75% of Canadian small and medium sized businesses (SMB) currently invest in advertising and of those, 84% say it is successfully helping them acquire new Canadian customers Nearly half of Canadian SMBs (45%) also reported success in using advertising to help them grow their business internationally25% of SMBs in Canada do not invest in advertising at all, citing high costs and a lack of return on previous investments
Research conducted among marketing decision makers at 300 business to consumer (B2C) Canadian SMBsregarding their attitudes towards advertising across online and offline channels
New research from Amazon Ads shows Canadian SMBs are benefitting from the positive impact of advertising as they look to expand both at home and internationally. The study found that over eight in 10 (84%) said that their current advertising strategy is successful in acquiring new customers while almost three quarters (70%) said it had helped them to expand their business in Canada. Almost half (45%) said that advertising had helped them grow their business internationally within the last 12 months.
This confidence in advertising led more than two in five (42%) Canadian SMBs to increase their spend on advertising during the past year, while roughly the same (43%) kept their budget the same year-on-year. The most common motivations for this increase in spend include to drive awareness of a new product or service (50%) or to improve customer awareness of their brand (43%). The most popular channels for SMB spend in advertising include social media advertising (78%), followed by online search (63%) and online display (42%). Looking ahead, more than a quarter (23%) of those sampled said they planned to spend on streaming TV advertising during the next 12 months.
Of the 300 Canadian SMBs sampled, three quarters (75%) said they currently spend on advertising, compared to 25% that do not spend advertising at all.
Despite the success enjoyed by some, not all SMBs feel they need advertising to grow their business
25% of Canadian SMBs do not currently spend on any kind of advertising. When asked why they are not currently advertising, the most common response was that they have not seen a return on previous investments (ROI) (36%), while others cited that it is too expensive (28%).
Even among SMBs that are currently spending on advertising, challenges remain. Three in 10 (30%) said that their biggest challenge with advertising is knowing where to focus their advertising budgets to achieve their goals, while more than a quarter (28%) said they were unsure how to measure the performance of campaigns. A similar number (29%) said creating compelling content was the greatest challenge their business faced when it came to advertising successfully.
“We see many SMBs testing the impact of advertising as part of their overall growth strategy and deciding if advertising provides the right return on investment to help them meet their business goals,” said Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads. “Our aim is to make advertising as simple as possible for any SMB by removing the barriers, through a low cost of entry, closed-loop measurement and the ability to surface their products to customers at scale.”
Looking to the future
There is a clear belief in the power of technology to enhance the impact of advertising among Canadian SMBs and to help them solve existing problems, as more than half (51%) of Canadian-based SMBs said they believe AI will improve the performance of their advertising campaigns. As a result, almost one in five (17%) of those sampled are currently training their teams on how to use AI technology for advertising purposes.
“AI and machine learning have created a range of new possibilities for advertisers and SMBs are already seizing this opportunity,” added Ludovic de Valon, Director, Global SMB Marketing, Amazon Ads. “These technologies are democratizing the ability to advertise at scale and enabling small businesses to create compelling content that reaches relevant audiences in the right place and time.”
Methodology
Amazon Ads worked with market research agency, Opinium, to survey 4,138 B2C marketing decision makers at SMBs in the UK, China, France, Germany, India, Italy, Japan, MENA, Spain, Brazil, Mexico, USA, Canada, and Australia. The sample is nationally representative, not a sample of Amazon sellers. The data was collected between 29 February 2024 – 20 March 2024.
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