Mobile Ad Spending Among Small Businesses Set to Rise

Small businesses are looking to increase mobile advertising budgets but want sophisticated metrics to boost ROI.

Small to misize businesses are gearing up to throw more of their advertising budgets into the mobile space, according to a survey conducted by Borrell Associates on behalf of Pontiflex, the company behind AdLeads, a mobile signup ad platform. The survey found 72 percent of SMBs surveyed said they would increase or keep the same mobile ad spend in the next 12 months, and of those planning to increase spending, 65 percent of SMBs said they expect to increase those budgets by up to 30 percent in the next 12 months.

While small businesses are focusing more on mobile advertising, the survey also indicated they are looking for more sophisticated platforms to track the impact mobile ads are having. More than three-quarters (77 percent) of businesses surveyed said that the ability to analyze campaign performance is somewhat important or very important, while 75 percent of SMBs in the survey say that the ability to optimize campaigns in real time is very important or somewhat important.

"Mobile advertising is growing, but hasn't kept pace with the rapid adoption of mobile devices," Zephrin Lasker, CEO and co-founder of Pontiflex, said in a prepared statement. "This survey shows that SMBs need real returns from mobile advertising, and CPC and CPM pricing models are just not working for them. SMBs want to use mobile ads to grow their businesses. To help them do so, the industry must innovate and try new things."

With limited budgets, SMBs are looking to gain the maximum impact from mobile ad spending, with a focus on localized targeting: 75 percent of responding companies said that the ability to target ads by location was "very important" or "somewhat important" in a mobile advertising campaign and more SMBs (26 percent) would prefer to pay for signups (the email addresses and social networking handles of consumers interested in their businesses) as compared to clicks (19 percent) or impressions (6 percent).

Survey results also suggest the trend toward mobile spending is set to continue, with nearly half (49 percent) of the more than 1,300 SMBs surveyed indicating that have done mobile advertising in the past, noting a higher return on investment (ROI) would prompt them to increase ad spend even further. Of the SMBs that plan to increase ad spend, 32 percent of small businesses surveyed said they plan to increase their mobile ad spend by 11-20 percent over the next 12 months, and 46 percent of businesses surveyed said they would be "very interested" or "somewhat interested" in a self-service solution for mobile ads.