Sortlist has published several articles on how the COVID-19 pandemic is impacting the marketing sector based on our own industry data. But this time we decided to turn things. We asked almost 500 owners and general managers of small and medium-sized businesses (SMB or SMBs) across Europe what changes they are seeing regarding their SMB strategies and budgets for the year 2021.

Our main findings:

  • Marketing budgets are impacted differently across Europe, with both significant increases and decreases 
  • The pandemic is still dictating what marketing competencies are in high demand
  • Companies find innovative ways to make the most of their capabilities

Table of contents

The pandemic’s impact on 2021 marketing budgets

The pandemic has made some marketing channels inevitable and influenced the digitalisation strategies of many SMBs. In addition, our latest survey revealed a significant impact on marketing budgets. 

Across Sortlist’s core markets – this includes Germany, France, Belgium, Spain, and the Netherlands – almost every second surveyed SMB (47.0 %) stated that their marketing budgets for the year 2021 will be smaller compared to 2020.

Nevertheless, one out of four business owners (23.7 %) said their marketing budgets increased for the year 2021.

An additional 19.7 % said that no final budget decision had been taken at the time of the survey. 7.4 % said their budget has remained unchanged.

Taking a closer look at the situation in the different European countries, it becomes clear that COVID-19 has been shaping marketing investments quite differently.

The Netherlands

According to our survey, one-third of SMBs in the Netherlands (30.0 %) will see their marketing budgets grow in the year 2021. Most budget increases will be in the range of 11-25 %.

This means that 25.0 % of surveyed companies plan to spend between 10.000 and 100.000 € on marketing in the current year. Another quarter aims to invest between 5.000 and 10.000 €.

The Netherlands has the highest rate of SMBs with a growing marketing budget and the lowest rate of reduced investments across the surveyed countries.

39.0 % of SMB owners stated they’ll invest less. Another 23.0 % hadn’t taken a decision yet when surveyed. 

Spain

Spain is coming in second in terms of growing marketing budgets. 20.8 % of SMB owners said their investments in the area will increase.

Most increases will be between 6 and 25 %. Hence, most SMB marketing budgets will amount to around 1.000 – 10.000 €, with one-fifth of them going up to 100.000 €.

Spain is close to the EU-average when it comes to steady or shrinking budgets. 44.0 % of business owners said their marketing budget will decrease and 7.0 % of marketing budgets will stay unchanged.

20.0 % hadn’t taken a decision at the time of the survey.

Germany

One out of four German SMBs will have a growing marketing budget at their hands in the current year.

Planned marketing investments for the coming year are on average higher in Germany than in Spain. Almost one-quarter of German SMBs will spend between 10.000 and 100.000 € on marketing in the coming year.

German entrepreneurs will see together with Dutch SMB owners the fewest marketing budget cuts (39.0 %). Investment decreases and increases will mainly be between 6 and 25 %.

Belgium

Roughly one-fourth of Belgian SMBs (22.4 %) will see their marketing investments grow in 2021. This means that over a quarter of SMBs will have a marketing budget of around 1.000 – 5.000 € at their disposal, with another quarter going up to 100.000 €.

However, more than half of the surveyed business owners and general managers (53.1 %) said their marketing budgets are shrinking. Another 4.1 % said their budgets will remain the same and 19.4 % hadn’t taken a decision yet.

Most decreases will remain in the area of up to 25 %, increases will mostly fall into the range of 6 – 25 %. 

France

France has the lowest rate of increased budgets and the highest rate of cuts, according to our survey. 14.0 % of French SMBs will see their marketing budgets grow in 2021.

In addition, 12.0 % of annual marketing investments will stay unchanged and another 12.0 % weren’t yet decided when the survey was conducted.

However, 60.0% of French entrepreneurs said their marketing budgets will shrink in the current year.

This adds up to one-fifth of budgets falling into the range of 1.000 – 5.000 € and another fifth of 5.000 to 10.000 €.

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Where Europe’s SMBs will invest in 2021

Next to how their budgets are impacted, we asked almost 500 SMB owners where they’ll invest their marketing money in 2021. The results show that digital communication channels will remain a big priority.

Across the surveyed countries, the top three marketing channels in the year 2021 will be social media, company websites, and email marketing.

Digital strategy, website creation, and social media will hence be the top 3 in-demand expertises in 2021.

Has 2020 killed traditional advertising? In an interview, according to Karin Brenner, Lead Advertising Manager at Stylight “The COVID-19 pandemic obviously had a massive impact on the way companies have approached advertising in 2020: a big drop in advertising spending can be seen – especially at the beginning of the crisis. Billboards and cinema ads have of course become obsolete for most of 2020, but I think that the shift was actually more on a product level than on a media level: Consumers’ daily routines, preferences and behaviors have shifted so much that their media consumption could not stay unimpacted.”

The Netherlands

Dutch entrepreneurs offer little surprise when it comes to the top 3 marketing channels for their SMBs in 2021. Social media followed by the business’ website and email marketing lead the ranking.

The expertises in which business owners plan to invest in 2021 differ slightly. Digital strategy and online advertising lead the poll followed by social media and traditional advertising.

One outstanding example of smart investments in social media advertising is the ongoing campaign by the Dutch agency Digital Movers with a budget of 25,000 €. Thanks to the right microtargeting, they are currently gathering registrations for a 3-day extreme amateur bike race from a well-selected audience.

Spain

Social media and the business’ website are the top communication channels in Spain. Email marketing comes in third, closely followed by new digital initiatives such as webinars or virtual events.

This is also reflected in the marketing expertise which will be most in-demand in Spain in 2021. Digital strategy and online advertising are in the lead, followed by website and e-commerce creation as well as social media.

An example that there aren’t any limits when it comes to moving sales online is the recently implemented project by Brandwash Agency. The Madrid-based agency set up a new website and e-commerce (budget: 2,500 €) for ONLINE BUTCHER, a digital business that is delivering quality meat to Spanish doorsteps.

Online Butcher Website
Source: Screenshot onlinebutcher.es

Germany

German small and medium business owners favour the same top three marketing channels in 2021, with social media, the company website, and email marketing leading the poll.

In terms of expertise, digital strategy and online advertising are the most in-demand, followed by website and e-commerce creation. The third place is a neck-and-neck race between social media, brand, and positioning as well as traditional advertising.

The websites recently created by the German agencies FORMLOS Berlin and chaerry showcase how much user experiences can differ based on the needs and expectations of the users.

FORMLOS Berlin created a barrier-free website for the NGO Handicap international for a budget of 25,000 € which allows users with different abilities to access the same information.

Chaerry Digitalagentur implemented an entirely different user experience for a large-scale school project in Berlin. The website for kietz:story is meant to motivate children to explore the history of their neighborhood and document their findings online. Price tag: 10,000 €.

Belgium

Belgian small and medium business owners go along with their European counterparts when it comes to choosing their preferred communication channels in 2021, although in a different order. In Belgium, the own website leads the ranking, followed by social media and email marketing.

The top three sought-after marketing expertise are slightly different. Digital strategy and online advertising, as well as website and e-commerce creation, are leading the poll but traditional advertising comes in third.

The online advertising campaign done by Just Like U highlights what can be achieved with a relatively small budget. For a budget of 3,000 €, the Belgian agency created both a landing page and a Google AdWords campaign for the family-owned locksmith GS Serrurerie

France

In France, the top three marketing channels for 2021 are also social media, the business website, and email marketing. However, the most in-demand competencies according to entrepreneurs are a bit different.

Traditional advertising leads the ranking in France, followed by digital strategy and online advertising as well as social media. Website and e-commerce, as well as mobile app creation, are competing for the 4th position. 

PublicAverti implemented a traditional advertising campaign for the product launch of a nose spray for babies for a budget of 10,000 €. The campaign included both B2C efforts like posters in pharmacies, as well as B2B measures like ads in trade press publications.

PublicAverti
Source: PublicAverti

Conclusions

Ongoing social distancing measures and sometimes restricted budgets are setting the tone for the marketing year 2021. 

Digital strategy and online advertising are among the top 3 in-demand marketing expertises in all surveyed countries. Website and e-commerce creation is a top pick in three out of five countries as well as social media.

This could be linked to the inaccessibility of physical points of sales and an increased need for digitalisation.

Our results show that those countries where SMBs anticipate the strongest declines in marketing budgets correlate with those European countries whose GDP contracted the most in 2020.

Nevertheless, many European SMBs have an increased marketing budget at their disposal and our examples show that well-invested smaller amounts can still make SMBs stand out of the crowd.

Methodology

For this report, Sortlist surveyed 498 owners and general managers of small and medium businesses in Spain, France, Germany, Belgium, and the Netherlands. An SMB is a business with fewer than 250 employees and annual sales of no more than EUR 50 million. The survey was carried out between 27 November and 7 December 2020 through online questionnaires.