the participating businesses for their time & assistance. The survey was conducted in October / November 2014. 736 SMBs completed the survey with 95% located in North America (Europe 4%, RoW 1%).

This survey has been split into two distinctive parts:

  1. Engagement & Opinion – this part explores the current usage of internet marketing by small & medium sized businesses. We find out what works for them and their opinions on how this might change in the future.
  2. Marketing Support – this section explores how many SMBs use internet marketing consultants / agencies and how effective these working relationships are.

1. Engagement & Opinions

Company size vs Marketing budget

Company size vs Marketing budget

Key Findings:

  • There is a direct correlation between number of employees & monthly marketing budget
  • From original survey, 58% of respondents had between 0-3 employees & 16% had between 11-50 employees

Analysis:

NB – ‘marketing budget’ in this chart refers to all channels (online & offline).

The aim of the survey was to find out how small & medium businesses view internet marketing. The majority of respondents had just 0-3 employees (58%), and we found that 70% of SMBs were spending less than $500 on marketing per month.

Now, in the above chart we can see a distinct correlation between the size of a business (employee numbers) & the monthly marketing spend. This ‘trend’ is of course to be expected, but for SEOs it does serve as a useful guide when pitching to SMBs.


Company size vs Planned Spend for 2015

Company size vs Planned Spend

Key Findings:

  • 59% of SMBs with 21+ employees say they do plan to increase spend v 36% of SMBs with 0-5 employees
  • 19% of sole proprietors say they will not increase their internet marketing spend in 2105

Analysis:

From the original survey we learned that 37% of respondents plan to increase their internet marketing spend over the next 12 months (vs 21% in 2014).

From further analysis we can see that larger organizations are more bullish about increasing their online spend, while smaller (which make up the majority of our respondents), are less assertive. Not only is there a higher sense of uncertainty in the group, but there are far more who confidently say they will not increase their online marketing spend.

The question is whether the increased uncertainty comes from external factors affecting their future planning, or whether they simply don’t feel that the ROI from internet marketing is adequate enough.


Company size vs Internet marketing Effectiveness

Company size vs Internet marketing Effectiveness

Key Findings:

  • 94% of SMBs with 50+ employees say internet marketing as ‘effective’ or ‘very effective’
  • 30% of sole proprietors rate internet marketing as ‘not effective’

Analysis:
We saw from chart 2 above that larger SMBs plane increase spend on internet marketing in the next 12 months, and a key reason for this is that they perceive online marketing to be more effective, and therefore less of a risk.

Sole proprietors (those with ‘0’ employees) are less convinced by the ROI of internet marketing. Of course, with one individual running a whole business it is going to be difficult to juggle all business responsibilities and implement/oversee an effective internet marketing campaign.

For Consultants/Agencies – targeting your services to larger scale SMEs means you’ll be pitching to more engaged & amenable segment of the market. So then, rather than trying to teach SMBs about the merits of local search, it becomes more about convincing them of your strengths & expertise as an SEO agency / consultant.


Company size vs Effective marketing channels

In the original survey findings, 28% said that word of mouth was the most effective channel at attracting new customers, whilst 20% said that it was SEO. If we break the same data down by size of business, we can see which particular SMBs value online vs. offline marketing. Note that to show factors which can be measurably affected, we have removed word of mouth as a channel.

Online vs Offline:

Effective marketing channels

NB – we have removed Word of Mouth from this data to give a clearer Online vs. Offline comparison

Key Findings:

  • SMBs of all sizes rate online marketing as a more effective marketing channel

Analysis:

We can see that online marketing channels are seen as more effective overall, and the measure of this does not necessarily change as the size of the business increases or decreases. In the next chart we can look at which online channels are favoured by different sizes of SMBs.

Breakdown of online marketing channels:

Effective marketing channels for leads & customers

Key Findings:

  • Online local directories are more effective for smaller SMBs
  • PPC is rated more effective for larger SMBs
  • SEO is well regarded by SMBs of all sizes

Analysis:

Looking at online local directories (yellow), there’s a clear shift in attitude from SMBs of different sizes. The smallest of SMBs see online local directories as a more effective way to attract new customers than their larger counterparts.

PPC (red) is rated higher by the larger SMBs, who may find the costs more palatable, and are more likely to have access to the expertise required to help make this a profitable channel. In a similar vein, SMBs with 21+ employees also find mobile marketing (green) to be more effective. Once again, we can know that this requires a certain level of expertise which is not always readily available to the smallest companies.


Company size vs Success metrics

Respondents were asked to select 2 options from the 5 choices provided.

Success metrics of different industries

Key Findings:

  • SMBs of all sizes place a relatively similar value to each of these success metrics
  • Different KPIs are relevant for different business types (to be looked at in a follow-up article)

Analysis:

The data doesn’t show clear differences between different sized businesses, but we can draw some useful conclusions.

In the original survey, phone calls to a business were the most valued success metric (31%), and we can see that it is valued fairly equally by SMBs of all sizes, with the exception of those with 21-50 employees – who also rate website traffic as a more valuable metric.

It’s clear that SMBs of all sizes value these KPIs on a relatively equal scale. Different types of businesses will more emphasis on different metrics and we plan to publish a follow-up article looking at the different business types of SMBs (coming Feb 2015)


 

Company size vs Mobile readiness

Mobile optimized websites for businesses

Key Findings:

  • SMBs with 21-50 employees are the least ‘mobile ready’
  • The smallest SMBs still require help with mobile sites

Analysis:

In the original survey, 66% said they did have a mobile ready / optimized website (vs. 59% in 2013). Generally the larger an SMB is the more mobile ready they are. However the data for 21-50 SMBs doesn’t support this analysis. This could be an anomaly with the specific businesses who responded or maybe this represents a forgotten middle ground in the market?

For Search Consultants/Agencies –  there is a real opportunity to work with SMBs of all sizes, but particularly those at the smaller scale of the market who are less ready for the age of mobile


Company size vs Feelings about Google+ Local / GMB

Feelings about Google+ Local

Key Findings:

  • Larger businesses  are more positive about Google+ Local / GMB
  • The smallest companies find Google+ Local / GMB most confusing / frustrating
  • Mediums sized SMBs are more negative about Google+ Local / GMB

Analysis:

In the original survey we asked SMBs which of a series of statements best applied to their feelings about Google+ Local / Google My Business. There were 7 statements which could roughly be broken down into 3 distinct sentiments; positive, confused / frustrated & negative.

Looking at the sizes of the SMBs that fall into each category, we can see that it’s the smallest SMBs that find GMB the most confusing. SMBs with between 6-20 employees are the most negative about GMB, whilst those with 21+ employees are the most positive about the service.

Google made a big push in 2014 to embrace small business, and the release of Google My Business was a large part of addressing previous issues & gripes. For this reason it’s interesting that so many of the smallest companies still experience problems with it.

On the flip-side it shows that roughly 40% companies with between 0-5 employees do require outside assistance from knowledgeable local SEOs and it presents an opportunity in that respect.


2. Marketing Consultants & Agencies

Company size vs Outsource / in-house marketing

Outsource and in-house internet marketing

Key Findings:

  • Smaller SMBs are more likely to do internet marketing themselves, larger SMBs outsource
  • 10% of sole proprietors outsource their marketing vs 29% of 50+ SMBs
  • 17% of sole traders do not do any internet marketing

Analysis:

In the original survey, 64% said that they handle their internet marketing in-house (vs. 68% in 2013). Now we can see that 70% of sole proprietors do their own internet marketing – the highest proportion of all respondents.

There’s a direct correlation between business size & the outsourcing of online marketing. As a company grows & hires more staff, they are more likely to entertain the idea of bringing in outside help in the form of an SEO agency / marketing consultant.

For Search Consultants/Agencies – this shows larger SMBs with 6+ employees is likely to bear more fruit as they are more inclined to outsource their marketing.


Company size vs SEO agency satisfaction

SEO agency satisfaction for businesses

Key Findings:

  • Small businesses are more happy with their agency performance
  • Larger businesses are satisfied, but perhaps have more complicated needs

Analysis:

In the original survey we learned that 39% of SMBs love the work that their agency provided! (vs. 9% in 2013).

It was a very positive sign overall, and now looking at company size we can see that it is the smallest SMBs that are most satisfied with the work delivered by their agency / consultant.

So why is this?

  • Do smaller SMBs have lower expectations?
  • Do they expect – even need – a lower ROI?
  • Are they more appreciative of work done?
  • Is the work required by smaller SMBs less demanding so easier to deliver?

Typically smaller businesses need & can handle less customers that bigger businesses, so their requirements for customer acquisition are less. It also stands to reason that working with larger & multi-location SMBs duplicates the work/effort and introduces additional complications.


Company size vs Important SEO agency factors

In the original survey, there were 6 clear factors which stood out as the most important factors for an SEO agency / marketing consultant:

  • 18% – low cost
  • 14% – performance guarantees
  • 13% – having a good reputation
  • 12% – relevant industry experience
  • 9% – being prepared to listen & learn about a clients business
  • 8% – they offer a free audit

As these were the most important factors for SMBs, we’ve looked at the breakdown of these 6 factors against company size.

Important SEO agency factors

Key Findings:

  • It’s more important to larger SMBs that an agency / consultant is willing to learn about their business
  • Low costs are more important to the smallest of SMBs
  • Having a good reputation will benefit an agency approaching larger SMBs

Analysis:

For sole proprietors with zero employees, the most important agency factors are low costs, performance guarantees, and having a good reputation. There is also a similar trend for those SMBs with up to 5 employees – it’s clearly important for those small businesses.

Low cost is a fairly important issue for businesses of all sizes, but it becomes less of an important issue for larger companies. Indeed for the largest SMBs in our survey, it was more important that an agency can demonstrate a good reputation & the fact that they are willing to learn about the intricacies of their business.g (6%), and these are the same SMBs that do not understand or feel confident about doing internet marketing for themselves. Surely in this bracket, there is opportunity for SEOs to offer their services & take something which is considered a bit of a burden, off of their hands.

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