A study conducted by market-research agency Opinium for Amazon Ads, the advertising arm of Amazon.com Inc., found that over 70% of small and medium-sized businesses (SMBs) are prioritizing investment in advertising. These businesses are primarily seeking advertising slots to penetrate both the Indian and global markets, with 7 out of 10 actively pursuing this strategy.
The research revealed that 70% above Indian SMBs are investing in advertising, with 85% of these businesses successfully acquiring new customers through their advertising efforts. This indicates a strong belief in the potential of advertising to drive growth and customer acquisition among SMBs.
However, the study also highlighted that 28% of the surveyed businesses are skeptical about advertising, citing concerns over uncalculated returns and insufficient satisfaction with results. The survey included a total of 300 businesses, providing a comprehensive overview of the current advertising landscape for SMBs.
“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 challenges which a brand/business face is to fix the budget allocation. Advertising and marketing budget allocation is the most important aspect for a business. Approximately 30% of Indian SMBs face challenges with budget allocation, while 36% find creating compelling content to be their most significant obstacle.
“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.
This study highlights advanced technologies in advertising, currently technology has evolved the ad space in a rapid manner. More than two-thirds of SMBs are optimistic about the potential improvements artificial intelligence (AI) can bring to their campaigns. Currently, around 30% are already integrating AI capabilities into their teams.
SMB’s need effective solutioning in the ad space in a regular manner. The findings highlight a global demand among SMBs for effective advertising solutions that can cater to different operational scales and objectives.
“Our research indicates that SMBs across different countries share similar needs and constraints. This uniformity allows us to develop and apply solutions globally without major adjustments. However, specific market characteristics are considered to ensure relevancy and effectiveness,” said Kapil Sharma, director of growth customer sales at Amazon Ads India.
Amazon aims to digitize 10 million SMBs and facilitate $20 billion in e-commerce exports from India by 2025.
Source – Mint
