Small, Mid-Sized Businesses Have Embraced Online Advertising

Small and medium-sized businesses in the United States are more likely to advertise online than through traditional media, but spend less on online than traditional media.

In August 2009, 77 percent of U.S. SMBs used online for advertising, compared to 69 percent that used traditional media, according to The Kelsey Group and ConStat.

The groups say the August figures represent the first time penetration of online advertising surpassed traditional.

“We have been tracking the trend of digital/online media replacing traditional media over four waves of the Local Commerce Monitor study,” said Steve Marshall, director of research at The Kelsey Group. “The milestone of digital/online surpassing traditional media among SMBs is an indicator of the broad shift to online platforms.”

Note, however, that spending does not necessarily track penetration. Though more SMBs used digital advertising, the majority of their budgets still went to traditional channels. In August 2009, The Kelsey Group found 36.8% of SMBs’ advertising budgets went toward online. That was up more than 14 percentage points over the prior year.

Total annual ad spending among SMBs was down, from an average of $2,734 in August 2008 to $2,092 in August 2009. Spending on Websites and online profile pages, however, was up more than 26% to $769.