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Online, Direct to Grow as 26% of Small Biz Ups Ad Spending

Though 97% of U.S. small-business owners have some degree of concern about today’s dismal economy, 26% plan to spend more on advertising - especially online and direct - and another 60% plan to spend about the same as in 2008, according to a report from Ad-ology Research.

The “Ad-ology Small Business Marketing Outlook” survey found that though 25% of owners of small businesses with less than 100 employees are fearful about the current economic situation and 58% are concerned, they are also cautiously optimistic, writes Marketing Charts. Some 83% expect 2009 sales to be up or about the same as 2008.

In terms of 2009 spending on various media types, more than half of small business advertisers plan to spend the same or more on the following: Online advertising (69%), Yellow Pages (54%), newspapers (51%), and direct mail (51%).

The biggest factors for small-business owners in making the decision to select specific advertising vehicles are rates (50%), proximity to business prospects (48%) and doing what the company has always done (41%).

Despite plans to increase spending in some areas, the research also reveals that small-business owners are increasingly questioning whether mass media advertising effectively reaches their desired audience. These advertisers understand the importance of being top-of mind with their customers, and they agree that advertising plays a crucial role in the future of their businesses. But most (78%) think referrals are their best source for new customers and only 37% think the best way to deliver their marketing message is “to as many people as we can.”

Broken down by specific media, 44% of respondents ranked online advertising as effective, followed by direct mail (32%), Yellow Pages (28%), and newspapers (27%).

About the research: The survey was conducted by Ad-ology Research via an online panel of 863 owners of US businesses with less than 100 employees in October 2008. The Small Business Marketing Outlook report is available for purchase at http://www.ad-ology.net.