Do SMBs Value Advertising at All?

A recent poll of small business owners (SMBs) from business networking site Alignable is at once totally unsurprising and very interesting in other respects. The single-question survey asked, “What’s the best way to reach and acquire local customers?”

The options were: word of mouth and a number of media channels, including traditional and digital. TV was not on the list nor were ratings and review sites (e.g., Yelp). Below are the results.

The initial reaction to this is going to be, “Of course word of mouth is seen as the best way to acquire customers.” And that’s been true historically. But if you think about this a bit more there’s another implication — and it’s not pretty.

Alignable SMB poll

Source: Alignable, n=8,000 small business owners (9/17)

That implication is that advertising has little or no value to local business owners or they don’t see or understand its value. In turn, that further implies — and I realize I’m teasing this out of an opaque survey — that these business owners have very little understanding of today’s media landscape and how their customers use media and technology tools to find and choose them.

The structure of the survey forced a single answer (“the best way”) and it doesn’t offer non-advertising choices such as “search” or “social media.” But the word “reach” is also there: how do you “reach new customers”? In fact, word of mouth is not the best way to “reach” new customers, though it may be a highly reliable way to obtain them.

Admittedly my definition of “reach” is media-industry centric, as in audience reach. But almost without exception, every WoM recommendation is now going to be followed by an online review lookup, which business owners may not fully understand.

Anecdotal contacts with SMBs at LSA’s digital bootcamps — a self-selected group that does care about marketing and advertising — do reflect an understanding of  how digital tools impact business. But, despite the fact that “online ads” received the second-most votes in the Alignable survey, there’s something very “retro” (even depressing) here — depressing because SMBs that don’t understand the importance of marketing are likely to fail.

Data from other, more traditional multi-question surveys tend to show some SMBs value marketing as a basic matter and some do not. My take on the above findings is that a large number (perhaps most) of these respondents probably don’t fully understand the customer journey or the importance of marketing and technology to their success.

It’s relatively easy to dismiss my interpretation as going too far, but I’d love to hear your thoughts.

2 Responses to “Do SMBs Value Advertising at All?”

  1. I need more information before I see any value in this survey. My concern is the size of the businesses surveyed. How were these businesses segmented? Are the majority of respondents individuals? There are 27 million small businesses in the US. 22 million don’t have employees. In my experience solopreneurs do very little advertising. And, to your point, they consider time spent on social media an advertising activity.

  2. Greg Sterling says:

    Survey is sloppy and incomplete. But I riffed on it because I think it reflects some SMBs’ suspicion of advertising’s value.

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