SMBs to Increase 2010 Email Marketing, Social Media Spend

budgetEarlier this week, we shared the results of a study from VerticalResponse, Inc. that found that more than 25 percent of respondents would not cancel their health care if given a public option. But that was only half the survey. The rest of the survey quizzed SMB owners on their planned usage and spend for email marketing, social media, search engine marketing and online banner ads for the coming year of 2010.

Here’s a snapshot of where SMB owners said they would and would not be spending their budgets.

  • 74.1 percent will increase their email marketing spend.
  • 68.3 percent will increase their social media spend.
  • 23.8 will avoid search engine marketing.
  • 54.2 percent will not invest in banner advertising.
  • 79.6 percent will not run television ads.
  • 72.7 percent will be not run radio advertising.

I’m not sure whether it’s impressive or just intuitive that many SMB owners have canceled expensive marketing tactics like TV and radio in favor of the low-cost social media and email marketing. In fact, in 2010 more than 96 percent of SMBs owners will be running some type of email campaign, with almost 75 percent upping their spend this year. That’s a pretty big endorsement for something a lot of people feared was dead.

On the social media side, the increased spend signals that SMB owners are getting more comfortable and confident using the channel. According to the survey, 35 percent of all respondents say they plan to increase their use of social media “by a little”, while 33.3 percent plan to increase it “by a lot”. That’s nearly a 70 percent increase overall. Tools like Twitter and Facebook have given SMB owners an incredible way to connect with people that traditional media could never provide. Now that we’re starting to see real successes with proven ROI, social media isn’t the mystery it once was. As a result, business owners feel more confident allocating budget spend to these new areas.

One of the most interesting questions posed in the survey asked respondents to identify what they felt would be the MOST important tools for SMBs in the New Year. According to the survey:

  • Search engine marketing
  • Email marketing
  • Public Relations
  • Social Media

I thought it was pretty interesting that though search engine marketing was named the most important tool for success with 23.8 percent, an equal percentage said they wouldn’t be taking advantage of the paid search opportunities through the search engines in 2010. We’ve mentioned before the battle small businesses have with paid search and it doesn’t sound like it’s getting much better.  However, most businesses that are experimenting with paid search seem to be keeping their budgets as is – neither increasing nor decreasing their spend.

I was lucky enough to have a chance to look over the full study thanks to VerticalResponse PR Manager Jo Large and I was really surprised with what I saw. Small business owners aren’t just sticking with things like traditional banner ads or local radio spots. Instead, they’re digging into the cost-effective ways to get their message out there and connect with customers. They’re ramping up their email newsletters. They’re engaging and experimenting with social media. They’re looking outside the box for greater rewards. It’s just more proof something we already knew – SMB owners are incredibly savvy marketers.

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Lisa Barone Lisa Barone is Vice President of Strategy at Overit, an Albany Web design and development firm where she serves on the senior staff overseeing the company’s marketing consulting, social media, and content divisions.

17 Reactions
  1. Poor use of marketing dollars is the one of the single biggest problems for small businesses. This survey proves it. Focusing on the short term “cool factor” is the recipe for disaster.

    I have yet to see a small business have a clue in social media, whatever we throw in that category. E-mail marketing is a joke in most small business.

    So then, SMB hires ad agencies to help them, and abdicates the responsibility of managing that part of the business to agencies who are looking to their own success, and not the business owner. I’ve yet to find an agency yet that is truthful, honest, and worth the money they take out of my marketing budget.

    Get out of the mindset that “cool” works. Get into the mindset that finding new customers is important. Keeping old customers happy is best.

  2. It’s amazing that now there are so many FREE ways to advertise your business such as Facebook and Twitter! Why would you pay when Facebook generates much more traffic then a newspaper. It just depends on the clientele that you are aiming for!

  3. Lisa,

    I just switched over to a different email provider. It’s because they offer the coolest opt-in web forms on earth.

    eMail marketing is a focus of mine next year.

    {You ARE on my list of subscribers, right Lisa?)

    The Franchise King
    Joel Libava

  4. While social media and email are perceived as low cost, doing them right requires the investment of time and effort. Ray brings up a valid point that simply doing social media because it’s “cool” is a mistake. However, the investment to learn social media and email now will pay handsome returns in the future as consumers increasingly go online for information, not to radio, print and television.

  5. Re: Ray Massie’s comments, I agree that it seems like many companies miss the point with Social Media. I would argue that once you get past purely personal use (sharing pictures on facebook, etc.) the most frequent use of social media is to solve problems and get questions answered.

    If companies use social media simply as another way to deliver a PR/marketing message, they will alienate those users. Instead, why not bring in technical communicators and support engineers, and let them interact in this media? Customers and potential customers will get the information they need, and the PR/marketing message will get through much more strongly.

  6. We have just begun to focus on social media and e-mail as our main advertising strategy. However, while it is extremely appealing because of its relatively lower cost, most of you are right when you say the time and effort that goes into it to develop real returns is more then many would expect.

    I continually look for ways to “tweak” our social media presence so that we can find our most optimal position and I always have an ear open to great advice. So if anyone has any great tips I am all ears. Thanks

  7. I have tried Spread – email marketing software & service and work great!

    It’s a professional web-based Email marketing platform.

    I have already used it and maintain good relationship with clients. It’s also works for explore new customers.

  8. Great to see the statistics
    I’m not surprised that the statistics are skewed to outbound rather than in bound.
    I know in our small business , the more outbound email we do the more traffic we seem to attract.

  9. I’m still not convinced that small business really understands how to use social media effectively. And, as a recipient of a lot of email ‘junk’, I don’t think that too many businesses understand effective, and measurable, email marketing. No matter the cost (cheap or expensive), if marketing tactics are not well handled and implemented, there is no (or limited) benefit.

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  11. Social Media, especially Facebook, can be enormously effective for businesses with a big range of unique products to sell (since FB is a photos-oriented service). If you have got your brand right, and your products right, and your pricing right…smart use of Facebook can propel your business to global success in a couple of months. We’re achieving amazing results with our clients and I believe more and more small cool brands will be going global much faster because of social media.

  12. Maybe via the use of video in HTML emailing all media (radio, TV) will converge into one?