• by Shankar Gupta , July 21, 2005

Small and medium-size businesses plan to spend more money on Internet Yellow Pages advertising in the coming year, according to a recent study by the Kelsey Group and ConStat, Inc.

According to the study, "The Local Commerce Monitor," 8 percent of small and medium business advertisers plan to spend more on advertising in Internet Yellow Pages this year--a fourfold increase from last year, when just 2 percent said they intended to up their Internet Yellow Pages spending. The study was based on a survey of 300 small and mid-size business owners.

Kelsey Group Senior Vice President Neal Polachek said the increase is largely due to the sales channel that the IYPs have into the small business market--through their partnerships with local telephone companies, they are able to sell directly to small and medium businesses.

"For a long time, there's been this discussion of search engines that have the traffic, and the Internet Yellow Pages who have the channel, and the data suggests that the channel has a real impact on the marketplace," Polachek said. "You see it in terms of media use and you see it around 'likely to spend.'"

The study also found that broadband adoption among small and medium businesses is plateauing, after growing rapidly for the last three years. Adoption of broadband among small and medium businesses grew to 59 percent last year, from 53 percent in 2004 and 27 percent in 2002. "That rush to adopt broadband connectivity seems to have leveled off, at least in terms of businesses," Polachek said. "The businesses that want it got it, and the businesses that are on the fence just aren't prepared to go that way yet."