72% OF SMBS ARE INVESTING IN ADVERTISING, FINDS STUDY
Seven in every 10 small and medium businesses (SMBs) in India are now investing in advertising to fuel growth in domestic and global markets, according to a new study.
As many as 72% of Indian SMBs are investing in advertising, with 85% reporting success in acquiring new customers, showed the study conducted by market-research agency Opinium for Amazon Ads, advertising arm of the e-commerce giant Amazon.com Inc.
The study, which surveyed 300 Indian SMBs, along with businesses across several countries, also found that 28% of them decided against advertising because of prohibitive costs and unsatisfactory returns.
“As a digital-first and consumer-first brand, effectively communicating our message is critical. Despite our limited budgets, which make Above The Line (ATL) advertising out of reach, we focus on performance-oriented online efforts. Our primary platforms include Amazon, Google and Meta,” said Tushar Khurana, co-founder of Perfora, a dental-care company.
The path to advertising isn’t without challenges. About 30% struggle with budget allocation and 36% find crafting compelling content to be their biggest hurdle.
“Typically, spending around 20% of our revenues on advertising is optimal; most new-age brands allocate between 20 and 40%. While there’s a clear correlation between advertising and sales, the proportion isn’t always consistent. We experience cycles. Generally, increasing our advertising spend tends to boost revenue, although the return on investment might take a hit,” said Khurana.
The study also highlighted the role of advanced technologies in enhancing advertising efficacy, with over two-thirds of SMBs being optimistic about the improvements artificial intelligence (AI) can bring to their campaigns. Around 30% are already equipping their teams with AI capabilities.