July 25, 2010

Higher-spending small and medium-sized business advertisers use 6.5 different media on average in their promotional mix, compared with 3.1 different media used by the broader SMB advertiser population, according to findings from the first wave of BIA/Kelsey's LCM: SMB Plus Spenders study. This survey is an extension of BIA/Kelsey's ongoing Local Commerce Monitor study conducted annually with research partner ConStat. The LCM: SMB Plus Spenders survey addresses a higher spending bracket of SMBs -- those spending at least $25,000 annually on media advertising and promotion. This is a considerably higher spending level than the core LCM population, which spends on average $2,000 to $3,000 annually on advertising.

"We launched this survey in response to the numerous inquiries from key players in the local, social and geo media space, who are seeking to better understand the behaviors and needs of higher-spending SMBs," said Neal Polachek, president, BIA/Kelsey.

Findings from the LCM: SMB Plus Spenders survey indicate these higher-spending SMBs:

-- Have Web sites: A full 90 percent of SMB Plus Spenders have a Web site, versus 62 percent of core Local Commerce Monitor SMBs.

-- Use more types of online media, and spend more for online advertising: In the past 12 months, Plus Spenders spent 26 percent of their total ad budget on online media, versus 21.8 percent for core LCM SMBs, a difference of 4.2 points.

-- Spend an appreciable amount of their total budget on broadcast media: 16.1 percent of their budget is allocated to broadcast media compared with 1.3 percent for all SMBs.

-- Focus on media performance in making media buying decisions: 40 percent rated "demonstration of ROI" as the first or second most important service that a vendor of online advertising can provide.

"SMB Plus Spenders are more performance-oriented in making their media purchase decisions and do a considerable amount of lead tracking," said Steve Marshall, BIA/Kelsey research director. "This group of SMBs, with its digital media savvy and use of more media categories, represents the sweet spot for many companies developing and delivering local advertising solutions."

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