I recently posted on the SCORE Small Business Success Blog about the advantages digital tools can offer a business. It seems more businesses are listening: In a recent survey, a majority of local businesses report moving their marketing efforts online, using more sophisticated digital marketing methods, and investing more in them.

The 2017 Local Merchant Report surveyed businesses with at least one physical location and fewer than 50 employees.

Here’s some of what the study found on local businesses marketing online:

Small business marketing spending is on the rise

Small, local merchants’ marketing budgets run the gamut. About one-third of survey respondents plan to spend less than $1,000 in the coming year for all their marketing efforts, including both digital and traditional media. However, almost 30 percent plan to spend $25,000 or more.

No matter the size of their marketing budgets, 57 percent of local businesses surveyed expect to increase marketing spending; one-third are increasing it significantly.

Small businesses are focused on digital marketing

Already, about one-third of local merchants surveyed say they spend at least half their marketing budgets on digital methods and media. Nearly six in 10 (57 percent) say that digital mix is growing.

Where will marketing spending increase the most in the coming year?

Local businesses plan to spend more on:

• Social media marketing - 44 percent
• Email marketing – 36 percent
• Local website/listings - 36 percent
• Digital display advertising – 33 percent
• Mobile marketing – 33 percent
• Paid search marketing - 31 percent

Businesses in the survey report that social media and email marketing are their most effective marketing tools, so boosting spending in those areas makes sense. What’s the least effective marketing tactic? Paid search marketing is difficult for most respondents in the survey. Not only do respondents say they struggle with it, but they also don't think it's very effective (possibly because they aren’t doing a good job with it).

The larger a business’s marketing budget, the more likely it is to plan to spend more on digital marketing and advertising, the study says. The report suggests more spending leads to better results, encouraging business owners to boost digital marketing spending even further.

Managing and measuring marketing

Local merchants are not only getting more sophisticated in their marketing tactics, but they’re also becoming better at measuring their marketing efforts’ effectiveness. A whopping 80 percent use some type of marketing monitoring tactic. Most of them monitor results in a low-tech way: simply asking customers how they learned about the business. However, many also use tools such as website analytics, call tracking, and promotional codes.

Managing marketing is a time-consuming task for a small business. Where do local businesses turn for help with their marketing and advertising efforts?

Here’s what they use:

• Social media management tools - 49 percent
• Digital dashboard for ROI analysis - 37 percent
• Local listing management services – 27 percent*
• Marketing automation - 21 percent*
• Third-party site analytics tool - 21 percent*
• Digital consultant or agency - 13 percent*

Local businesses that spend more on marketing are more likely to use the ones with asterisks in the list above. But even among smaller spenders, the use of social media tools and digital dashboard tools increased substantially compared to last year's survey, with use of digital dashboards doubling.

Follow the customer

The final takeaway: There’s still room for improvement when it comes to how local merchants maintain and learn from their customer data. The majority (45 percent) use spreadsheets to do so. Just one-third use customer relationship management (CRM) software, and only 18 percent use integrated marketing and point-of-sale systems. With so many CRM and POS systems available that are tailored for small, local businesses, it’s a shame not to take advantage of the options that can make your life easier — and your customers happier.

Do you need some help figuring out the best marketing mix for your small business? The experts at SCORE can help. Find your SCORE mentor today, and start getting free business advice.