Online advertising an integral part of MSME commercial goals

15 October 2023 3 min. read
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Online advertising has become a transformative force in the digital age for micro, small and medium enterprises (MSMEs), with more than 77% of them now embracing online advertising as part of their diversified marketing strategies. Research from Primus Partners indicates that a remarkable 80% of SMEs attribute increased profits to their adoption of online advertising.

The Indian online advertising industry is on a remarkable growth trajectory, with a compound annual growth higher than 18%. This is due to the increasing use of smartphones and demand for faster internet, enabling Indian advertisers to effectively target consumers.

For MSMEs, online advertising has been a game-changer by expanding their access to online users.

Online advertising an integral part of MSME commercial goals

One key advantage of online advertising is its cost effectiveness, with the channel more cost-effective (and cost-tailored) compared to traditional advertising. This means that even with limited budgets, MSMEs can swiftly engage with their target audiences through online ads.

In its report, Primus Partners – a leading management consultancy firm –analyzed the advertising habits of Indian MSMEs. The study reveals that a significant portion of MSMEs, approximately 47%, are prioritizing online sales channels to boost their revenue, while 26% of these enterprises are still concentrating on offline or in-store sales as their main means of generating income.

Around 21% of businesses surveyed consider online advertising as the most effective advertising medium, while an additional 41% regard it as at least equal to, if not superior to, traditional advertising methods.

However, 27% of MSMEs are adopting a balanced approach by harnessing both online and offline sales channels to enhance their sales performance.

Online advertising an integral part of MSME commercial goals

A majority of MSMEs in India, more than 59%, attested to the significant role played by online advertising in successfully addressing all of these objectives.

Furthermore, over 80% of MSMEs reported a positive impact on their profits as a direct result of online advertising. Around 75% said they were better able to reach more customers and target audiences. These outcomes underscore the pivotal role of online advertising in driving business growth and achieving tangible results for organizations.

What online tools?

The tools of choice for online advertising among Indian MSMEs include targeted ads, email campaigns, and video ads, with pay-per-click being prominent among them.

Online advertising an integral part of MSME commercial goals

Social media advertising leads in popularity, with 65% of MSMEs opting for this option. Others, such as email campaigns (46%), targeted ads (27%), video-based ads (24%), and pay-per-click ads (22%) also feature prominently as preferred choices for online advertising among Indian MSMEs.

Meanwhile, among larger MSME businesses, email advertising emerged as the top choice, with around 78% agreement, followed closely by mobile and social media advertising. Notably, pay-per-click search advertising also received significant recognition, with about 54% approval.

Online advertising an integral part of MSME commercial goals

The advertising sector in India is growing rapidly and is now expected to grow by about 15% by the end of next year, according to a report by advertising agency Dentsu Digital advertising is leading the way in that growth, surpassing television advertising.