Advertising is a fundamental aspect of business management, as no company would survive without some form of advertising, regardless of its size or location. The digital era we live in has brought about a number of significant changes to the world of corporate advertising, as marketers are increasingly moving away from traditional advertising methods and give preference to digital options. In this article we take a detailed look at how UK-based small and medium-sized companies advertise online and at the digital strategies that they use to sell their products and services. 

SMEs and online advertising: the latest general trends

It is evident that when it comes to online advertising, British companies have come a long way over the past few years. A 2011 study carried out by the Internet Advertising Bureau found that only three years ago, companies devoted £1 out of every £4 to their online advertising budget. Today, this figure is close to 30 per cent of the average advertising budget. The most recent data show that there are still many small and medium-sized companies that spend considerably less than 25 per cent of their marketing budget on online advertising, but far from being a negative point, this figure itself is a good indicator of how quickly digital advertising is taking over traditional advertising methods.

The unstoppable rise of mobile advertising

PricewaterhouseCoopers and the Internet Advertising Bureau have published the latest research findings on how small and medium-sized enterprises in the UK are using online advertising. The report dates from April 2014 and examines the strategies used by British companies during the previous year. One of the most significant trends evident in this report involves the unstoppable rise of mobile advertising, as expenditure in this area has grown by 50 per cent and now exceeds the £1 billion mark. The report also indicates that mobile advertising currently accounts for more than 35 per cent of all digital and social media advertising. The most remarkable growth has been experienced in the tablet-optimised advertising sub-sector, which grew by an astonishing 400 per cent during 2013. British SMEs went from spending £6.8 million in tablet advertising during 2012 to investing nearly £35 million in 2013.

Popular online advertising strategies

Online advertising encompasses various strategies and techniques, so where exactly is all the money going? According to the report mentioned in the previous paragraph, small and medium-sized enterprises in the UK seem to favour paid search advertising over other online strategies. Approximately 59 per cent of all digital advertising corresponds to sponsored listings and to pay-per-click marketing, such as Google AdWords.

Next is display advertising, which currently accounts for 30 per cent of the total expenditure. During 2013, UK companies spent £1.8 million on online display adverts, and many of these companies were SMEs. In fact, display advertising is the fastest-growing online advertising method, as this sector has experienced year-on-year growth levels of 23 per cent. The experts affirm that this trend is here to stay and that the online display advertising market will experience drastic growth during the next few years, especially as real-time bidding strategies continue to develop and become more effective.

Banner ads remain a popular form of online advertising for British SMEs. They actually constitute 44 per cent of all display advertising, and they are set to grow as new methods (such as digital video banners or banners in social media) become increasingly accepted. Lastly, there is online classified advertising, which accounts for 14 per cent of the total spending, and which is mainly used by SMEs in the automotive and recruitment industries.