Marketing Spending pays off for Small Biz.

Marketers have seen budgets slashed in the recession, but that can create a dilemma: More marketing spending in a downturn can help a company come out ahead when the economy picks up again. According to the “Small Business Marketing Health Check” report from Hurwitz & Associates, there is a correlation between small businesses that are doing well and greater marketing spending.

Almost two-thirds of small businesses that expected increased revenues had raised or planned to raise marketing spending, compared with just 32% to 36% of businesses with flat or declining revenues.

Less than one-half of small businesses studied (46%) were expecting higher revenues in 2009, while 22% anticipated flat revenues and nearly one-third foresaw a decline.

The survey showed small businesses shifting marketing initiatives toward cheaper digital media and away from traditional channels. The top three marketing tools used were social media, e-mail newsletters and search.

Use of e-mail marketing in particular correlated with expected revenue growth.

“The survey clearly reveals that the use of low-cost Web-based marketing tools is playing a strategic role in helping businesses succeed,” said Laurie McCabe, partner, Hurwitz & Associates, in a statement. “Making a few changes to incorporate more online tools into the marketing mix seems to be a key ingredient to small business success.”

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