» SMBs and Local Internet Advertising

People are turning to the search engines more and more to search for “local” service providers, ranging from cosmetic dentists to cosmetic skin care, electricians to home remodelers.

Most of us deal with companies and businesses within a few miles of where we live, especially with the current state of the economy. It’s cheaper to shop local.

Just building a website is not enough anymore to succeed online. It is now crucial for any business hoping to expand their reach to have a high Internet presence that is aimed at targeting their local customers.

Effective Local Online Advertising involves a professionally built website, a Local Search Engine Marketing Campaign, and someone that can manage both of these efforts. Below is an interesting article on internet Ad Spending from SMBs by Melinda Gipson from Burrell Associates.

“In the last three years, Internet spending by SMBs has nearly tripled from 4 percent of sales to 11 percent. So says the latest Borrell Associates report “Main Street Goes Interactive.” But, while the collective heft of such businesses, numbering more than 14.6 million in the U.S., has tantalized numerous locally-targeted Internet marketing services who are deluging them with offers, Borrell warns, “the SMBs in any market are less like a two-ton gorilla and more like 1,000 four-pound monkeys – difficult to chase down and impossible to corral.”

The good news: such offers have this market’s attention. The bad news, they’re much less receptive to buying banner advertising (now 54 percent of their Internet spend, but declining in share), and more amenable to search engine advertising, online directory listings and streaming video. Rather than spend more on what publishers might define as advertising, they’re upping their budgets on site design, search engine optimization and customer databases.
By the numbers, in 2008 SMBs:

• Were responsible for $6.9 billion in locally-generated, locally targeted Internet advertising – more than half the U.S. total;
• Smaller merchants spent less than $300/ea on Web site support, but this expenditure will triple again in just a few years, Borrell predicts.

“SMBs are collectively poised to plow billions of dollars into their own Web sites,” but they appear to be extremely results oriented and have grown leery of Internet products that are “oversold and under-perform.”

The report is chock-full of insights on what kinds of SMBs are spending more online than their peers, by category of business (hint: general merchandise stores, auto marketing and Real Estate Services together account for 70 percent of all local online ad spending.) Pure-plays like Yahoo and Google control almost half of all local interactive ad spending by SMBs, irrespective of their size. Newspaper-owned interactive units follow in rank with a 28 percent share. In 2004, newspapers’ share was 50 percent and portals hovered around 20 percent, so these marketers’ roles are nearly reversed, even as the competition for attention heats up.

As Borrell puts it, “All in all, our interactive Main Street may look quiet, but when it comes to local interactive ad spending, it’s where the action is.”