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New Small Businesses Are Willing to Spend on Advertising

by | Jul 27, 2017 | BIA, Blog, SAM, SMBs

New small businesses need to advertise to grow their businesses but, as shown in results from our Local Commerce Monitor™ survey of small businesses (Q3/2016), they spend far less than established (defined as growing or maintaining size and share) small businesses. When asked about the most important factors in determining their ad spend, new small businesses responded that their top two factors were “the amount of money available after other expenses are paid” and “our expected revenue.” In other words — it boils down to money and new small businesses typically do not have a lot to spare. While they may not spend as much as established small businesses, they are willing to spend when they have to. Core new small businesses, those that spend under $25,000 annually, spent an average of $3,431 in the last 12 months. Plus Spender new small businesses, those that spend over $25,000 annually, spent an average $32,364. These amounts are considerably lower than the established small businesses where Core spent an average $5,928 and Plus Spenders spent an average $84,505.

Service providers that market to new small businesses need to understand that this group strongly prefers “Do It Yourself” options for advertising and marketing, primarily because those options are less expensive and they can do them on their own time schedule. Service providers targeting this group of small businesses need to offer, and show the value of, introductory managed services that can relieve them of their DIY burden. Services such as online/cloud services, social media monitoring, email marketing and SEO will resonant with this group.

New vs Established SMBs Advertising Spend in Last 12 Months (LCM)

For more details on new small businesses and established small businesses, how much they spend and other advertising habits check out our latest Small Business Research Reports in the BIA/Kelsey shop.


BIA/Kelsey’s LCM, Wave 20 reports can be purchased a la carte in the BIA/Kelsey eStoreOur 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, our reports provide analysis on the best product and service offers for highly coveted groups of SMBs.