28% SMBs don’t invest in ads; Amazon Ads says it is here to help mitigate challenges

A look at the universal nature of SMB advertisers, their challenges, and how Amazon Ads is helping them navigate it.

With the advent of digital marketing, the number of businesses that can invest in advertising has exponentially increased. According to Kapil Sharma, director of growth customer sales at Amazon Ads India, small and medium businesses (SMBs) are leveraging both digital and traditional channels for growth.

Sharma was speaking about the launch of a recent study by Amazon Ads on SMB advertising, which surveyed 4,138 decision-makers across geographies like the US, UK, and India. The research aimed to understand SMB attitudes towards online and traditional advertising.

Key findings from the study show that SMBs increasingly use advertising to drive domestic and international growth. Notably, 85% of SMB advertisers use advertising to enhance growth and reach customers, with 69% achieving growth beyond their home markets.

The study also reveals that 56% of SMBs have increased their advertising budgets due to successful customer acquisition and new product launches, signalling a shift towards more aggressive advertising approaches.

Challenges and opportunities

According to Sharma, despite these advancements, some SMBs hesitate to invest in advertising due to concerns about costs and measuring ad effectiveness. “About 28% of SMBs struggle with budget allocation, while 31% find it challenging to track and optimise the effectiveness of their campaigns. Furthermore, 36% face difficulties in creating compelling ad campaigns that reach the right audience,” he says.

He further mentions that Amazon Ads is addressing these challenges by offering solutions designed to help SMBs reach relevant audiences and achieve their advertising objectives more efficiently.

“As a platform, we are customer-obsessed and working towards addressing these challenges by incorporating their needs into our solutions. For example, Amazon has been launching self-service ad solutions that lower the cost of entry. We are also developing solutions to optimise campaigns and reach relevant audiences.”

“At the same time, we understand that some SMBs need education on how to use these advertising solutions. We are launching free learning courses and certifications that they can avail. Additionally, we conduct on-demand webinars and events to educate SMBs about the power of advertising,” he adds.

Pallavi Utagi, founder and CEO of Superbottoms - a baby diaper alternative brand that is utilising Amazon ads says, they are trying to create a new category and Amazon ads has helped them massively with product discovery and reaching out to relevant consumers.

She says they advertise not only on Amazon platforms but other places as well. "Amazon ads tool I find is very sophisticated in helping us really figure out what keywords is the customer looking for. The platform keeps getting better day by day. I just feel that, compared to the other platforms, Amazon ads is a much more targeted platform and therefore the return on ad investment is much higher," she adds.

Other notable findings from the report

According to the Amazon Ads study, 72% of small and medium-sized businesses in India currently invest in advertising, with 85% saying it successfully helps them acquire new customers.

More than two-thirds of Indian SMBs (69%) also reported success in using advertising to grow their business internationally. However, 28% of Indian SMBs do not invest in advertising at all, citing high costs and a lack of return on previous investments.

Over half (56%) of Indian SMBs increased their advertising spend in the past year, while 22% maintained their budget year-on-year. The primary motivations for this increase were to raise awareness of new products or services (42%) and improve brand awareness (50%). Looking ahead, more than a third (36%) plan to spend on streaming TV advertising in the next 12 months.

Navigating a cookie-less world

Sharma further mentions that Amazon Ads is focusing on developing AI and machine learning-based models to adapt to a cookie-less world. For instance, their innovative 'Ad Relevance' solution, unveiled at Cannes Lions, utilises billions of shopping and streaming signals to serve relevant ads in real-time, enhancing the overall customer experience.

He also states that they offer not only programmatic solutions but also video-based solutions. They have mini-TV ads that advertisers can use to reach relevant audiences, sponsor brand videos, and sponsor display videos, enabling SMBs to create relevant content and educate audiences about their brands effectively.