What’s going to happen with the pandemic? Is it going to get worse? Those sorts of questions are weighing on small- and medium-sized businesses, according to Borrell Associates’ latest tracking survey of local businesses. It finds COVID is a bigger worry for them, topping even concerns about ad targeting or getting a return on their marketing investments.
“It’s as if they’re waiting for that other shoe to drop, that shoe being mandates of some form or another,” says Corey Elliott, Executive VP of Local Market Intelligence at Borrell Associates.
The firm’s new data shows a mixed outlook when it comes to how small- and medium-sized businesses are assessing their advertising spending. Borrell finds a quarter of the businesses it surveyed in August said they plan to spend more on marketing in the next six months compared to 19% that expect to scale back their budgets. That is a step back from the 31% who said in May that they were gearing up to spend more. Yet the latest number is also an improvement over the 20% that forecast more ad spending during August 2020.
“This could suggest they want to have a good holiday season,” said Elliott on Borrell’s latest chapter in its ongoing Local Marketing Minute video series.
One reason that some local businesses may be nervous about spending is that their optimism about the coming six months has taken a dip in recent months as COVID numbers rose and the rollout of vaccines stalled. Borrell says just 14% of those companies it surveyed in August said they expect their own business will improve in the coming six months while 40% think things will worsen. That is roughly the same numbers seen last November when the election hung over the economy – and down from the 45% in February and 47% in May that were optimistic about the future.
In a similar metric, 18% of those surveyed in August said sustaining a small business is easier than it was in the prior six months while 57% said it’s harder. That is much better compared to a year ago when just 3% said things were easier, but the latest data is down from the 26% who said in May their job running a small business was easier. Elliott says the latest survey results are very similar to what Borrell’s survey showed in the marketplace in February.
“This tells me if someone can address my concerns about COVID, targetability, and prove to me you work, and help me understand what worked in 2020 so I can apply it now in case something happens, that would be a hell of a partner,” said Elliott. “We all want to get back to normal, including SMBs, and they’re willing to invest – more so than last year. A lot of this may be [that] we got too optimistic, too fast. Regardless, the cool thing is they are more likely to spend this year than last year.”