Research by Borrell Associates predicts that by the end of 2013, local online advertising expenditure by small-to-medium (SMB) U.S. businesses will grow by almost 34 percent from 2008 levels.

Furthermore, companies involved in local online marketing will invest almost 70 percent of their online ad budgets on paid search and video.

Borrell Associates’ ‘Main Street Goes Interactive’ report predicts that there will big increases in online ad spending by SMBs, with nearly a 275 percent increase in streaming audio and video ad spending, almost an 140 percent increase in email and direct ad spending, nearly a 35 percent increase in paid search spending, and an 8 percent increase in standard display ad spending.

The Borrell Associates report indicates significant growth opportunities within the SMB sector. While some SMBs, such as real estate firms and computer service stores currently invest 30-45 percent of their advertising budgets on Internet marketing, the average SMB spends just 11 percent. Yet, this is almost three times the 4 percent it was just a few years ago.

While SMBS are set to invest more in Internet marketing, they will spend less on traditional local advertising. Borrell Associates estimates that by 2013, spending on standard format local ads will drop by over 78 percent.

Source: Fred Aun, “Local Small Business Interactive Ad Market Shows Promise,” ClickZ, March 18, 2009

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