New research from Amazon Ads shows that Australian SMBs are benefitting from the positive impact of advertising as they look to expand their businesses both at home and internationally.
The study found that nearly nine in 10 said that their current advertising strategy is successful in acquiring new customers while over seven in 10 said it had helped them to expand their Australian business. More than half said that advertising had helped them grow their business internationally within the last 12 months.
This confidence in advertising led more than a third of Australian SMBs to increase their spend on advertising 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 SMB spend in advertising include social media advertising (70 per cent), followed by online search (63 per cent) and online display (44%). Looking ahead, nearly a quarter (24%) of those sampled said they planned to spend on streaming TV advertising during the next 12 months.
Of the 238 SMBs sampled, over two-thirds said they currently spend on advertising, compared to 32% that do not spend on advertising at all.
Despite the success enjoyed by some, not all SMBs feel they need advertising to grow their business. When SMBs not currently advertising were asked why, 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 (ROI).
Even among SMBs that are currently spending on advertising, challenges remain. Three in 10 said that their biggest challenge was lack of budget, followed by just under a third citing a lack of time and resources, and 28 per cent saying 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.
“We aim to make advertising as simple as possible for any small business, with easy-to-use tools and resources that offer a low cost of entry, closed-loop measurement, and the ability to introduce their products to customers at scale.”
There is a clear belief in the power of technology to enhance the impact of advertising among Australian SMBs and to help them solve existing problems, as just under half of Australian SMBs said they believe AI will improve the performance of their advertising campaigns. As a result, almost one in five of those sampled are currently training their teams on how to use AI technology for advertising purposes.
