Small Businesses Moving Aggressively to Online Marketing

Small and midsize companies (SMBs) continue to move marketing dollars to digital channels, according to BIA/Kelsey, which now forecasts digital spending among US SMBs to reach $16.6 billion annually by 2015—roughly 70% of total SMB marketing budgets.

By 2015 SMBs are expected to allocate only 30% of their marketing budgets to traditional advertising (down from 52% in 2010).

The remaining 70% will be allocated to digital (mobile, social, online directories, display, and digital outdoor), performance-based commerce (pay-per-click, deals, and couponing), and customer retention solutions (email, reputation and presence management, websites, social marketing, and calendaring/appointment-setting):

 

SMB spending on traditional advertising will be essentially flat during the forecast period (down to a 0.6% compound annual growth rate (CAGR) from $11.8 billion in 2010, to $12.1 billion in 2015.

 

 

Overall, US SMB spending on media, marketing and business solutions will grow from $22.4 billion in 2010, to $40.2 billion in 2015, at 12% CAGR.


 

 

  • Spending on performance-based commerce and transaction platforms, from $1.7 billion in 2010, to $4.6 billion in 2015 (21.5% CAGR).
  • Spending on customer retention business solutions will grow from $3.5 billion in 2010, to $6.9 billion in 2015 (14.6% CAGR).

About the data: BIA/Kelsey’s US SMB Spending Forecast is derived from the firm’s US Local Media Annual Forecast and its proprietary Local Commerce Monitor study, which tracks the advertising and marketing spending habits of SMBs.

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