More SMBs to Up Online Ad Budgets in 2011

Smaller businesses often lag behind when it comes to implementing the latest marketing strategies. I highlighted a MerchantCircle report earlier this week which noted that mobile advertising and group buying tactics will not be top choices for businesses with an ad budget of below $2,500. However, a new report from Borrell Associates points out that the general attitude about online marketing is largely positive for small and medium-​sized businesses (SMBs) for 2011.

As Kip Cassino, Borrell executive vice president points out, “Smaller businesses make up half of all business revenue, more than half of all employees, and well over nine of every 10 business units in the nation.” And Borrell data also indicates that these “ SMBs tend to overspend on advertising.” This year, SMBs will spend $40.6 billion on online advertising. This represents a 29% increase over last  year’s levels.

The sector to benefit most from the increased spending is targeted display advertising. By the end of the year, Borrell Analysts expect to see spending of $15.92 billion on targeted display advertising. This growth will come at the expense of other sectors. According to Borrell, email marketing will fall to $9.6 billion which is an 8% drop and paid search will fall to $5.43 billion – a 28.7% drop.

Currently, the following percentages of SMBs are using online marketing channels:

  • Email marketing 80%
  • Social media 70%
  • Search engine marketing 52%
  • Targeted online display 51%
  • Run-​of-​site- online display 48%
  • Paid search 47%

While over 1/​3rd of firms in this survey will increase social media efforts this year, only 8% of the firms, currently engaged in mobile marketing (40%)  plan to increase spending.

[Source: Stambor, Zak. SMBs plan to increase online ad budgets. Internetretailer​.com. 11 Mar. 2011. 23 Mar. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.