Penetration of Online Media surpasses Traditional Media among Small-Business Advertisers.

For the first time, the penetration of digital/online media has exceeded that of traditional media among small and medium-sized business advertisers, according to The Kelsey Group. Findings from the latest wave of BIA/Kelsey’s Local Commerce Monitor study, conducted with research partner ConStat, indicate the penetration of digital/online media increased from 73 percent in August 2008 to 77 percent in August 2009, while that of traditional media decreased from 74 percent to 69 percent during the same period. Penetration is defined as the percentage of SMBs using a given type of media, irrespective of spending level.

“We have been tracking the trend of digital/online media replacing traditional media over four waves of the Local Commerce Monitor study,” said Steve Marshall, director of research, The Kelsey Group. “The milestone of digital/online surpassing traditional media among SMBs is an indicator of the broad shift to online platforms.”

Local Commerce Monitor Wave XIII also revealed a decrease in overall ad spending by SMBs, owing to unfavorable economic conditions and the long-term substitution of traditional media with lower-cost digital/online media. According to the study, SMBs decreased spending on advertising and promotion by 23.5 percent, from $2,734 (reported in August 2008) to $2,092 (reported in August 2009). As a percentage of total advertising for the SMBs surveyed, digital/online has increased from 22 percent to 36.8 percent over the past year. In spite of the overall decrease in spending on advertising and promotion over the past 12 months, on average, SMBs increased spending on Web sites and profile pages by 26.8 percent, from $608 in 2008 to $769 in 2009.

According to the study, there has also been an increase in the proportion of SMBs that use the Internet to track or measure their sources of new business leads. Of businesses that track lead sources, the percentage that does so using the Internet (clicks or e-mails) has increased from 22 percent in 2008 to 30 percent in 2009.

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