2020 Small Business Marketing Statistics

There are more than 30 million small businesses in the U.S. competing for success in different industries. 

Businesses will explore new marketing channels to impress customers while evaluating past strategies to see what worked. 

Visual Objects surveyed 500 small business owners in the U.S. to learn:

• What marketing channels worked and didn’t work for them in 2019
• What marketing channels they plan to use in 2020

We define small businesses as having limited revenue and between 1 and 500 employees, which matches the Small Business Administration’s definition of small business. 

We found that small business owners are not prioritizing search engine optimization (SEO) and are instead increasing their investment in social media campaigns and websites. 

Top Findings: Small Business Marketing Statistics and Trends 

• Fewer than one-quarter of small businesses (21%) plan to use SEO more in 2020. Only 5% of small businesses say SEO was their most successful tactic in 2019, which may influence their choice to not focus on SEO in the future. 

• Nearly three-fourths (70%) of small businesses plan to increase their social media investment in 2020 to reach a wider audience, despite social media’s low conversion rate. 

• Surprisingly, nearly one-third of small businesses (29%) plan to begin using a website for the first time in 2020. All businesses should have a website.

• One-quarter of small businesses (25%) plan to begin using digital marketing in 2020. Even low-effort digital marketing can help small businesses gain a competitive edge.

• Small businesses will look for new ways to reach customers. Almost a quarter of small businesses (22%) plan to market with an app to better connect with customers and 8% plan to start using augmented/virtual reality.  

5 Small Business Marketing Statistics: 

Small businesses search for new ways to gain a competitive edge over other companies. Small businesses are especially interested in exploring the benefits and disadvantages of SEO, social media, website, digital marketing, and mobile app options. 

Small businesses are not focusing on enhancing their SEO strategies. Only 21% of small businesses plan to use SEO more in 2020, which could indicate a loss in customers. Instead, businesses are focusing on their social media tactics. Almost three-quarters of small businesses (70%) plan to increase their social media investment. Businesses want to be more engaged and in-touch with their social media audience even though social media doesn't usually result in high conversion rates. 

Meanwhile, almost a third of small businesses (29%) are just beginning to have an online presence. Twenty-nine percent of small businesses plan to begin using a website in 2020 as they try to connect with customers digitally. Small businesses gain increased exposure with a website and it is an important channel to increase a customer base. One-quarter of small businesses (25%) are also hoping to start using digital marketing, which can help businesses stand out amongst competitors. 

Additionally, 22% of small businesses are looking to invest in mobile apps. Mobile apps can provide an additional channel for companies to reach clients.  Mobile apps are accessible anywhere and at anytime, which makes them a useful tool for growing businesses.  

Small businesses must decide which channels are best to pursue for their own business success. 

Less Than a Quarter of Small Businesses Will Increase Investment in SEO

Small businesses do not focus enough attention on SEO and could be losing valuable customers. 

Only 21% of businesses plan to increase their SEO investment in 2020. This was the second-lowest marketing channel ranked in the survey. Only augmented/virtual reality ranked lower. 

More than half of internet users (61%) will research a product online before purchasing it. 

A business must rank highly in search engines to appear to most users, though. Google’s first five search results receive almost 70% of people’s clicks, while the second page of Google search only receives 5% of clicks.
 
It can be hard for small businesses to rank as top choices for high-value keywords. Only 5% of small businesses say SEO was their most successful strategy for reaching business goals. Hiring an SEO company can help transform this statistic, though.

Small businesses may understand the significance of SEO but do not see the results from their efforts immediately. It can be hard to grow SEO value for your site in a short period of time and it may take months to see results. 

Local SEO Can Increase Small Business Web Traffic and Sales 

Small businesses should take advantage of local SEO results to increase success. 

A small digital marketing agency may not rank for a general keyword such as “digital marketing agency." However, it can better compete for localized results, such as “Kansas City digital marketing agency.” 

Google understands the value of having nearby businesses come up first in results. People who are searching for a clothing store or restaurant near want a convenient place for them to shop close to their location.

Businesses can take advantage of this location bias by mentioning their city, county, and region naturally throughout their websites. Listing your business on online local directories can also help customers find your location. 

Local results are more likely to convert into sales, so small businesses should prioritize optimizing for local searches. 

Small Businesses Rely Heavily on Social Media Despite Low Conversion Rates 

Social media has a reputation of leading to great success, but actual conversion rates are low. 

More than a third of businesses (37%) said social media was the most successful channel in achieving their business goals. In addition, 70% of small businesses plan to increase their investment in social media in 2020 – the most popular marketing channel by 10%. 

Small businesses should be wary of the effectiveness of social media for direct sales conversions, though.  

Why, then, do small businesses continue to invest in social media marketing?

Small businesses plan to increase spending on social media because it:

• Grows brand awareness
• Builds relationships with customers

Creating a social media campaign that stands out among competitors, captures users’ attention, and conveys your brand message can lead to more loyal customers. You can then nurture these customers to more sales using other marketing channels.

Michael Alexis, owner and director of marketing at Museum Hack, a museum touring company, said thinking outside of the box helped his business create a successful social media campaign:

“Our most successful social media campaign was a museum-inspired ‘March Madness,’” Alexis said. “Each day we would post two competing images [of famous paintings] on Facebook and let followers vote with a like or heart. The result? We saw a massive increase in engagement and followers for our page.”

Still, social media campaigns can be challenging to execute, especially when businesses don’t know their target audiences. 

Mostafa Yasser, a marketing executive at Stacks Market, a mobile app development company and web development company, explained how one of his early social media campaigns failed because Stacks Market didn’t understand the customers it was advertising to. 

“After developing our product…We started splitting our budget across different countries, and our message was just about how great our new product features are,” Yasser said. “We didn’t focus on our customers or on their pain points. We just focused all our messaging on our product. This campaign failed horribly, with zero conversions.”

“We didn’t focus on our customers or on their pain points. We just focused all our messaging on our product. This campaign failed horribly, with zero conversions.”

Small businesses must create targeted and unique social media campaigns to stand out.

Social media can create brand awareness but can be less effective at increasing direct sales.

Small Businesses Want to Improve Their Websites 

Websites are the starting point for many customers in the buyer’s journey. Businesses must have a reliable and informative website as e-commerce continues to grow. 

Surprisingly, however, many small businesses aren’t satisfied with their online presence – or don’t have a presence at all.

Nearly one-third of small businesses (29%) plan to start using a website in 2020. Another 29% say their website is the marketing channel that needs the most improvement in 2020.

Almost all people (86%) rely on the internet to find local businesses. 

“Your website should be your number one salesperson, 365 days a year, 24/7,” said Lauren Williams, founder of Harmony HR Experts, an organizational development agency. “Everyone buys things on the internet all the time. Even if your business is providing a service, you must have a way to sell it on the internet.”

Without a website, a small business may seem to lack credibility or be hard to find by potential customers. Furthermore, a website can promote your goods or services even when your small business is “closed.” 

Small businesses that do not invest in a website could be missing out on potential customers. 

One-Fourth of Small Businesses Plan to Start Using Digital Marketing in 2020

While digital marketing has been a buzzword since the ’90s, not all small businesses have taken advantage of it. 

A quarter of small businesses (25%) plan to begin using digital marketing in 2020. These businesses have missed out on potential sales up to this point. 

Businesses can grow their brand awareness, connect with customers, and improve their reputation through good digital marketing practices. For example, small businesses can use email marketing to promote their services by launching campaigns that regularly alert clients to new updates about their products. 

Companies that use digital marketing have 2.8 times better revenue growth expectancy than businesses that don’t. Small businesses that do not implement a digital marketing strategy are at a financial disadvantage.

Digital marketing does not require a big budget because people can create organic content without spending money on ads. By writing blogs or sending articles, businesses can provide unique value for potential customers inexpensively. 

Small businesses must recognize how digital marketing can benefit them or face losing customers. 

Nearly One-Quarter of Small Businesses Plan to Market with Mobile Apps in 2020

Mobile apps provide small businesses with an easily accessible channel to reach and market to customers. 

Almost a quarter of small businesses (22%) want to begin marketing through mobile apps in 2020. 

Considering 3.5 billion people own a smartphone worldwide, mobile apps offer businesses an opportunity to reach a massive audience. 

Still, small businesses should not create a mobile app just to have it. Creating a high-quality mobile app is an expensive investment.

Businesses should consider the reasons to invest in a mobile app and how that content will be different than the content on their website. 

Small Businesses Undervalue SEO and Digital Marketing While Relying on Social Media 

Small businesses search for new ways to market their services but forget more long-term solutions. 

Only 21% of small businesses are planning to increase their SEO investment, which means it will be more difficult for them to rank higher on Google. 

Meanwhile, 70% of small businesses want to increase their social media spending. Social media may grow customer engagement but can be harder to translate to sales, especially without the support of an experienced social media consultant.

More than a quarter of small business owners (29%) plan to begin using a website and another 29% plan on improving their website in 2020 so that services are easily understood and products easily accessible. A website is key to a strong online presence. 

While digital marketing remains a key way to grow your audience on a budget, 25% of small businesses are only planning to begin using it in 2020. 

Finally, 22% of small businesses want to create an app but these businesses should first figure out what unique value a mobile app gives their clients. 

Small businesses divide their budget to invest in multiple marketing channels but may need to narrow their focus to truly succeed at one strategy.   

About the Survey

Visual Object surveyed 500 small business owners in the U.S.