For much of the past decade, digital advertising has given small- and medium-sized businesses the ability to scale quickly, measure performance accurately and compete with far larger brands on relatively modest budgets.

Often overlooked, these organisations – employing between 10 and 499 people – form a critical part of the wider economy.

Research from Warc and Intuit Mailchimp shows how mid-market marketing organisations are now responding to a tougher operating environment, marked by rising customer acquisition costs, fragmented media channels and ongoing budget pressure.

Based on a survey of more than 1,200 mid-market marketers, alongside 20 in-depth interviews with marketing leaders across the US, UK, Canada, Australia and New Zealand, the research finds marketing spend remains concentrated in a narrow set of channels.

Investment is often skewed towards short-term digital tactics, while owned media channels such as email and SMS remain underused despite their potential to drive long-term growth.

Is a focus on effectiveness delivering bigger marketing budgets?

At last year’s Advertising: Who Cares event, a study presented by Thinkbox research director Anthony Jones and a team of industry volunteers suggested many SMEs are operating without formal marketing plans, or ways of linking advertising spend to business outcomes.

“Half of them don’t even have any defined KPIs,” Jones said. “They get stuff done without necessarily worrying about the long- and medium-term impacts.”

As a result, many SMEs have gravitated towards large technology platforms such as Google and Meta, which offer relatively low cost, AI-driven tools designed to deliver measurable results quickly.

Industry data suggests this approach has paid off in the short term. According to the IAB, SMEs that invested in digital advertising saw a combined annual sales uplift of £26bn, while 81% say digital advertising is important to the success of their business. For many direct-to-consumer (DTC) brands, this is how growth begins, before slowing.

The ‘performance plateau’

When cleaning brand Purdy & Figg launched in 2018, it focused almost entirely on paid social. Around 95% of its marketing spend went into Meta platforms.

“We refer to [Facebook and Instagram] as a shop window,” explains marketing director Rufus Neville. “Showing up on Meta allows us to reach lots of eyeballs, and people are quite used to seeing ads on Meta, clicking on it and buying something like us.”

Despite industry debate around the effectiveness of Meta advertising, this approach proved commercially successful. Through paid social alone, Purdy & Figg built an eight-figure business, while also generating brand awareness and consideration.

However, Neville says the brand was on the precipice of a “performance plateau”, a theory outlined by effectiveness expert Tom Roach in Marketing Week previously.

It describes the point at which growth driven by search, social and display advertising starts to level off. Customer acquisition costs rise, return on ad spend declines and incremental growth becomes harder to achieve.

“When you launch on Meta, there’s basically a subset of people who are really predisposed to buying things online,” explains Neville. “At some point, you sweep up all of them, and you’re having to create desire at scale and over longer time periods, and you need to create that level of awareness to allow for you to punch through and access a greater pool of the market.”

Is your brand stuck on the performance plateau?

DTC laundry and cleaning brand Smol noticed a similar problem. Since launching in 2018, and following CMO Hilary Strong’s arrival in 2021, performance marketing has also been the primary growth driver for the brand, with more than 90% of marketing spend typically going into performance channels.

“The vast majority has been Meta – Facebook and Instagram – and for a number of years that worked really well,” Strong says.

Video interviewing and screening software company Willo has followed a similar trajectory, albeit in a B2B context.

When Rachel Thomson joined as vice-president of marketing in 2023, the business relied heavily on paid search and lacked a coherent media or brand strategy.

“We were really in that phase of startup to scale-up,” she explains, noting the entire team was made up of nine people. She realised there was no clear strategy, with the brand heavily relying on lead generation.

“The biggest blocker that I realised when I came in was we had a foundational base when it came to brand, but it wasn’t consistent,” she explains.

However, Willo, Smol and Purdy & Figg – all at different stages of growth, have taken different approaches to rectifying the problem.

We’re like a little ragtag bunch of pirates who are just fighting hard and and trying to make a dent in in a pretty massive category.

Rufus Neville, Purdy & Figg

Thomson’s first priority was to define and embed the brand internally, before scaling external activity.

“Nobody else in the team really even knew what brand was, and so I focused a lot on building the brand when I came in the door, and then educating the team on the importance of brand consistency,” she says.

Since it launched in 2020, Willo has achieved 64 times revenue growth, including 70% growth in 2025.

Meanwhile, faced with what Neville describes as “commercial headwinds”, Purdy & Figg decided to broaden its media mix rather than double down on performance channels alone.

Last year, the brand launched its first-ever TV campaign as part of a deliberate move into more upper-funnel activity. Rather than treating TV as a branding exercise without accountability, the business ran an incrementality test, airing ads in only half the country to create a geographic holdout.

“We saw an interesting curve to understand how TV pays back and over what timeframe,” he says.

“Within 12 weeks, it was basically paying for itself. From that instance, we could be pretty sure that there’s going to be a latent brand effect over the next 12 weeks-plus.”

Following the campaign, Purdy & Figg has recorded its biggest trading periods to date, including its first £1m sales day. More than 60,000 people also joined the waitlist ahead of the launch of its Christmas product.

Despite this success, Neville is clear the brand has no intention of moving budget away from Meta unless there is a clear commercial case to do so.

“Until we can measurably show that from a performance perspective, there is a better place to spend our next pound, I wouldn’t imagine that our investment in Meta would go anywhere else,” he explains.

“We wouldn’t do it. We wouldn’t start spending money in Reddit just because we want to spend less in Meta. ”

The case for digital-only

Smol, however, has shifted towards a more full-funnel approach away from TV. Spend is now split more evenly between Meta and YouTube, with creative designed to serve different stages of the customer journey.

“We’re running purposely designed brand building upper funnel content that doesn’t have any CTA. There’s no big sales message. It’s much more about building a relationship with potential customers and a much more long-term plan to it,” Strong says.

Late last year, the brand launched a digital-first campaign designed to feel like a traditional TV ad, but distributed exclusively online. The decision not to use broadcast TV was driven by measurement considerations.

“It’s much easier to track digital activity than TV,” Strong says, noting that the brand has experimented with TV before, but has found it has been ” hard” as it is less flexible than digital.

Despite remaining digital-only, Smol says the campaign drove increases in consideration, site visits, branded search and organic traffic.

Pip & Nut on the importance of driving distinctiveness as the brand grows

This approach will continue into this year, with increased investment in creative, measurement and full-funnel planning, Strong notes.

“We are really leaning into it. We know how to sell like we know how to create customers by digital channels, but can we simultaneously build a brand,” she adds.

Across all three businesses, marketers point to speed as one of the biggest advantages of operating at a smaller scale. Fewer layers of approval allow teams to test, learn and adapt quickly.

At the same time, limited budgets and resources require careful prioritisation.

“We haven’t got big processes, a massive team, and the legacy of a framework for creating campaigns,” explains Neville. “We’re like a little ragtag bunch of pirates who are just fighting hard and and trying to make a dent in a pretty massive category.”