According to the 2016 Local Pulse Report from Thrive Analytics, 42% of small and medium-sized businesses (SMBs) are increasing their marketing budgets this year. This is an increase from 35% at the same time last year. The study reported that top growth areas among the more than 1,100 SMB owners who responded include mobile marketing at 49% (an increase of 15% from last year) and online display and paid search at 44% (both up 11%).

Just six out of 10 respondents to the study have a website, but 80% use social media platforms, including Facebook (70%), Twitter (32%) and LinkedIn (26%). Seven of 10 owners expect social media to generate leads, while more than half (57%) use it to build awareness and another 57% utilize it to engage their customers. Only 19% of respondents report paying for advertising on social media.

“Digital media continues to be SMBs’ main focus when it comes to marketing, especially with newer businesses,” said Jason Peaslee, managing partner of Thrive Analytics. “However, older and more established businesses continue to see value in traditional forms of marketing too. As SMBs view local advertising as a more strategic source of leads and essential for keeping up with competition, more dollars are being invested across a growing number of channels.”

Almost half (49%) of all respondents stated that mobile is their top growth area in terms of marketing, but approximately the same number state that their websites are not mobile-optimized. In fact, the majority of respondents reported they do not have a solid mobile marketing strategy.

The Local Pulse Report is a comprehensive bi-annual study that examines social media use, ratings and reviews, mobile marketing, marketing budgets and technology adoption.

Read more: Small-Business Marketing Budgets Continue to Rise