High-Spending SMB Marketers Embrace Online Media - InformationWeek

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8/27/2010
07:33 PM
Jake Widman
Jake Widman
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High-Spending SMB Marketers Embrace Online Media

A recent survey of SMBs and their advertising habits found that those that spent more than $25,000 per year on advertising were more likely to invest in online media, including measures as simple as having a website.

A recent survey of SMBs and their advertising habits found that those that spent more than $25,000 per year on advertising were more likely to invest in online media, including measures as simple as having a website.The survey was conducted by media researchers BIA/Kelsey as an extension of its ongoing Local Commerce Monitor (LCM) study. The LCM focuses on SMBs, defined by BIA/Kelsey as companies with 100 or fewer employees.

The core LCM population spends an average of $2,000 to $3,000 per year on advertising; this new LCM: SMB Plus Spenders study focused on those spending at least $25,000 per year. Some of the findings were unsurprising: the big spenders advertised across more than twice as many media as the core group, for example (6.5 to 3.1). And they spent vastly more on broadcast media -- 16.1 percent of their ad budgets, or more than $4,500 per year on average, was in broadcast. By comparison, the core group spent only 1.3 percent of their budgets on broadcast. (Given the average ad spend of $2,000 to $3,000, one wonders what broadcast coverage an SMB can get for $25 to $40.)

The difference in online media spend isn't as great -- 26.0 percent to 21.8 percent, indicating that SMBs see an online presence as a relatively inexpensive way to get advertising. At the same time, only 62 percent of the core group have websites or home pages, compared with 90 percent of the Plus Spenders. It's hard to know which is more surprising: that there's still a third of small businesses that don't have even that much of an online presence; or that a company can spend more than $25,000 on advertising and not even have an operable website. Either way, it seems like an incomprehensible blind spot -- in these days of inexpensive Web hosts and easy do-it-yourself website creators, there's no excuse for a business of any size not to have a Web presence.

The Plus Spenders rated demonstrable ROI and the ability to track the source of clicks as the most important services they expect from an online advertising vendor. "SMB Plus Spenders are more performance-oriented in making their media purchase decisions and do a considerable amount of lead tracking," said Steve Marshall, BIA/Kelsey research director. "This group of SMBs, with its digital media savvy and use of more media categories, represents the sweet spot for many companies developing and delivering local advertising solutions."

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