Small business advertising in play

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teens_small.jpgADOTAS — Mainstreet businesses spent more than $6.7 billion in locally generated, locally targeted interactive advertising in 2008 – more than half of the U.S. total.

In addition, while the smaller merchants spent less than $300 each on Web site support last year, Borrell Associates in its “Main Street Goes Interactive” report is forecasting that SMBs will triple this “non-advertising” marketing expenditure over the next few years.

There are more than 14.6 million SMBs, and they tend to overspend on advertising relative to their size, Borrell says.  The smallest U.S. businesses have average annual sales of $212,000 and spend just $5,671 per year on advertising – typically in the yellow pages or on direct mail ads or on coupons. But they are now investing 11 percent of their advertising, up from less than 4 percent three years ago. SMBs aare less receptive to buying banner ads, which accounts for 54 percent of their online spending, but declining, in favor of search-engine advertising, online directory listings, and streaming video.

According to Borrell, small businesses owners need to understand Internet ad trends as they look for help to stimulate sales from both inside and outside their market. Many Internet marketing products are oversold and under perform. Understanding the nuances of online marketing is even more important for local media companies trying to serve this smaller, lower-ticket advertising segment, states Borrell.

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