BIA/Kelsey has put out a new U.S. spending forecast, saying that 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.
By 2015, the forecast says, SMBs will allocate 30% of their marketing budgets to traditional advertising (down from 52% last year), with the remaining 70% going to digital/online media (including: mobile, social, online directories, online display, and digital outdoor), performance-based (PPC, deals, coupling) and customer retention business solutions (email, reputation and presence management, websites, social marketing, calendaring/appointment setting).
“With the advent of daily deals to drive customer acquisition, SMBs are now increasingly focused on leveraging technological solutions to engage, grow and retain a higher percentage of their customers,” said Neal Polachek, president, BIA/Kelsey. “As this trend accelerates, these SMBs will turn to outside providers — media companies as well as pure-play technology providers — to harness simple tools, which will enable them to maximize the long-term value of each new customer they acquire.”
“Our forecast clearly indicates that the allocation of SMB advertising and marketing dollars for acquiring and retaining customers will both shift and grow over the next five years,” said Mark Fratrik, vice president, BIA/Kelsey. “Traditional media companies and new upstarts that are actively building products and solutions in the areas of digital display, SEM/SEO, email marketing, calendaring, and other acquisition and retention tools will be in a good position to take full advantage of this substantive change in the overall SMB landscape.”
Here are the key findings from the forecast:
– Overall, 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 (CAGR) of 12 percent.
– SMB spending on traditional advertising will be essentially flat during the forecast period, experiencing a 0.6 percent CAGR, from $11.8 billion in 2010 to $12.1 billion in 2015.
– SMB spending on digital/online media will grow from $5.4 billion in 2010 to $16.6 billion in 2015 (24.9 percent CAGR).
– SMBs will also increase spending on performance-based commerce and transaction platforms, from $1.7 billion in 2010 to $4.6 billion in 2015 (21.5 percent CAGR).
– Spending by SMBs on customer retention business solutions will grow from $3.5 billion in 2010 to $6.9 billion in 2015 (14.6 percent CAGR).
The firm will present the forecast at its upcoming Summit for Small-Business Advertising Solutions.