Although the world-wide financial crisis is leaving credit lines in
the lurch and many small and medium-size business (SMB) owners
struggling to survive, a survey by Westerville, Ohio-based Ad-ology
Research suggests SMBs are going to increase advertising budgets in the
next year.
Ad-ology’s Small Business Marketing Outlook study found that more than
a quarter of the 863 owners of U.S. businesses (with less than 100
employees) surveyed small business owners plan to spend more on
advertising, and another 60 percent plan to spend about the same as in
2008.
The survey found that small business owners are cautiously optimistic
going into 2009. While 25 percent stated they are fearful about the
current economic situation and 58 percent said they are concerned, 83
percent expect 2009 sales to be up or about the same as 2008.
When broken down by media type, over half of small business advertisers
plan to spend the same or more on the following: Online advertising (69
percent), Yellow Pages (54 percent), newspapers (51 percent), and
direct mail (51 percent).
"Small business owners rely on advertising sales reps for guidance and
are clearly looking for consultative partners in the advertising
process," Ad-ology’s president and CEO C. Lee Smith said in a prepared
statement. "They are more likely to purchase advertising from those
that understand their business," Smith said.
One of the interesting findings from the survey is that 52 of small
business owners surveyed agreed with the statement "you can gain market
share by marketing while your competitors are cutting back." More than
half of respondents plan to spend the same or more time and money on
their Web sites and email marketing in 2009.
This survey follows an August report from The Kelsey Group, a
Princeton, N.J.-based research firm that found 81 percent of small
business owners are expected to maintain or increase their advertising
budgets over the next 12 months.
A more recent study from Kelsey Group suggests SMBs will be using video
advertising with greater frequency in 2009. At Interactive Local Media
2008, for example, Gordon Henry, president of video advertising company
Spotzer's president of North and South America, suggested that within a
few years half of SMBs that have Web sites will have a video
advertisement. That's approximately 3 million small-business ads in the
next few years in the United States alone. The Kelsey Group says it
expects even faster adoption of video ads by the SMB market that the
previously163 percent compound annual growth rate (CAGR).
The Kelsey Group’s study also suggests the use of traditional media
will become a differentiator. Although new media channels and search
have outshined traditional media, it still has a broader scale and
reaches more people than new media. Indeed, with dropouts of many key
advertisers, better positions (and prices) help them stand out. Kelsey
Group says it expects to see TV ads, radio and to a lesser extent,
newspapers, act as differentiators for leading online services. For
instance, they predict the rise of cross-media bundles bringing
together newspapers, TV, radio and online services.
Interestingly, Ad-ology’s survey found the majority of small businesses
are not using other emerging media: 77 percent do not use online video,
83 percent do not podcast, and 82 percent do not use mobile advertising.
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