New research commissioned by Amazon Ads has shown 88% of Australian SMBs choosing to advertise have successfully acquired new customers, and 33% are increased their advertising spend over the past year as a result. Yet one in three aren't advertising at all.

The new report looked to shed light on the impact of advertising on Australian Small and Medium-sized Businesses (SMBs). It found increasing advertising spend has been driven by the need to raise awareness of new products/services (47%) and improve overall brand awareness (45%). The research also highlighted 71% of SMBs who invest in advertising have seen successful local expansion, and 54% have expanded internationally.

The most popular channels for SMB ad spend are social media advertising (70%), online search (63%), and online display (44%). Nearly one in four (24%) of surveyed SMBs plan to spend on streaming TV advertising in the next 12 months.

Despite the success of advertising, 32% of Australian SMBs do not currently spend on any form of advertising, with 44% citing expense and 38% citing lack of return on previous investments as reasons. Among SMBs that do advertise, challenges include lack of budget (32%), lack of time and resources (29%), and uncertainty about where to focus their advertising budget (28%).

"We see many small and medium businesses testing the impact of advertising as part of their overall growth strategy and deciding if advertising provides the right return on investment to help them meet their business goals," said Kasey Jamison, Head of Endemic Advertising, Amazon Ads, Australia and New Zealand.

The research also revealed 46% of Australian SMBs believe Artificial Intelligence (AI) will improve the performance of their advertising campaigns, and 19% are currently training their teams on how to use AI technology for advertising purposes.

"We aim to make advertising as simple as possible for any small business, with easy-to-use tools and resources that offer a low cost of entry, closed-loop measurement, and the ability to introduce their products to customers at scale," added Jamison.

The research was conducted by market research agency, Opinium, surveying 4,138 B2C marketing decision makers at SMBs globally, including 238 in Australia, between 29 February 2024 - 20 March 2024.