Last week I highlighted WebVisible’s report on the increased use of search marketing by small businesses. Another research concern, VerticalResponse also reported that search engine marketing will be a key 2010 expenditure for smaller operators. And according to VerticalResponse, small business owners are planning a number of budget cuts to traditional media formats next year.

About half of small businesses,  56.6% of those with fewer than 11 staff members and 48.2% of those with between 11 and 100 staff members, will not use online banner advertising in 2010. The VerticalResponse report also indicates that small business owners are relying less on media formats such as TV and radio. Nearly 80% of survey respondents say they do not plan to use TV next year and 72.7% do not plan to use radio advertising.

As small business operators take actions similar to those employed by larger firms, VerticalResponse CEO and founder Janine Popick believes “marketers need to help small businesses to see the value of integrating search engine marketing such as Google, Yahoo and Bing into their campaigns.”

The shift from traditional to newer forms of marketing will result in some cost savings for small marketers. For example, social media and email campaigns can cost significantly less than TV and radio. However, paid, integrated search engine marketing can be expensive, especially if the campaigns are not carefully targeted. Marketers who efficiently deploy and manage search engine campaigns stand to gain market share and improve profitability in 2010.

[Source: State of Small Business, VerticalResponse, Fall 2009 release]

Small business owners are hoping to engage customers in new ways in 2010. According to Ad-ology Research, 28% of small business owners say they plan to spend more on online video in 2010, up 75% over last year’s plans. Twenty five percent say the same about social networking, while 21% plan to commit more resources to mobile advertising.

Facebook was ranked the most beneficial social network for small business, followed by LinkedIn and Twitter.  These owners say the top business benefits of social networking are lead generation, keeping up with the industry, and monitoring the online conversation about their business.

E-mail marketing continues to be the most popular online marketing method for small businesses, but these numbers show increased acceptance for emerging media since last year’s study.

“Small business owners understand that the marketing landscape is changing, and they need to connect with consumers in new ways,” said C. Lee Smith, president and CEO of Ad-ology Research. “They’re still using traditional media, but they’re embracing these emerging media types as a way to take their business to the next level,” Smith said.

Twenty-nine percent plan increased advertising spending overall, targeting increased resources to online, direct mail, and newspaper advertising.

The Ad-ology Small Business Marketing Forecast reveals small business owners are generally hopeful, with more predicting increased sales in 2010 versus 2009, and one in five expressing optimism about the economy.

Other key findings from the study:

• 31% say they don’t use social media because their customers don’t use social media.
• More than one-third of these business owners plan to spend more time writing white papers and e-articles.
• 52% of small business owners surveyed plan to devote more resources to cause marketing in 2010.
• 42% plan to participate in trade shows or conferences, and the percentage of these planning to spend on trade publications increased 18% from last year.

The study was conducted in November 2009 by Ad-ology Research to analyze the attitudes and marketing plans of small business owners. The Small Business Marketing Forecast report is available for purchase through the Research Store at Ad-ology.com.

ABOUT AD-OLOGY RESEARCH

Ad-ology Research analyzes key marketing and advertising trends in over 440 industries and what motivates end-customers. The company’s research is used by over 2,000 advertising agencies, media properties, local governments, and product marketing departments across the United States. Ad-ology Research is a division of Sales Development Services (SDS), Inc. – a Westerville, Ohio firm founded in 1989.
METHODOLOGY

Ad-ology Research surveyed an online panel of 1100 owners of U.S. businesses with less than 100 employees in November 2009. The margin of error for this survey is +/- 2.95 percentage points.

EDITOR’S NOTE: The Ad-ology trade name should be hyphenated in all printed references.

PRESS CONTACT:
Michelle O’Brien
(614) 794-0500 ext. 100
pressrelations@ad-ology.net

Small businesses are continuing to invest in online search marketing campaigns to reach new and existing clients. According to WebVisible’s 2009 Q3 Report on the State of Small Business Online Advertising, small business owners upped their search marketing by 91% between the third quarter of 2008 and the third quarter of 2009. What accounts for this huge increase? WebVisible CEO Kirsten Mangers suggests that increased competition in the search engine market, especially with the entrance of Bing this summer, may have accounted for some of the growth.

Bing had captured about 10.5% of the search market at the end of Q3 2009. Much of the growth came at the expense of Google. And this shift in the search market may be because Bing has CPC (cost per click) rates that are 30% lower than Google in some areas.  However, Google still had 60.4% of the small business search market. Mangers also notes that more small businesses are entering the search market, especially in the Local area, because they see that their efforts are paying off.  “The real news is that these SMB advertisers are getting results from their interactive budgets that they’ve been after for years now. Local interactive is on the rise – because it works,” says Mangers.

WebVisible’s survey indicates that the typical small business spent $1,658 on search marketing in Q3 2009. At least 15% of firms spent at a higher quarterly rate that ranges from $2,000-$2,999.  Analysts expect SMBs (small and medium size businesses) to continue to spend on local interactive search.  Matt Booth, SVP and Program Director, Interactive Local Media for BIA/Kelsey states, “I should think that they (search engine companies) would be encouraged by these results, as more and more SMBs move their ad budgets away from print and directories and online, small market share increases will come to represent big dollars.”

[Source: WebVisible Q3 Report Reveals New Trends in Local Interactive Marketing, company release, Fall 2009]