The importance of advertising to small businesses
For businesses of any size, being successful depends on building a reputation as a recognised name in any specific field.
From large multi-national corporations to the smallest startups, advertising and marketing are hugely influential in developing how the company is viewed in the eyes of the public.
A company could have the best idea in the world, but if it is not marketed or advertised in the right way, any attempts to develop it further could prove fruitless.
Damning statistics
A recent Advertising Association report suggested that as little as 30% of SMEs in the UK are advertising in a way that stimulates competition, innovation and expansion.
Given the high number of small businesses across the UK, this figure seems incredibly low; especially when considering the potential impacts that the right advertising could have on sales and turnover.
The report, titled ‘Advertising Pays 2: How advertising can unlock UK growth potential’, claims that SMEs account for 50% of jobs in the UK and 40% of revenue, yet only 18% of total advertising spend.
This would suggest an imbalance between the two, and highlights the fact that even greater sales figures could be achieved with the right forms of marketing.
Many business owners want to improve their marketing potential in almost every sector across the globe, but why is it such an important factor to consider?
Advertising in the right way
Expanding a company is often a sign of success, but it can also be required to stave off the financial pressures that the current economic climate can heap on companies.
If these pressures are allowed to develop to an even greater extent, financial restructuring can be required in order to turn around the business and prevent it from entering insolvency.
Digital and social platforms are a key part of boosting a business profile and these are often the first areas of the market that SMEs explore as they look for new ways to grow and achieve success.
Building contacts with customers and identifying the right consumer market are key, as increased sales and profit should follow suit if the initial marketing is done in the right way.
If advertising and marketing campaigns are targeted to a certain audience, the results could be better, but generally increasing brand awareness can have significant results.
This is highlighted in the report by the fact that 59% of SMEs said advertising boosted their sales.
To put things in perspective, the report claims that for every £1 spent on advertising by an SME, the relative impact on growth will be eight times as large if the same sum was spent by a larger firm.
By Phil Smith