Small Companies Spend More As Economy Grows

SMEs have substantially raised their marketing budgets by an average of 20 per cent in 2014, a new survey has found.

A study of 1,000 firms by Optimus Performance Marketing revealed this typical increase was focused on 59 per cent of firms, with 31 per cent saying they were maintaining the same level of marketing spend as they had in 2013. That left just ten per cent saying they would reduce their outlay.

The primary reason stated for the rise in spend was the desire of companies to spend more on digital and social media, with 43 per cent citing this as a reason for spending more.

Other common reasons for increased budgets included the outsourcing of marketing work to other firms and freelancers (28 per cent), an increase in the number of people working in the marketing departments (17 per cent), more strategic planning (14 per cent) and increased training of current staff in digital and online skilling (seven per cent).

Managing director at Optimus Mark Russell said: "Whilst in previous years, it may have seemed risky or ambitious for SMEs to invest substantial amounts of finances in a marketing spend, it seems from our results that the tables have now turned and marketing, particularly online marketing and social media, is an area with huge growth potential across a plethora of SME industries."

However, he added the extra spend will not bring a strong return on investment unless companies have a clear understanding of all target markets and can put together marketing strategies appropriate to them.

The use of mobile advertising is one area many increasingly tech-savvy SMEs may wish to focus their investment into.

This has grown rapidly across all firms in the UK, with the New Mobile Econsultancy Report, published by Econsultancy and OpenX, revealing that mobile's share of total ad spend in the UK rose from ten per cent out of a total of £5.45 billion in 2012 to 16 per cent of a £6.3 billion outlay in 2013.

Expert Opinion

The growing confidence seen in the economy has been reflected in the way many SMEs have looked to develop more ambitious plans for the future. Central to that for many is to build on their profile through marketing, whether this is through traditional offline mediums or across the online space. <br/> <br/>"It is interesting to see the numerous approaches that small businesses are taking to this issue, whether it is to increase and introduce training for current staff or to take on new recruits to handle such matters. <br/> <br/>"Regardless of the approach, as with any growth plans it is vital that SMEs speak to legal advisors to fully understand the implications that their ambitions may have on their organisation. These could range from HR issues in terms of recruitment, employment law matters regarding policies for using online platforms and general data protection issues which may arise with online promotions and services." Fergal Dowling - Partner