One thing we've learned working with small businesses over the years is that most of them view marketing & advertising as an expense, not an investment.
Most of their money goes to what are increasingly just "price-of-entry" touch points:
- Web sites
- Social Media accounts
- Promotional items
- Trade shows & conferences
Are they missing an opportunity?
As much as I would like to say "Yes," our data doesn't support that conclusion: when we compare what companies spend on marketing & advertising to either revenue growth or profitability, we don't see a direct link.
(We do, however, see one between revenue growth and the social media connectedness of company owners and executives, which you can read about here.)
Does that means professional services companies can change their marketing & advertising budgets without impacting revenue?
But then again... maybe not.
Even though we have data on companies going back to 2010, we don't have enough examples over a long enough period of time of companies that dramatically increased or decreased their marketing & advertising budgets — say, by plus or minus 25% or more — to draw any conclusions about causality.
(If you've done that and would like to share your data, shoot us an email.)
What the data does show is that big companies spend more on marketing & advertising than small companies, and that small companies that get bigger tend to spend more than they did when they were smaller.
But is that the chicken or the egg?
Are they spending more because they can? Or because that's what's helping them grow?
We'll let you know.
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