Scope of Digital Marketing: 2021 Small Business Trends

Sydney Wess
1/19/2021

More than 9 in 10 small businesses (91%) will engage in digital marketing in 2021. Small businesses looking for digital marketing solutions will choose from a range of different channels and strategies. Companies should consider their business needs, budget, and what benefits specific digital marketing channels will provide when crafting a digital marketing plan for 2021.

Imagine you’re a salesperson. Your goal is to appeal to customers and effectively turn leads into sales. 

Thirty years ago, you may have turned to cold calling or even door-to-door sales to attract new customers.

If you tried those tactics today, probably very few people would engage. The vast majority of purchasers, especially B2B buyers, say they won’t speak to a salesperson until they’ve done their own research.

Instead of answering your cold calls, buyers are researching your company’s digital presence. They’re scanning your website, social media presence, and probably some reviews from past clients. You can guide customers to your services through digital marketing.

Effective digital marketing strategies facilitate consumer research, establish brands, and drive conversions. 

However, digital marketing trends and strategies are constantly changing. Visual Objects surveyed 500 small business owners to determine which digital marketing solutions they plan to use in 2021.     

Our Findings

  • Almost all small businesses (91%) allocate resources to digital marketing functions, demonstrating the importance of digital marketing.
  • A company website is the most popular (51%) digital marketing strategy among small businesses', making them an essential part of most small business marketing plans. 
  • 3 in 4 small businesses (73%) consider social media marketing to be one of their most successful digital marketing channels because of social media’s ability to boost brand awareness.
  • One in five small businesses (19%) will be decreasing video marketing spending in 2021, which experts attribute to production expenses, remote coordination challenges, and in-house production alternatives.
  • Two-thirds of small businesses (64%) that use email marketing execute without marketing or customer relationship management (CRM) software. Experts say that companies who don’t use a CRM fail to realize email marketing’s full value.
  • Only 10% of small businesses will increase their spending on SEO in 2021, in part because of the algorithmic advantage given to larger brands.

Almost All Small Businesses Devote Resources to Digital Marketing

Whether managed through in-house employees, an outside agency, or a software system, digital marketing is a core process for small businesses. 

Currently, 9 in 10 small businesses (91%) allocate resources to digital marketing activities. 

91% of small businesses devote digital marketing resources and employees to digital marketing functions.

Digital marketing can have significant impacts on a company’s bottom line.

Omid Semino, Owner of Diamond Mansion, a jewelry store, is just one example of a small business owner who’s excited about the potential of digital marketing. 

“Digital marketing holds a lot of power in modern times,” Semino said. “If you are going to invest anywhere, it is wise to put [funds] into digital marketing.”

Small businesses are aligning themselves with consumer behavior by devoting resources to digital marketing activities.

In-House Employees Must Balance Marketing Tasks With Other Responsibilities

While small businesses can afford to invest resources in digital marketing, most in-house employees who assist with digital marketing also have other responsibilities. 

These employees must balance their marketing efforts with other work and are unable to give digital marketing their full attention.  

The Manifest found that companies most commonly rely on in-house employees to handle digital marketing rather than hiring an external freelancer or agency.

Richard Dedor, an executive marketing consultant, has witnessed many small businesses debate the benefits of outsourcing digital marketing work to an agency with specialized experience. 

Dedor emphasizes the importance of knowing your brand and staying actively communicating with outsourced partners.  

“There will always be a place for a small business to engage an agency, but that only works when the small business is willing to lift their weight,” Dedor said.

“There will always be a place for a small business to engage an agency, but that only works when the small business is willing to lift their weight.”

Additionally, Dedor encourages companies to make sure that a prospective digital marketing agency can deliver. Small businesses will benefit by asking critical questions about the system and strategy an agency proposes.

Company Websites Are Most Popular Modern Marketing Channel

When customers research businesses, they look to an official website for accurate information on the company. This is why it's important to have a professional website with a great user experience, and web design company can help you.

More than half of small businesses (51%) currently use a website as part of their digital marketing strategy. 

Top Digital Marketing Channels Used by Small Businesses

Company websites are the most common digital marketing channel for small businesses.

An official company website is important to: 

  • Legitimize your business online
  • Generate leads
  • Develop a brand

Experts say it’s possible for small businesses to successfully market themselves without a website. However, marketing strategists such as Andrew Clark from digital marketing firm Duckpin believe company websites are essential for any business committed to digital marketing.   

“People will instinctively want to look up your business and learn more about your business once they hear about it. That is where having a website would make your marketing efforts more effective,” Clark said. “[Regional businesses are] missing out on valuable local traffic from Google by not having a website.”

“[Regional businesses are] missing out on valuable local traffic from Google by not having a website.”

Company websites are the most widely-used digital marketing channel by small businesses and establish a foundation for a small business’s digital presence. 

Social Media Marketing Brings Small Businesses Most Success

Social media is a popular digital marketing channel because many people spend their days scrolling through various social channels.

About three-quarters of small businesses (73%) ranked social media as one their top-performing digital marketing channels in meeting business objectives. 

73% of small businesses consider social media one of their most successful digital marketing channels.

Small businesses find social media is an effective strategy to achieve their marketing-focused business objectives. 

Antonio Wells, owner of marketing agency NAMYNOT Inc., attributes social media’s popularity to the low barrier of entry, which allows small businesses to compete in crowded markets.

“I have seen many brands and companies who are wildly successful on social media, and their websites do not match such stature,” Wells said. “Just one viral post can catapult an influencer.”

“Just one viral post can catapult an influencer.”

Social media is popular among small businesses for leveling the playing field with large-scale brands.

Social Media Boosts Brand Awareness

Small businesses use social media to connect with customers and establish a strong brand identity.

Of small businesses who plan to use social media in 2021, 22% say their primary objective is to build brand awareness, which is larger than any other motivation.

Small businesses may attribute success to social media because their goals for the channel are aligned with its purpose. 

Stephanie Brown, social media consultant and coach at The Content Fixer, believes small businesses genuinely connect with customers over social media. 

“Social media also allows for more authentic connection with your dream clients,” Brown said. “Other marketing channels may not allow you to establish a real know-like-trust relationship with the people you're trying to reach.”

“Social media also allows for more authentic connection with your dream clients.”

Companies aiming to increase brand awareness find success by marketing through social media. 

Companies Plan To Reduce Video Marketing Spending In 2021

COVID-19 has rearranged many business priorities, and digital marketing is no exception. Fewer businesses are investing in video marketing during the age of remote work.

About 1 of every 5 small businesses (19%) plans on reducing spending on video marketing in 2021.

19% of small businesses plan to decrease video marketing spending in 2021.

Experts suggest that 3 factors are reducing the amount of money small businesses spend on video marketing:

  • Production expenses: Video marketing is fading in popularity among small businesses, likely due to the expenses of production. Hiring an agency to produce and edit a video can cost thousands, a cost small businesses may be unwilling to pay during the economic uncertainties of the pandemic
  • Remote coordination during COVID-19: Bob Bentz, president of digital marketing agency Purplegator, believes that video production projects are less popular and more difficult during COVID. The challenges of shooting creative content while social distancing and abiding by other health-focused requirements may be more trouble than it’s worth for small businesses.
  • In-house tech accessibility:  Bentz recommends shooting video marketing content in-house when small businesses are concerned about production expenses and coordination issues. 

    “The best thing about video marketing online is that you don't need a Steven Spielberg production. Just shooting with your smartphone generates acceptable content,” Bentz said. 

    Research from Wave.video reinforces Bentz’s claim, finding that it’s easier for companies to produce videos on their own due to technological accessibility and advancements. This reduces the time and resources necessary for a video production project. 

“The best thing about video marketing online is that you don't need a Steven Spielberg production. Just shooting with your smartphone generates acceptable content.”

Despite the difficulties of creating video content during a pandemic, digital marketing experts feel video is key to a strong digital marketing strategy. Bentz says it’s the perfect time to invest more in video marketing to distinguish your business, especially if competitors are backing off video due to production challenges. 

“It boggles my mind to think why an SMB would reduce video marketing spend in 2021 given that it's much easier to get ranked in a search engine for video,” Bentz said. 

Small businesses can continue to conduct video marketing effectively, even if they have plans to reduce spending in 2021. 

Most Small Businesses Conduct Email Marketing Without Automation Tools

Despite available and accessible technologies, many small businesses conduct email marketing manually. 

Currently, most small businesses that invest in email marketing (64%) execute without a customer relationship management (CRM) or marketing software such as HubSpot or Salesforce.

64% of small businesses don't use marketing software for email marketing efforts

Small businesses may feel that integrating and acclimating to a CRM system requires too many resources. However, digital marketing experts recommend small businesses implement marketing software as soon as possible.

Tina Fleming, brand strategist at digital marketing agency Designzillas, is no exception. She recommends implementing a CRM system and learning about how it can simplify processes.  

“Conducting email marketing without a CRM is a mistake, plain and simple. You are leaving money on the table if you're not using a real CRM,” Fleming said. 

“You are leaving money on the table if you're not using a real CRM.”

Businesses using CRMs found that they offer the following additional benefits:

  • Knowledge of customers 
  • Enhanced segmentation
  • Faster communication 
  • Improved data protection and privacy

CRMs can automate many processes to benefit businesses. Experts think that small businesses should consider using a CRM to conduct email marketing in 2021.

Small Businesses Aren’t Increasing SEO Spending In 2021

Search engine optimization (SEO) is key to organically rising in the ranks on search results pages, but most small businesses don’t plan on increasing their SEO investments in 2021.

Only 1 in 10 small businesses (10%) has plans to spend more on SEO in 2021.

Only 10% of small businesses plan to invest more in SEO in 2021.

Small businesses are not encouraged enough by their current SEO performance to increase related spending in 2021. 

Unlike some of the other digital marketing channels, SEO results can take months to materialize and small companies are at an algorithmic disadvantage when competing against larger brands.

Despite SEO’s drawbacks, Jordan Peagler, owner and partner at MKP Law Group LLP,  became a proponent of SEO over time. Peagler started leaning on SEO at the start of the COVID-19 pandemic when his group needed new ways to connect with clients.   

“We found in 2020 that investing in SEO greatly improved our website traffic and even brought us leads,” said Peagler. “I suggest businesses invest in SEO in some way as it's a great opportunity to earn traffic from potential customers and build lead channels.”

Small businesses may be hesitant to invest more in SEO, but executives attest to its advantages.

Companies Expect SEO to Support Revenue Generation

Visual Objects data found that small businesses that invest in SEO engage digital marketing as a means of supporting revenue generation.

The most direct benefits of SEO are generating traffic and ranking highly in search results pages. These benefits may eventually lead to revenue growth, but SEO is unlikely to boost revenue directly. 

SEO is not perfectly suited to generate revenue. Small businesses may be deterred from investing further in SEO if the value-add is not clear. 

Matt Bertram, CEO and SEO Strategist at EWR Digital, acknowledges the unique challenges of employing an SEO strategy but ultimately recommends that small businesses maintain SEO practices.

“Small businesses are often disappointed with SEO because it doesn’t give them an immediate boost in sales. This results in them relegating SEO to a low priority,” Bertram said. “Small business owners should enlist the services of an SEO expert to help them refine their SEO strategy and take a slow-and-steady approach that will pay dividends in the long run.”

“Small businesses are often disappointed with SEO because it doesn’t give them an immediate boost in sales. This results in them relegating SEO to a low priority.”

Bertram recommends small businesses aiming to accomplish revenue growth through SEO hire an agency to direct strategy and execution. Then, companies may have a better chance of aligning SEO with their business objectives. 

Small Businesses Will Make Strategic Digital Marketing Decisions In 2021

Small businesses will strategically select digital marketing channels and strategies based on their business objectives in 2021. 

Almost all small businesses devote resources to digital marketing efforts. Their digital marketing activity across channels demonstrates the following trends:

  • An official company website is the most popular digital marketing channel among small businesses.
  • Most small businesses feel that social media does the best job of accomplishing business objectives compared to other channels.
  • Video marketing is fading in popularity among small businesses.
  • The majority of small businesses who invest in email marketing don’t use a CRM or marketing software to facilitate. 
  • Small businesses hesitate to increase SEO spending in 2021.   

Small business digital marketing preferences will influence the scope of digital marketing in 2021.

About the Survey

Visual Objects surveyed 500 small business owners and managers at companies in the U.S. with fewer than 500 employees in December 2020.
Fifty-three percent (53%) of respondents are female; 47% are male.
Twenty-six percent (26%) are 18 to 34; 50% are 35 to 54; 24% are 55 or over.
Seven percent (7%) of respondents’ businesses have 1 employee; 36% have 2 to 10 employees; 25% have 11 to 50 employees; 18% have 51 to 250 employees; 15% have 251 to 500 employees.
Respondents are from the South (35%), Northeast (23%), West (22%), and Midwest (20%).

author

Sydney Wess

Content Writer & Editor

Sydney researches and writes about marketing and tech trends for Visual Objects.