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Business Dollars to Shift from Traditional to Emerging Media by 2015

08 Sep 2011

A new report says small- and medium-sized businesses will continue to shift marketing dollars away from traditional outlets to more measured and emerging media. By 2015, the group will be spending 30 per cent of their budgets in the so-called traditional realm -- down from 52 per cent last year, according to BIA/Kelsey.

The bulk of their dollars will be spent in the digital arena -- stretching from mobile platforms to social media to online directories, as well as performance-based commerce such as couponing and customer-retention marketing such as email.

The report focuses on local-market spending, where BIA/Kelsey projects overall "media, marketing and business solutions" investment to grow from $22.4 billion in 2010 to $40.2 billion in 2015, a 12 per cent compound annual growth rate.

Traditional ad spending over the period should be largely flat -- from $11.8 billion to $12.1 billion, a compound annual growth rate (CAGR) of 0.6 per cent.

Digital online spending should experience a CAGR of 24.9 per cent, with its $16.6 billion in 2015 eclipsing traditional media. Performance-based commerce and transaction platforms are projected to increase by a 21.5 per cent CAGR to $4.6 billion, while customer-retention investment is forecast to have a 14.6 per cent CAGR and increase to $6.9 billion in 2015.

Groupon and Living Social have offered a new venue that can chip away at traditional dollars, according to Neal Polachek, BIA/Kelsey president.

"With the advent of daily deals to drive customer acquisition, [small- and medium-sized businesses] are now increasingly focused on leveraging technological solutions to engage, grow and retain a higher percentage of their customers," he stated.

Conversely, Google executive chairman Eric Schmidt took exception to the much-discussed concept of dollars shifting from traditional to new media at an industry event, suggesting the pie can grow rather than be carved up differently.

Source: MediaPost


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