• by Aaron Baar , December 21, 2007

Meet the new media. Same as the old media--at least when it comes to small businesses.

According to an independent study commissioned by AT&T, the majority of small-business owners see directory advertising as their most effective marketing tool.

According to the survey of 1,000 businesses with 25 employees or less, nearly two-thirds (63%) still advertise in a printed directory.

In addition, 72% of those small businesses said they would spend the same amount on printed directory advertising in the coming year. Eleven percent said they would spend more. Nineteen percent said they would spend more next year on newspaper and magazine ads, which were cited as the second-most effective marketing tool by the small businesses.

While only about 23% of the respondents said they currently use online advertising (and two-thirds said they have their own Web sites), some 53% of them said they expected to buy online advertising featuring video over the next two to three years, according to the survey.

"Small businesses still see strong value [in directory advertising], but they're also eager to get online," Bob Mueller, executive director of business operations for AT&T, tells Marketing Daily. "The fact is, consumers are using all sorts of places to get their local information."

Obviously, AT&T, which publishes the well-known Yellow Pages directory, has a vested interest in the survey. But to eliminate bias, the company contracted Western Wats Data Collection Agency in Utah to conduct the survey, Mueller says.

The small-businesses survey is intended to back up research from The Kelsey Group, in which 61% of Americans say they still use a printed directory to find local information, Mueller says. That survey found that 13% of consumers used search engines to find local information, while 7% used Internet directories (e.g., Yellowpages.com).

The results of both surveys show that businesses and consumers looking for local information are still turning to the tried-and-true book. Mueller says. The top five categories for directory searches are: restaurants, physicians, auto parts suppliers, auto repair shops and pizza, Mueller says.

Accordingly, small businesses have intentions of moving more of their marketing dollars to Internet-based services. According to the survey, 20% said they expected to spend more on Internet directories, and 38% expected to spend more on Internet banner ads. When it comes to search-word marketing, 43% said they spent more this year than last year, and 34% said they expected to increase search word spending next year.