While online marketing spending has increased nationwide, small businesses fail to leverage the targeting opportunities presented by localized online ads.

Traditional advertising channels, such as billboards, television and periodicals, remain the most prominent mediums for paid advertisements today. However, as more customers move online, an increasing number of businesses have followed suit.

A study conducted by the Boston Consulting Group reveals that:

  • 15% of total advertising dollars are spent towards national online marketing campaigns.
  • 14% of total advertising dollars are spent towards localized online marketing campaigns.

However, small business appears to be lagging behind in these efforts:

  • Only 3% of small businesses’ advertising dollars are directed towards online marketing campaigns.

This means that small businesses spend about 5x less on online advertising than mid-sized and larger companies do on both a national and local level.

This number may seem surprising, considering that many small businesses do in fact promote themselves online through social media, email marketing and their websites (which is where the majority of small businesses’ digital marketing dollars go). However when it comes to spending money on actual advertising, small businesses are almost exclusively turning to offline channels.

This is especially troublesome when compared to the percentage of online advertisement dollars spent on localized online ads—14%. This means that larger companies are spending significantly more than small businesses per capita on targeting ads towards specific communities and local customers who are critical to the success of mom and pop businesses.

Ready to start increasing your online ad focus? Learn how to run a successful and localized Google AdWords campaign, or create a Facebook Ad that will draw customers.

Source: The Boston Consulting Group (via Yelp)