This report is a view of SMBs that told us they prefer a “Do It Yourself” (or “Do It Myself”) model for their advertising and marketing services. This is in contrast to the higher-service level models of “Do It With Me” or “Do It For Me.” (The preference for service models is one of the questions we asked in Wave 18 of our Local Commerce Monitor survey of small-and-medium businesses).

The advertising and marketing services could include, for example: website creation, marketing automation, leads management, media performance analysis, CRM, listings management, etc.

Many of our clients are asking us for information on SMBs that use DIY products. DIY products are popular for several reasons, low-cost being foremost. Publishers, media companies and other service providers find many challenges to implementing a DIY model, however. These run the gamut, from a lack of follow-through by the SMB customers, to frustrations in trying to upsell SMBs to additional products.

In profiling SMBs that prefer the DIY model, we found several surprises. For example, these SMBs are often well-established businesses, in the “maintenance” lifecycle stage. They tend to be moderate-sized SMBs (not the very smallest), and spend more than $13,000 annually on advertising. They’re very oriented to digital media in general, and social media in particular.

This report also includes commentary by Stacey Sedbrook, our Vice President of Strategic Sales Consulting, on the principles and best practices for implementing a DIY model.

The full report can be viewed and downloaded by clients of BIA/Kelsey here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor™ survey. Our LCM reports look at where particular SMBs (broken out by size, vertical, etc.) spend the most, as well as the top channels for marketing and advertising. Additionally it provides analysis on the best product and service offers for these highly coveted groups of SMBs. In the coming weeks and months we will be looking at SMBs who prefer “Do It With Me” and “Do It For Me” service models, and SMBs by vertical. To learn more about our LCM survey, click here.

To purchase any of our Local Commerce Monitor drill-down reports, check out our new BIA/Kelsey Shop.

*Actually, I stood up — at the “standing desk” I recently cobbled together. Not just any standing desk — but one where I’m standing on a Bosu ball while at my computer. Try it!

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The most popular channels used for advertising by established businesses are a mix of social, digital and traditional: Facebook page, website, email marketing, LinkedIn and direct mail. Even their future plans for advertising shows a mix of digital and traditional. Search, email and print advertising are the top three future channels.

Established SMBs had an average annual spend of $23,331 on advertising and promotion, compared to $17,360 for newly established SMBs. 55.5% of established SMBs plan to maintain their currently level of spending in 2015, while 31% plan to increase their spending.

Established SMBs are heavy users of social with 70% of established business respondents said they track “likes” on social media. 61% monitor customer comments about their business. 71% of them use a free or do-it-yourself service to do so.

Clients of the BIA/Kelsey Advisory Services can find the full established SMBs spotlight report here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor™ survey of small-and-medium businesses. Our LCM reports look at where particular SMBs (broken out by size, vertical, etc.) spend the most, as well as the top channels for marketing and advertising. Additionally it provides analysis on the best product and service offers for these highly coveted groups of SMBs. In the coming weeks and months we will be looking at SMBs who prefer the DIY online advertising models, those that prefer DIWM or DIFM models, and SMBs by vertical. To learn more about our LCM survey, click here.

2015 Spend Intentions for Established SMBs

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We’re reporting the Local Commerce Monitor (LCM) results by these slices at the request of our clients. (We also report out the LCM results by many other slices, including “super verticals,” lifecycle stage, spending level, etc.)

The average total spend for advertising and promotions annually among SMBs with 10-99 employees is $53,440. This spending level places this segment of SMBs closer to Plus Spenders and franchise SMBs than to segments of smaller SMBs like the Core Spenders.

The top advertising/marketing priority for SMBs with 10-99 employees for the next 12 months is SEM/SEO. This is consistent with other size brackets, and not surprising considering the steadily increasing importance, and ever-changing rules, of SEO.

Broadly speaking, SMBs in this size range often find themselves straddling the worlds of digital and traditional media. Their media mix puts more weight on classic media, including direct mail, print and Internet Yellow Pages, newspapers and magazines. They’re also loyal to the sales channels attached to these media, even for the purchase of online ads. For example, Print or Internet Yellow Pages is the second most used channel for purchasing online ads, used by 27.5% of respondents.

Service model preference leans strongly towards the “Do it with me” model, preferred by 52.8% of respondents, which is a sharp distinction to the smaller SMBs, which favor the “Do it myself” model.

Customer loyalty programs are popular with these SMBs, with 43.1 percent already having a customer loyalty program, and another 26.8 percent saying they plan to add one in the next 12 months — for a total of 69.9 percent.

Clients of the BIA/Kelsey Advisory Services can find the full report here.

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Franchises use more targeted marketing and advertising, are more engaged with their customers, and are also more disciplined across the full range of activities required in reaching and serving customers. They use more marketing tools and platforms, loyalty programs, mobile marketing, social media, cloud platforms, etc.

In particular, franchises are well ahead of other SMBs in their use of personalized, targeted digital media and platforms including Pinterest, mobile coupons and deals, text messages, Twitter ads, etc. Looking at the media usage findings from LCM is like looking into a new media laboratory (look out, MIT!).

Franchises estimate that about one-half of all their sales in the next 12 months will be through discount programs. This arrestingly-high reading is actually consistent with other behaviors of franchises — such as their near-saturation use of loyalty programs (and the personalized, targeted media mentioned above). Franchises are building close and deep relationships with their customers, and they’re accomplishing this by using a host of digital media and platforms.

The bottom line: Franchises might be viewed as a vanguard — showing us where the rest of the SMB world is heading.

Clients of the BIA/Kelsey Advisory Services can find the full report here.

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To be certain, the 2-9 employee bracket is quite interesting because it often represents a stage of development in which the SMB is deciding what it wants to be when it grows up, so to speak. This is a point at which some SMBs decide they’ll style themselves as a “lifestyle” business, and won’t focus on growth as much as on providing a high-quality lifestyle for the owner. On the other hand, other SMBs will decide to adopt a growth trajectory to become a significant player in their niche.

This “pre-teen” period for many of the SMBs in the 2-9 employee bracket poses unique challenges — and rewards — for service providers. For example:

– These SMBs use a fairly broad mix of media, and are applying increasingly-sophisticated analytics to assess media performance and make budget allocation decisions. Accordingly, they’re probably receptive to tools and platforms to grow their analytic capabilities.

– Over the next 12 months, 43.6 percent rate SEM/SEO as a “very high” or “extremely high” priority, suggesting they may be open to various tools (and learning) to master these activities.

– Email marketing also ranks fairly high both as a medium currently being used, and as a priority, again suggesting this may be a product area with a lot of interest for SMBs in this size bracket.

In sum, for many SMBs in the 2-9 employee bracket, this is the stage at which long-term relationships are formed — with media, products, platforms, channels and vendors. An important segment to pay attention to!

Clients of the BIA/Kelsey Advisory Services can find the full 2-9 employee spotlight report here. This report is one of a series of drill-down reports on the findings from Wave 18 of BIA/Kelsey’s Local Commerce Monitor survey of small-and-medium businesses. In the coming weeks we will be looking at even larger SMBs with between 10-99 employees, new SMBs, established and growing SMBs, and more. To learn more about our LCM survey, click here.

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According to the survey, more than half of these VSBs chose to “do it myself” when purchasing online advertising, while only 24 percent chose any kind of paid assistance with “do it with me” or “do it for me” options. Still VSBs do remain open to managed services. LCM Wave 18 reveals that VSBs who use a third party (12.5 percent) pay an average $661 a year on maintaining and operating their online properties.

Economic necessity is one key reason behind the do-it-yourself nature of VSBs. More than 68 percent of the VSB respondents in our survey reported annual revenue of less than $100,000. While their average annual advertising budget is $4,252, four out of the five most popular channels used for advertising (Facebook pages, LinkedIn, websites and email marketing) are offered free or have low cost options.

Other business services that VSBs report they “DIY” include tracking sources of leads and monitoring customer comments. Opportunities exist with this group for low cost solutions (DIY or managed) for communicating with their customers and managing their leads/customer lists. Email marketing and online satisfaction surveys ranked high among advertising services they were considering using in 2015.

The VSB report released today is just the first peek into our LCM data by number of employees at SMBs. In the coming weeks we will be looking at mid-sized SMBs with under 10 employees, and even larger SMBs with between 10-99 employees.

Clients of the BIA/Kelsey Advisory Services can find the full Very Small Businesses spotlight report here. To learn more about our LCM survey, click here.

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Home and Trade Services SMBs report their most popular channels to use are from traditional media: newspapers, print yellow pages and direct mail. Digital is also part of the Top 5 most used with Facebook pages and a website rounding it out. Given the vertical’s heavy reliance on traditional media, there’s an opportunity for traditional media players to bundle digital media to their offerings.

Home and Trade Services is the only vertical industry in our study with print yellow pages among the Top 5 media used for advertising and promotion, and was only in the Top 10 of one other vertical — Professional Services. Print yellow pages also had the highest return on investment (ROI) of the top three traditional media — with nearly 28% saying that their ROI on print yellow pages was either excellent (10-19x) or extraordinary (over 20x) spend.

SMBs in the Home and Trade Vertical had an average annual advertising spend of $12,573 in Wave 18 (Q3/2014), down from $19,238 in the previous wave (Q3/2013). Home and Trade Service SMBs overall will not increase their ad budget in 2015. Nearly 61% of the SMBs in the Home and Trade Services vertical reported that they would maintain their ad spend over the next 12 months and 20.8% say they will increase. While SMBs in the Home and Trade Services utilize traditional media, their budget allocation for digital is increasing. On average, SMBs in the Home and Trade Services vertical allocated 24.7% of their advertising budget to digital in the last 12 months. Over the next 12 months, they report plans to increase it to 27.7%.

Local media players, especially in the traditional channels, have an opportunity to continue to serve their Home and Trade Services SMBs through traditional channels as well as grabbing more of their ad dollars by offering digital products.

Clients of the BIA/Kelsey Advisory Services can find the full Home and Trade Services vertical report here. Interested in finding out more about our LCM survey? Click here.

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One big trend we are seeing in our Local Commerce Monitor (LCM) findings is that low-spending SMBs are taking advantage of the lower price levels of digital and social media and reducing their overall ad spend. This has big implications for traditional media sellers as well as pure plays trying to find the right go to market strategy to reach smaller spenders at scale.

LCM tracks low-spending and high-spending SMBs separately. We call the low-spending SMBs “Core SMBs”, and define them as those spending less than $25,000 annually on advertising and promotion. In Wave 18, we saw a continuation of the downward pull on ad spending by Core SMBs due to the lower price points of digital media in general and social media in particular. We detail these findings in a new report, “LCM 18: Advertising Trends of Core SMBs,” available to BIA/Kelsey clients.

At around $2,500, average media spend by Core SMBs is down around 17 percent from the $3,000 average spend in 2011. We’re clearly seeing a de-emphasis on paid media, in favor of social media and other ways to engage customers, a trend that became apparent a year ago, in the LCM Wave 17 findings.

With Core SMBs, digital media, particularly social media, showed strength across the board. Core SMBs indicated bold intentions to increase spending on digital media. Social media achieved new heights in reach (69 percent) and spend (25 percent of total spend).

When asked about service models, 48.3 percent of Core SMBs said they preferred the “Do-it-myself” model, as opposed to the “Do-it-with-me” or “Do-it-for-me” models. This strong reading is a key message for companies serving the lower range of the SMB market.

In the section of the LCM survey about channels, we explored several behaviors and attitudes. For instance, we saw a big increase in Core SMBs concentrating their online ad purchases through a single channel. A record 82 percent of Core SMBs report using only one channel for purchasing online ad products. (Note: This metric considers “Do-it-myself” a channel).

At the same time, we also saw numerous differences between Core SMBs and high-spending SMBs. For example, there’s a huge gap in the usage level of online services. Only 12 percent of Core SMBs use some type of CRM system, compared to a full 50 percent of high-spending SMBs. Evaluated along with other data from the LCM survey, findings like this are crucial for companies serving the lower range of the SMB market.

Clients of the BIA/Kelsey Advisory Services can find the full report here. Interested in an excerpt? Download one here.

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