A new study from the Internet Advertising Bureau (IAB) finds that 60% of UK SMEs are now using paid digital advertising, and half of SMEs say digital is playing a more important role than ever during the COVID crisis.

The report, “Powering Up”, also highlights the depth of anxiety about the economy and business environment with 64% of SMEs saying they are concerned about the future of their business.

Besides paid-for ads, 67% of businesses use free digital tools, and of those who do so, 63% say digital provides a good ROI. The particular strengths of digital cited by the 1,200 SMEs surveyed were reaching new customers, generating sales, and speed and flexibility.

Overall, the study suggests that as much as 45% of all digital ad spend comes from SMEs.

But while uptake of digital is high, the findings indicate plenty of opportunities for SMEs to diversify strategies and make them more effective. Some 70% of those surveyed believe communicating with customers is more important than ever during the pandemic and 58% want to vary the way they communicate. But 40% are not currently using paid digital ads at all and of those that do, the average number of channels used is only 1.3.

Reasons cited for not investing were cost, followed by relevance or lack of knowledge about the medium. One in seven SMEs say their knowledge and ability to use digital is “not good”. And while social media is the most-used paid-for digital channel, it also has the highest demand for more support on how to run a campaign effectively.

Meanwhile, broadcaster Sky has pledged an extra £1.5 million to fund free, targeted advertising for SMEs struggling during the pandemic. Its scheme will give £10,000 to each of 150 UK SMEs who have been in business for over a year and have fewer than 50 staff.

The announcement is an extension of the SME Support Scheme launched last month by Sky Media, Sky’s ad sales arm, which made £1 million available to help 100 businesses.

Ads will be delivered by the broadcaster’s AdSmart platform that allows brands to carry out targeted advertising – showing different ads to different households watching the same content according to relevance, which is determined by such factors as location, demographics, and lifestyle.

David Sanderson, director of AdSmart Local and Development at Sky said: “SMEs have a voracious appetite for targeted TV advertising at the moment.”

Sourced from IAB UK, Sky