More than a third (33%) of Australian small to medium businesses (SMBs) increased their spend on advertising during the past year, according to research from Amazon Ads.
However, another third (32%) do not currently spend on any kind of advertising, with the most common response as to why being that it is too expensive (44%) while a similar number (38%) said they haven’t seen a return on previous investments (ROI).
The study, which also found that 39% of SMBs kept their budget the same year-on-year, saw Amazon Ads work with market research agency Opinium to survey over 4,000 B2C marketing decision makers working at SMBs worldwide earlier this year.
Nearly nine in 10 (88%) said that their current advertising strategy is successful in acquiring new customers while over seven in 10 (71%) said it had helped them to expand their Australian business. More than half (54%) said that advertising had helped them grow their business internationally within the last 12 months.
The most popular channels for SMB spend in advertising were social media advertising (70%), followed by online search (63%) and online display (44%). Nearly a quarter (24%) of those sampled said they planned to spend on streaming TV advertising during the next 12 months.
Even among SMBs that are currently spending on advertising, challenges remain, as over three in 10 (32%) said that their biggest challenge was lack of budget.
This was followed by just under a third (29%) citing a lack of time and resources and 28% saying that knowing where to focus their advertising budget was the greatest challenge their business faced when it came to advertising successfully.
Looking to the future, just under half (46%) of Australian SMBs said they believe AI will improve the performance of their advertising campaigns. As a result, almost one in five (19%) of those sampled are currently training their teams on how to use AI technology for advertising purposes.
Amazon Ads Australia and New Zealand's head of endemic advertising, Kasey Jamison, said that many SMBs are 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.
“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," she said.
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