Changes On Main Street: The March Of Small Businesses.
The pandemic forged a new pattern for local markets as millions of new businesses were created across multiple categories, replacing the millions of older, established ones that failed in 2020. Between 2019 and 2022, the number of businesses increased 2.6 times faster than the number of employees. At Borrell Miami on Tuesday, Corey Elliott, Executive VP for Local Market Intelligence at Borrell Associates, identified seven ways these recently formed local businesses are different from older businesses, based on results from the research firm’s latest local advertiser survey.
Younger businesses tend to be novice marketers
The people running newly minted local businesses have invested considerably fewer hours in marketing roles than their peers at older businesses.
They buy fewer types of media
New local businesses purchase an average of 4.3 media types compared to 5.8 for older businesses.
They're more likely to increase ad budgets
More than one in four (28%) say they plan to spend more on advertising in 2023 versus 18% for larger businesses.
They’re less likely to use traditional forms of media
Newer merchants lean towards digital media, such as social media and online listings, and are less likely to use cable, broadcast TV, and magazine ads.
They're far more likely to try a new type of media marketing in 2023
Newer businesses have a propensity to roll the dice on a marketing type they didn’t use last year.
They’re more likely to have bought digital from a national player
Seven in ten said they bought digital from a social media company, 42% from Google. Both are a little higher than for older businesses.
They’re more likely to be unsatisfied
New businesses they tend to rate media lower. For example, only 23% of those buying search engine marketing rated it as extremely effective, compared to 59% of older businesses.
In a presentation at the local media conference, Elliott summed up findings from the latest Borrell Business Barometer, based on a series of questions it asked a panel of hundreds of small and medium-sized businesses. “The last couple of years changed the local landscape, period,” Elliott said. “There's been an incredible growth of smaller, higher propensity businesses out there, newer businesses that are digitally minded but they tend not to have a lot of marketing savvy. They just started a business; they aren’t marketing professionals. Now, if they're younger, they might know how to use digital assets. But a marketing plan, putting it all together, that's something different and that's where they don't have a lot of experience.”
And while the Business Barometer shows new businesses believe that the economic conditions are tough right now, they also understand they need to maintain a marketing presence to keep customers coming in the door in the future. “There's a lot of them out there and you have to pay attention,” Elliott suggested.