Survey: SMBs to Spend More on Ads in 2009

Small and medium-size businesses (SMBs) are expected to increase advertising budgets in 2009, but a survey shows many aren't yet experimenting with mobile advertising or Web-based video ads.

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.