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Franchises Setting Aside More Dollars For Digital Advertising

Written by Ken Gaebler
Published: 4/22/2015

In response to the digital preferences of today's consumers, small-to-medium sized franchises are allocating more of their ad budgets toward digital media.

According to a survey conducted by local market research firm BIA/Kelsey, franchises are planning to put at least 43 percent of their total ad budgets toward digital and online media throughout 2015. In 2014, the average SMB franchise spent $87,165 on advertising and promotion in 2014, which was a 52 percent increase from 2013. From that budget, 39.1 percent was used for digital media.

Franchising Industry Embraces Online Advertising

"This is our third year looking at franchises as a separate group within our SMB survey and they're really notable and distinctive," said Steve Marshall, director of research at BIA/Kelsey. "They're almost on the cutting edge in the new wave of highly targeted digital media and heads and shoulders above non-franchise SMBs in use of these mediums."

Franchises Embracing Social Media

The survey revealed that more franchises are exploring social media platforms like Facebook and Twitter to reach their consumers. About 56.5 percent of franchise respondents said they have set up a free Facebook page, while 33.9 percent reported that they used a Facebook ad. Facebook ads are the 4th most-commonly used platform by franchise SMBs.

Other social media numbers broke down as follows:

  • 26.4 percent of franchise SMBs use Twitter
  • 24.6 percent have used Twitter ads
  • 15.7 percent used Instagram in their campaigns
  • 11.5 percent have tried Pinterest as part of their marketing strategies

Ad Agencies Play Important Role With Franchises

As franchises seek a measurable Return on Investment (ROI), many are starting to partnering with ad agencies to strategize on digital spending. Almost 50 percent of franchise SMBs have hired a digital or ad agency for a period of at least two years, according to Marshall. He also said that this number is "way above other SMBs."

It's clear that digital advertising is playing a larger role in franchise success. But taking the time to develop a strong ad campaign is one of the secrets to franchising success. If you're an aspiring small business owner looking for franchise opportunities, it's important to factor the cost of developing and executing a digital strategy into your ownership strategy and budget forecasts.

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