New research from Amazon Ads shows that Australian SMEs are benefiting from the positive impact of advertising as they look to grow their businesses both domestically and internationally.

According to the study, almost nine in 10 businesses said their current advertising strategy was successful in attracting new customers, and over seven in 10 businesses said it had helped them expand their Australian business. More than half said advertising had helped them grow their business internationally in the past 12 months.

This reliance on advertising has led to more than a third of Australian SMEs increasing their advertising spend in the past year, while 39 percent kept their budget unchanged year-on-year. The most common reasons for this increase in spend are to increase awareness of a new product or service (47 percent) or to improve brand awareness among customers (45 percent). The most popular channels for advertising spend by SMEs are social media advertising (70 percent), followed by online search (63 percent) and online display (44 percent). Looking ahead, almost a quarter (24 percent) of respondents said they plan to spend money on streaming TV advertising in the next 12 months.

Of the 238 SMEs surveyed, over two-thirds said they currently spend money on advertising, while 32% said they do not spend any money on advertising at all.

Despite the success some are achieving, not all SMEs believe they need advertising to grow their business. When SMEs that don’t currently advertise were asked why, the most common response was that it was too expensive (44 percent), while a similar number (38 percent) said they hadn’t made a return on investment (ROI) so far.

Even among SMBs currently investing in advertising, challenges remain. Three in 10 said their biggest challenge was a lack of budget, followed by just under a third who cited a lack of time and resources, and 28 percent said the biggest challenge for their business to advertise successfully was knowing where to focus their advertising budget.

“We see many small and medium-sized businesses testing the impact of advertising as part of their overall growth strategy and deciding whether advertising offers the right return on investment to help them achieve their business goals,” said Kasey Jamison, head of endemic advertising at Amazon Ads in Australia and New Zealand.

“Our goal is to make advertising as easy as possible for every small business by providing easy-to-use tools and resources that offer low entry costs, closed-loop measurement, and the ability to get their products in front of customers at scale.”

Australian SMEs believe technology can improve the impact of advertising and solve existing problems. Almost half of Australian SMEs said they believe AI will improve the performance of their advertising campaigns. For this reason, almost one in five of the SMEs surveyed are currently training their teams to use AI technology for advertising purposes.