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Over Half of Retailers’ Local Ad Spend Goes to Digital

by | Jan 24, 2019 | BIA, Blog, SAM, SMBs

Last week Amazon announced that millions of small and medium-sized businesses (SMBs) worldwide are selling through Amazon (over one million alone in the U.S.). According to Amazon, it has helped more than 50,000 small and medium-sized businesses exceeded $500,000 in sales in its stores worldwide, and nearly 200,000 surpassed $100,000 in sales through Amazon’s marketplace. “This year growth of small and medium-sized businesses in our stores enabled business owners to create new products, provide greater selection to customers, and reinvest in their local communities through job creation,” said Nick Denissen, Vice President for Amazon. “Since we opened our shelves to third-party sellers in 2001, small and medium-sized businesses have been an integral part of Amazon’s DNA. Our guiding star is an obsession with customers, and the service we’ve built is more powerful because we have small and medium-sized businesses complementing and competing with our retail business.”

According to our Survey of Advertising and Marketing (SAM)™, 37% of retail small and medium-sized businesses reported that at least half of their sales are Internet-based. When it comes to their advertising, retail SMBs use nine different advertising channels to advertise locally, with targeted social ads being the most popular (72% usage). Email and search round out their top three most used advertising channels. For promotional channels, websites and Facebook pages were tops. Over half of their advertising budgets go to digital advertising channels. With over half of their ad budget going to digital, it’s no surprise the media channels that they currently use, and that they intend to increase spending on, are some of the media channels they already use the most – email and search. Geo-targeted social ads were also high on their list along with cable and out-of-home advertising.

It is no surprise that digital, social/mobile and desktop search rank high for SMBs in the retail category. For traditional media sellers – make sure you are selling digital across mobile and social not just search on your network.

Reports showing SAM data by vertical category will be released in February.

The SAM™ survey data as well as our local forecast data is available through BIA’s local advertising dashboard, BIA ADVantage and is offered in a searchable, downloadable format. Insights and analytical reports from the survey are also provided. Additional information about BIA’s SAM study can be found here.