How Much do SMBs Spend Online?

The recent Boston Consulting Group study done in cooperation with Yelp, raises many questions about SMB online ad spend and presence. We want to comment on the key top-level metric they reported: Three percent of their [SMBs] advertising budgets flows online.

Some subsequent commentators have interpreted this finding as narrowly referring to online display ads, although it is hard to tell exactly what definitions were used, and what response options were presented to survey participants (as well as the make-up of the sample).

BIA/Kelsey has been surveying SMBs and their use of media for advertising and marketing purposes since 1999. In our most recent LCM (Local Commerce Monitor) survey* of SMBs spending less than $25,000 annually on advertising and promotion, SMBs reported spending on average about 28% of their total advertising and promotion budget for digital/online media. (This is using the broadest definition of digital/online media, including banner/display ads, search, social media, online video, and mobile media).

Within the total digital/online spend (above) we found that spending for online banner/display ads was 1.7%, and spending for mobile banner/display ads was an additional 0.8%.

*LCM Wave 16 performed in Q3 2012, using a sample of 300 US SMBs, drawn from a cross-section of business and market types. SMBs all belonged to online panels, from which the respondents were drawn. The accuracy of this finding at the top level is +/- 5.7% at the 95% confidence level.