• by Jack Loechner , Staff Writer @mp_research, September 5, 2011

According to a new U.S. SMB Spending Forecast by BIA/Kelsey, 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

SMBs will allocate 30% of their marketing budgets to traditional advertising by 2015 (down from 52% in 2010), with the remaining 70% going to:

• Digital/online media (mobile, social, online directories, online display, digital outdoor)
• Performance-based commerce (pay-per-click, deals, couponing)
• Customer retention business solutions (email, reputation and presence management, websites, social marketing, calendaring/appointment-setting)

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 of 12%.

Advertising & Marketing Spending by U.S. SMBs ($ in Billions)
Media	2010	2015	Growth (CAGR)
Total	$22.4 B	$40.2 B
Traditional Media	$11.88	12.18	0.6%
Online digital media	5.4	16.6	24.9
Commerce	1.7	4.6	21.5
Solutions	3.5	6.9	1.6
Source: BIAKelsey, August 2011

Neal Polachek, president, BIA/Kelsey, says "With the advent of daily deals... SMBs are now focused on leveraging technological solutions... these SMBs will turn to outside providers... media companies as well as pure-play technology providers... "

And Mark Fratrik, vice president, BIA/Kelsey, concludes that "Traditional media companies and new upstarts... building products and solutions in... digital display, SEM/SEO, email marketing, calendaring, and other acquisition and retention tools... (can) take full advantage of this substantive change in the overall SMB landscape."

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, and will be presented at its upcoming conference, DMS '11: The Summit for Small-Business Advertising Solutions, on Sept. 20-22.

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