Of the different media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, only two of the traditional media crack SMB’s top 10 most used media for advertising and promotion: newspapers and direct mail. The rest of the top 10 are filled with digital media.

In the chart below, I looked at eight of the traditional media from LCM. Newspapers and direct mail, the only two of the traditional media to crack the Top 10 most used media list, fall first and second among traditional media. Radio comes in third, with TV and outdoor bringing up the rear for usage.

But how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on traditional media? The traditional media with the highest usage, newspapers, had the lowest perceived ROI, while the ones with lower usage: TV, cable and outdoor, had the highest ROI among the traditional media.

TV had the highest perceived ROI among the traditional media, with 50% of SMBs rating it as either excellent (10-19 times return on that investment) or extraordinary (over 20 times the return), while only 13.7% of SMBs surveyed reporting using TV to advertise or promote their business.

Newspapers, which had the highest usage among the traditional media, had the lowest perceived ROI, with 26% of SMBs reporting returns as excellent or extraordinary.

Radio had the third highest usage among SMBs for advertising/promotion. But advertisers who used radio as part of their advertising mix reported being pleased with the results, as 36% rated the perceived ROI of radio advertising as either excellent or extraordinary.

For the first time in several survey waves, SMBs indicated that they are actually decreasing the number of media used to advertise or promote their business. The implication: media must deliver concrete ROI or risk losing business traction. Digital media penetration with SMBs has increased, as many of these solutions generate concrete leads and offer trackable ROI metrics.

Traditional media are far from obsolete, however, as the data suggests, and many are still well-regarded. However, for newspapers in particular, and all traditional media, as SMBs enjoy more digital options and demand clear value from their advertising spend, the need to produce clear ROI is stronger than ever.

More information about LCM and custom renderings of the data can be found here.

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2012 General Services Ad Spending by Media

But 2012 is the last year that Print Yellow Pages is expected to be on top in the General Services vertical. BIA/Kelsey expects Direct Mail to surpass Print Yellow Pages in this vertical in 2013. By 2017, Print Yellow Pages’ share of the General Services advertising pie is expected to fall to 11%, with Internet Yellow Pages’ share growing to 12%. BIA/Kelsey projects General Services’ advertising revenue on Internet Yellow Pages to surpass their Print Yellow Pages counterpart by 2017. Direct Mail will continue to be the dominant medium in the General Services vertical, with nearly 26% of the advertising revenue.

Health is the next biggest vertical for Print Yellow Pages advertising with 17% share. As advertising revenues for Print Yellow Pages decline, general services and health will remain the top two verticals for the medium.
By 2017, total Print Yellow Pages advertising revenue will have declined from nearly $5.5 billion in 2012 to $2.2 billion, a five year compound annual growth rate (CAGR) of negative 16.5%. All of Print Yellow Pages’ verticals are expected to have double digit declines between 2012 and 2017, with the biggest dollar loss coming from General Services.

Internet Yellow Pages, on the other hand, is expected to increase from less than $2.2 billion in 2012 to $3.3 billion in 2017, a five year CAGR of 9.0%, making Internet Yellow Pages the third fastest growing medium out of twelve, according to BIA/Kelsey’s Media Ad View Plus.

More information on Media Ad View Plus is available here.

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According to BIA/Kelsey’s Media Ad View Plus more than 43 percent, or $10.7 billion, of retail advertising dollars went to direct mail in 2012. That $10.7 billion represents 30 percent of direct mail’s total ad spending. Furthermore, BIA/Kelsey doesn’t expect that to change much by 2017, where retail is still projected to spend 43 percent, or $12.3 million, on direct mail.

2012 Retail Ad Spending by Media

So what types of retailers are spending money on direct mail? The largest spending retail specialty is warehouse clubs and supercenters, with $2.35 billion in spending on direct mail in 2012. This is more than double its closest competitor, discount department stores, which spent $1.1 billion.

What attracts retailers to direct mail over other media? According to direct mail companies, unlike ads on radio, television and newspapers, which go out to everyone in the market, direct mail can be targeted to a particular location or demographic, providing a better ROI. This could be valuable to brick-and-mortar retailers with fixed locations. Not everyone subscribes to a newspaper, watches TV, listens to the radio, or owns a computer or smartphone, but everyone gets mail.

The National Federation of Independent Business (NFIB) says that direct mail is an old-school marketing method that still works for small businesses. “Direct mail can be an effective part of any marketing campaign. Yes, email, Facebook and even Twitter work for some small businesses, but that doesn’t mean tried and true methods like direct mail should go by the wayside.”

According to BIA/Kelsey’s Media Ad View Plus, overall direct mail accounted for nearly $35.8 billion out of a total $132.2 billion in U.S. advertising dollars. That’s a whopping 27.1 percent of total advertising dollars, making it by far the largest media category. Newspapers, the next largest medium, accounted for 17.1 percent of total advertising dollars in 2012, followed by television in third place with 15.7 percent.

BIA/Kelsey expects this to change somewhat by 2017, with direct mail still on top with 25.1 percent of total advertising dollars, followed by television with 15.1 percent, with newspapers falling to third with 11.9 percent.

More information on Media Ad View Plus is available here.

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Yahoo is seeking to extend direct marketing budgets online via a new deal with DM giant Valassis, which claims 15,000 advertisers and reaches 114 million shoppers. The new effort adds another dimension to Yahoo’s local reachout, which currently focuses on newspapers and Yellow Pages. The Valassis relationship has the potential to bring its broadcaster and telco marketing affiliates into Yahoo’s fold as well.

The new deal marks an evolution of the local strategy, which seeks to be all embracing in efforts to win a higher percentage of local budgets for online, while also focusing on specific verticals, such as fast food.

In other local Yahoo news, paidContent reports that Yahoo has dropped some underperformers from its Newspaper Consortium. Yahoo told the newsletter that fewer than a dozen of its 800-plus newspaper members were involved.

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