ReachLocal report reveals Aussie SMEs complacent Amazon is coming

The digital marketing company’s latest report showed most local SMEs are ‘confident’ Amazon won’t affect their business

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A vast majority of Aussie SMEs are confident Amazon will not impact their business, a new report released by ReachLocal has found.

The global digital marketing technologies company’s latest SME Online Marketing Survey 2017, which analysed 150 survey responses from SME owners and employees in Australia and New Zealand, revealed some startling trends in the current state of digital marketing in the SME space, including that 77 per cent didn't think Amazon would impact their business.

ReachLocal chief product officer, Kris Barton, said while the high percentage could be impacted by the fact that the majority of respondents were from services businesses, he agreed there is still complacency around Amazon’s imminent local arrival and the sentiment of ‘I’ll just deal with it later’.

Businesses that don't react and put a good digital marketing strategy in place will open themselves up for disruption by businesses who do embrace the potential Amazon offers, he said.

“That's where investing in a digital marketing strategy, where you are showing up in search results relevant for your target audience and social advertising that works, will be key to be ensure you're front and centre to your target consumer,” he said.

Barton told CMO SMEs in Australia simply need to accept the fact Amazon is coming and see it as a friendly relationship which businesses can really take advantage of.

"After all, Amazon is a great marketplace where they've really simplified the logistics of payment how it gets delivered to your home, which is fantastic. And businesses can take advantage of that and be part of that growth opportunity - so that's the good side of it,” he said.

Dwindling budgets spent on digital marketing

But despite the pressing need to focus on digital marketing, the report revealed 72 per cent of SME owners and marketers spend less than $5000 per month on marketing, while 22 per cent spend under $500 per month. Only 10 per cent of SME owners or employees rate their understanding of the latest digital marketing trends as excellent.

According to Barton, it’s a now a matter of educating SMEs to understand the true power of digital marketing and leveraging the right tools.

“It’s one of the things we try and talk to our clients about it because it's definitely an education issue,” he said. “It’s the concern of ‘well I’m spending that money I don't know what I'm getting for it’. One of the things we will always try to do is to have a conversation and understand the basics of the business and the average value of a new customer – and what are you willing to pay to acquire that customer. Then the business can make that informed decision of what is good for them moving forward."

Alarmingly, ReachLocal's survey found two-thirds of SMEs don’t have the time or resources to focus on digital marketing in the first place. Only a limited amount claim to have an excellent understanding of the topic and almost half invest less than 2 hours per week, while 24 per cent spend merely 3–6 hours per week. Only one in 10 SMEs spend 7 or more hours a week on digital marketing.

“Not having enough time and resources to focus on digital marketing is a growing problem and we’ve seen this for a while - and Australia is a lot like the rest of the world, especially with the SME segment,” Barton said. “There are people running businesses but their ambition in life is not to be a marketer. So marketing is always one of the things that kind of falls by the wayside. That's where as a company we want to be able to step in and help solve that problem for them.”

The report showed 66 per cent of SMES are reluctant to even embrace new technologies and more than half don’t intend to in FY18. For those who are, the most popular new technology used for advertising is video marketing (27 per cent).

The top three channels SMEs are investing their marketing budgets into are social media advertising (56 per cent), SEO (56 per cent) and search engine advertising (50 per cent). About two-thirds of SMEs are also currently investing in social media marketing with the majority spending their budget on Facebook (73 per cent), followed by Instagram (29 per cent), LinkedIn (26 per cent) and Twitter (20 percent).

Besides that, only 8 per cent of businesses said they invest or plan to invest in new technologies like AR, geofencing and voice, but Barton stressed investment in these emerging areas is set to change.

“Even Google just launched a new augmented reality platform and Apple is coming out with its new one, called ARkit. Everyone is going to start having this technology in their hands and it will change things dramatically.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu          

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