In an era where advertising is increasingly pivotal for business growth, UK small and medium-sized businesses (SMBs) are leveraging strategic advertising to drive both domestic and international expansion.
A recent study by Amazon Ads highlights the significant impact of advertising on these businesses, revealing a landscape where targeted marketing efforts translate into tangible growth and enhanced brand presence.
Success Through Advertising
According to the study, a striking 86% of UK SMBs reported that their current advertising strategies are effective in acquiring new customers.
This success extends beyond customer acquisition; more than three-quarters (76%) noted that advertising has been instrumental in expanding their UK operations. Furthermore, over half (54%) of the SMBs indicated that their advertising efforts have facilitated international growth within the past year.
This international expansion is a testament to the power of well-placed advertising in reaching new markets and driving business development on a global scale.
Increasing Investment in Advertising
Confidence in advertising’s effectiveness has led a significant portion of SMBs to increase their advertising expenditure. More than two in five (44%) businesses increased their advertising spend over the past year, while 35% maintained their budget at the previous year’s level.
The motivations behind this increased spend are clear: 48% aimed to drive awareness of new products or services, and 51% sought to enhance customer awareness of their brand. This trend highlights a strategic shift towards leveraging advertising to not only sustain but also grow market presence and customer engagement.
Preferred Advertising Channels
Social media advertising emerged as the most popular channel, with 65% of SMBs allocating part of their budget to this platform. Online search (58%) and online display advertising (40%) also featured prominently in their strategies.
The effectiveness of social media advertising is attributed to its ability to target specific demographics, engage with customers directly, and create a sense of community around brands.
Looking forward, more than a quarter (28%) of SMBs plan to invest in streaming TV advertising in the next 12 months. This shift indicates an evolving approach to reach audiences through diverse mediums, tapping into the growing trend of on-demand content consumption.
Challenges in Advertising
Despite the positive outcomes reported by many, challenges persist. Among the 300 SMBs sampled, 71% are currently spending on advertising, leaving 29% that do not.
The primary reasons for not investing in advertising include its perceived high cost (42%) and a lack of return on previous investments (38%). This indicates a need for more cost-effective solutions and better measurement tools to demonstrate the value of advertising.
Even among those who do advertise, difficulties abound. Three in ten (30%) businesses struggle to determine where to focus their advertising budgets to achieve their goals. Measuring campaign performance (26%) and creating compelling content (26%) are also significant challenges that businesses face.
These challenges highlight the complexity of advertising and the need for better support and resources to help SMBs navigate the advertising landscape effectively.
The Role of AI in Future Advertising
Looking ahead, there is a strong belief in the power of technology to enhance advertising efforts. Nearly half (45%) of UK SMBs believe that artificial intelligence (AI) will improve the performance of their advertising campaigns.
This optimism is translating into action, with almost one in five (18%) businesses currently training their teams to utilise AI technology for advertising purposes.
The director of global SMB marketing at Amazon Ads emphasised the transformative potential of AI and machine learning in democratising advertising. These technologies are enabling small businesses to create impactful content that reaches relevant audiences at scale and at the right time.
By automating aspects of campaign management and providing deeper insights into customer behaviour, AI is poised to make advertising more efficient and effective for SMBs.
Conclusion
The findings from the Amazon Ads study underscore the pivotal role that advertising plays in the growth strategies of UK SMBs. While challenges remain, the confidence in advertising’s ability to drive customer acquisition, brand awareness, and international expansion is evident.
As these businesses continue to invest in and refine their advertising strategies, leveraging new technologies like AI, they are poised to achieve even greater success in the competitive marketplace. The future looks promising for UK SMBs, with advertising serving as a critical catalyst for growth and innovation.
Furthermore, by removing barriers and offering accessible, effective advertising solutions, companies like Amazon Ads are helping SMBs navigate the complexities of advertising and maximise their growth potential. As the advertising landscape evolves, UK SMBs are well-positioned to harness the power of technology and strategic marketing to achieve their business goals.
