Small Businesses Spending More on Online Advertising

Small businesses are investing more of their advertising dollars online instead of in traditional advertising venues, according to a survey conducted by Borrell Associates, a Williamsburg, Va.-based local advertising firm. Its 2011 Outlook survey asked 2,872 small and midsize businesses about their advertising budgets, and found that they plan to increase their online ad spending by 29 percent this year, compared to a 4.5 percent increase for their offline ad budgets.

Overall, small businesses don't typically dedicate a big chunk of their budgets to advertising -- the survey found that the average small business spends less than $12,000 on all advertising efforts, with approximately $2,300 of it going to online advertising. The areas of online advertising that small businesses plan to invest in the most are e-mail marketing campaigns and involvement with social media, as well as improvements to their company websites. Of the respondents surveyed, 86 percent reported having a website, a number that's expected to increase to 91 percent in 2011, according to the survey.

In terms of the overall online advertising picture, the survey found that small and midsize businesses make up 95 percent of all local advertising online, which has prompted companies like Google and Groupon to more aggressively target that market with their services in the past year.