SMBs to Make Significant Shift to Digital

Small and medium sized businesses (SMBs) have seen the future – and it’s increasingly about digital marketing. That’s the core finding in the latest BIA/​Kelsey U.S. SMB Spending Forecast. In addition, the forecast reveals that marketers in this sector will spend on performance-​based platforms and customer retention solutions to maintain their revenue streams.

By 2015, the typical SMB will spend 30% of its marketing budget on traditional media formats. That’s a drop from the 52% that was captured by traditional media last year. Solutions in demand by SMBs will ranges from digital such as mobile and online display to performance-​based deals and coupons to customer retention strategies such as websites, email and reputation and presence management. As BIA/​Kelsey analysts see it, the world of SMB marketing will look something like this in 2015:

  • Traditional media $12.1 billion
  • Online/​digital media $16.6 billion
  • Performance-​based commerce $4.6 billion
  • Customer-​retention solutions $6.9 billion

Total marketing spending by SMBs will reach $40.2 billion in 2015, a figure which predicts compound annual growth rates of 12% from 2010 on.

Just as SMBs have historically relied on their media sales rep to advise them regarding ad buys, they’ll need outside expertise to help them navigate the world of new media. Mark Fratrik, vice president, BIA/​Kelsey says “Traditional media companies and new upstarts that are actively building products and solutions in the areas of digital display, SEM/​SEO, email marketing, calendaring, and other acquisition and retention tools will be in a good position to take full advantage of this substantive change in the overall SMB landscape.”

The BIA/​Kelsey findings largely echo results put forth by other research shops. For example, earlier this year, Ad-​ology Research predicted that SMBs would be shifting resources to the online venue, especially in the online video and mobile sectors.

[Source: U.S. SMB Spending Forecast. BIAkelsey​.com. 30 Aug. 2011. Web. 7 Sept. 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.