Amazon Ads Research: UK SMBs look to advertising to fuel future growth at home and internationally

New research from Amazon Ads revealed that UK SMBs are experiencing significant benefits from advertising, aiding their expansion both domestically and internationally.

The study indicated that nearly 90% (86%) of SMBs found their current advertising strategies effective in acquiring new customers, while over three-quarters (76%) reported growth within the UK. More than half (54%) noted that advertising had boosted their international business in the past year.

This success in advertising prompted 44% of UK SMBs to increase their advertising budgets over the last year, with 35% maintaining their previous spending levels. The primary reasons for increasing ad spend were to raise awareness of new products or services (48%) and to enhance brand recognition (51%). The top advertising channels included social media (65%), online search (58%), and online display (40%). Additionally, over a quarter (28%) planned to invest in streaming TV advertising in the coming year.

Among the 300 SMBs surveyed, nearly three-quarters (71%) were currently investing in advertising, while 29% were not spending on advertising at all.

Despite the success enjoyed by some, not all SMBs feel they need advertising to grow their business

A significant 29% of UK SMBs are not investing in any form of advertising. The main reasons cited were high costs (42%) and a lack of return on previous investments (38%).

For those SMBs that are advertising, challenges persist. Thirty percent identified their biggest hurdle as determining the best focus for their advertising budgets to meet their goals. Over a quarter (26%) struggled with measuring campaign performance, while an equal number (26%) found creating compelling content to be their greatest challenge.

“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

UK SMBs hold a strong belief in technology's potential to amplify their advertising efforts and address current challenges. Nearly half (45%) of UK-based SMBs expressed confidence that AI will enhance their advertising campaign performance. Consequently, nearly one in five (18%) are actively training their teams to leverage AI technology for advertising.

“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."