Franchise SMBs to Spend Nearly Half of Annual Ad Budget on Digital

Findings from the new report, “Franchise SMBS – Advertising & Marketing Trends,” will be highlighted at the BIA/Kelsey NATIONAL conference, March 25-27, in Dallas

CHANTILLY, Va. (Feb. 23, 2015) – Franchises are upping their spending on advertising and promotion and allocating a growing share of their ad budgets to digital media, according to a new report from BIA/Kelsey titled, “Franchise SMBs – Advertising & Marketing Trends.” The report is based on data from BIA/Kelsey’s Local Commerce Monitor™, an ongoing study of the advertising behaviors of small and medium-sized businesses (SMBs).

According to the report, on average, franchise SMBs spent $87,165 on advertising and promotion during the 12 months prior to the survey, up from $57,072 the previous year. On average, the franchise SMBs surveyed spent 39.1 percent of their total ad budget on digital media during the same 12-month period. They reported they planned to increase their digital spend to 42.9 percent of their total ad budget during the 12 months following the survey, compared with 33.8 percent for SMBs overall.

“Franchises are one of the most distinctive SMB segments,” said Steve Marshall, director of research, BIA/Kelsey. “In almost every metric, franchises act differently from the overall SMB sample. In general, franchises are taking a tighter and more disciplined approach to their customer relationships. They’re using more marketing tools and platforms, loyalty programs and social media.”

Indeed, the franchise SMBs surveyed demonstrate a remarkable willingness to experiment with digital media and platforms:

  • Social: 26.4% use Twitter; 24.6% use Twitter ads; 15.7% use Instagram; 11.5% use Pinterest
  • Mobile: 22.6% use mobile banner or display ads; 21.6% use mobile deals; 19.3% use text messaging
  • Online/Video: 23.6% use online deals; 22.6% use website video; 16.3% use video banner or display ads.

Franchises Value Agency Relationships

Many franchise SMBs work with digital or advertising agencies, with 49.3 percent reporting they have worked with an agency for two years or more. Among those that work with an agency, 87.7 percent are either “very satisfied” or “extremely satisfied.” The most widely used channel by franchise SMBs for purchasing online advertising is their advertising/digital agency (36.5 percent), followed by TV stations (28.9 percent), self serve without assistance (28.2 percent), self serve with assistance (27.9 percent) and newspapers (26.9 percent).

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Franchise Leaders at BIA/Kelsey NATIONAL

Findings from the new report, “Franchise SMBS – Advertising & Marketing Trends,” will be highlighted at the BIA/Kelsey NATIONAL conference, March 25-27, in Dallas. This event is focused on the local marketing strategies of national brands, franchises and multi-location businesses. The program will feature insights from more than 50 speakers, including franchise leaders Mark Belanger, VP, Franchise, El Pollo Loco; Rob Crigler, VP, Digital Marketing, Rooms To Go; Elnora Cunningham, Director, Local Search, U-Haul International; Keith Dailey, Director of Internet Marketing, UniGroup (United Van Lines); Ormando Gomez, CFO, All My Sons Moving & Storage; and Philipp von Holtzendorff-Fehling, VP and CMO, ServiceMaster/American Home Shield.

For more information on the conference, including the agenda, speakers and online registration, visit http://www.biakelsey.com/NATIONAL.

Get the Report: “Franchise SMBS – Advertising & Marketing Trends”

The Local Commerce Monitor report, “Franchise SMBs – Advertising & Marketing Trends” is available for purchase—email sales@biakelsey.com for information. BIA/Kelsey advisory service clients can access the report in the client portal.

Those who would benefit from reading this report include: local media companies selling digital services to franchises; senior leaders evaluating opportunities in the SMB marketplace; and franchise organizations looking to support their franchisees in advertising and marketing.

About Local Commerce Monitor™

Local Commerce Monitor (LCM) is BIA/Kelsey’s ongoing tracking survey of small and medium-sized businesses conducted online with research partner Ipsos. The survey measures where SMBs are spending their advertising and promotional budgets and how their media usage and spending habits are evolving.

For this study, SMB is defined as a business having from 1 to 99 employees. Local Commerce Monitor draws its sample of business respondents from a mix of nationally scoped MSAs, primarily based on first- and second-tier markets. Local Commerce Monitor Wave 18 was conducted in July 2014 via an online survey of 546 SMBs. The data regarding franchises is based on the responses of 76 respondents (13.9 percent of the full LCM sample of SMBs) who self-identified as a “franchise or licensee of a national company.”

The LCM Wave 18 findings have been weighted to reflect the incidence of SMBs by size bracket, according to the SMB size bracket data provided by the U.S. Bureau of the Census.

About BIA/Kelsey

BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey). Stay connected by subscribing to the firm’s bi-monthly newsletter.

For more information contact:

Eileen Pacheco
For BIA/Kelsey
(508) 888-7478
eileen@tango-group.com