SMB spending on media, marketing and business solutions will grow from $22.4 billion in 2010 to $40.2 billion in 2015.
Small and midsize businesses
will continue the recent trend of shifting their marketing budgets to digital
advertising, performance-based platforms and customer-retention business
solutions over the next five years, according to a U.S. SMB Spending Forecast
by media and marketing consulting firm BIA/Kelsey. The report said this trend
creates an increasingly large market opportunity for businesses serving SMBs
and developing SMB tools.
By 2015, SMBs will allocate
30 percent of their marketing budgets to traditional advertising (down from 52
percent in 2010), with the remaining 70 percent going to digital/online media
(mobile, social, online directories, online display and digital outdoor),
performance-based commerce (pay-per-click, deals and couponing) and customer-retention
business solutions (email, reputation and presence management, Websites, social
marketing and calendaring/appointment-setting), the report predicted.
"With the advent of daily
deals to drive customer acquisition, SMBs are now increasingly focused on
leveraging technological solutions to engage, grow and retain a higher
percentage of their customers," said Neal Polachek, president of BIA/Kelsey.
"As this trend accelerates, these SMBs will turn to outside providers-media
companies as well as pure-play technology providers-to harness simple tools,
which will enable them to maximize the long-term value of each new customer
Overall, U.S. SMB spending
on media, marketing and business solutions will grow from $22.4 billion in 2010
to $40.2 billion in 2015, representing a compound annual growth rate (CAGR) of
12 percent, while SMB spending on traditional advertising will be essentially
flat during the forecast period, experiencing a 0.6 percent CAGR, from $11.8
billion in 2010 to $12.1 billion in 2015, according to the report.
SMB spending on
digital/online media will grow from $5.4 billion in 2010 to $16.6 billion in
2015 (at a 24.9 percent CAGR), and the report said SMBs would also increase
spending on performance-based commerce and transaction platforms, from $1.7
billion in 2010 to $4.6 billion in 2015 (a 21.5 percent CAGR). Spending by SMBs
on customer-retention business solutions will grow from $3.5 billion in 2010 to
$6.9 billion in 2015 (14.6 percent CAGR).
"Our forecast clearly
indicates that the allocation of SMB advertising and marketing dollars for
acquiring and retaining customers will both shift and grow over the next five
years," said Mark Fratrik, vice president of BIA/Kelsey. "Traditional media
companies and new upstarts that are actively building products and solutions in
the areas of digital display, SEM/SEO [search-engine marketing/search-engine
optimization], 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."
BIA/Kelsey's U.S. SMB
Spending Forecast is derived from the firm's U.S. Local Media Annual Forecast
and its proprietary Local Commerce Monitor study, which tracks the advertising
and marketing spending habits of SMBs.