Digital Advertising, Performance and Retention Solutions Will Be 70% of SMB Marketing Budgets by 2015
New 'U.S. SMB Spending Forecast' will be presented to attendees of the upcoming DMS '11: The Summit for Small-Business Advertising Solutions, Sept. 20-22, in Denver
CHANTILLY, Va. (Aug. 30, 2011) -Small and medium-sized businesses
will continue the recent trend of shifting their marketing budgets
to digital advertising, performance-based platforms and customer retention
business solutions over the next five years, according to a new U.S.
SMB Spending Forecast by BIA/Kelsey. This trend creates an increasingly
large market opportunity for businesses serving SMBs and developing
By 2015 SMBs will allocate 30 percent of their marketing budgets
to traditional advertising (down from 52 percent in 2010), with the
remaining 70 percent going to digital/online media (mobile, social,
online directories, online display, digital outdoor), performance-based
commerce (pay-per-click, deals, couponing) and customer retention business
solutions (email, reputation and presence management, websites, social
“With the advent of daily deals to drive customer acquisition,
SMBs are now increasingly focused on leveraging technological solutions
to engage, grow and retain a higher percentage of their customers,” said
Neal Polachek, president, BIA/Kelsey. “As this trend accelerates,
these SMBs will turn to outside providers — media companies as
well as pure-play technology providers — to harness simple tools,
which will enable them to maximize the long-term value of each new
customer they acquire.”
BIA/Kelsey’s U.S. SMB Spending Forecast is derived from the firm’s
U.S. Local Media Annual Forecast and its proprietary Local Commerce Monitor
study, which tracks the advertising and marketing spending habits of SMBs.
The forecast’s key findings include:
- Overall, U.S. SMB spending on media, marketing and business solutions
will grow from $22.4 billion in 2010 to $40.2 billion in 2015, representing
a compound annual growth rate (CAGR) of 12 percent.
- SMB spending
on traditional advertising will be essentially flat during the forecast period,
experiencing a 0.6 percent CAGR, from $11.8 billion in 2010 to $12.1 billion
- SMB spending on digital/online media will grow from $5.4
billion in 2010 to $16.6 billion in 2015 (24.9 percent CAGR).
will also increase spending on performance-based commerce and transaction
platforms, from $1.7 billion in 2010 to $4.6 billion in 2015 (21.5 percent
by SMBs on customer retention business solutions will grow from $3.5 billion
in 2010 to $6.9 billion in 2015 (14.6 percent CAGR).
“Our forecast clearly indicates that the allocation of SMB advertising
and marketing dollars for acquiring and retaining customers will both shift
and grow over the next five years,” said Mark Fratrik, vice president,
BIA/Kelsey. “Traditional media companies and new upstarts that are actively
building products and solutions in the areas of digital display, SEM/SEO, email
marketing, calendaring, and other acquisition and retention tools will be in
a good position to take full advantage of this substantive change in the overall
BIA/Kelsey will present its new U.S. SMB Spending Forecast to attendees of
its upcoming conference, DMS ’11: The Summit for Small-Business Advertising
Solutions, which takes place Sept. 20-22 in Denver. DMS ’11 is focused
on how marketing services and solution providers can increase their penetration
and profitability with SMBs.
The DMS ’11 program features more than 50 senior executives from across
the small-business marketing solutions marketplace, including headliners Rita
Fabi, head of market solutions, global customer marketing and communications,
Facebook; Joe Walsh, president and CEO, Yellowbook; Clare Hart, CEO, Infogroup;
Pat Hays, vice president of global search and display services, Microsoft;
and Ben Smith, founder, MerchantCircle.
Conference sponsors include 3L System Group, Acxiom, Amdocs, Hostopia, Infycosm,
Kenshoo Local, Local Matters, Localeze, Location3 Media, Marchex, Moon Valley,
Telmetrics, TrafficMedia and vSplash. Association partners include the Association
of Directory Publishers and the Local Search Association. Media partners include
BIG Marketing for Small Business, ConferenceGuru.com, Search Marketing Standard
Magazine, Street Fight, Topseos and Visibility Magazine. For more information
about DMS ’11, including the complete agenda, list of speakers and companies
attending, visit www.biakelsey.com/DMS2011.
BIA/Kelsey advises companies in the local media space through consulting
and valuation services, research, Continuous Advisory Services and
conferences. Since 1983 BIA/Kelsey has been a resource to the media,
mobile advertising, telecommunications, Yellow Pages and electronic
directory markets, as well as to government agencies, law firms and
investment companies looking to understand trends and revenue drivers.
BIA/Kelsey’s annual conferences draw executives from across industries
seeking expert guidance on how companies are finding innovative ways
to grow. Additional information is available at www.biakelsey.com,
on the company’s Local
Media Watch blog, Twitter (http://twitter.com/BIAKelsey)
and Facebook (http://www.facebook.com/biakelsey).
For more information contact: