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Younger Businesses More Aggressive Online

Small and medium-sized businesses that are less than 10-years-old use online media for advertising more frequently than older business. However, neither is embracing local paid search with any real vigor, according to analyst firm The Kelsey Group, which released its findings during a presentation at the Yellow Pages Association Annual Conference in Orlando, FL.

Some possible explanations for why younger SMBs are embracing online media include the fact that they don’t have a “legacy investment in traditional media,” which “may free them to make different choices,” said The Kelsey Group’s Charles Laughlin, senior vice president, program director and managing editor.

With regard to paid search, the issue is one of complexity, Mr. Laughlin said. “There is still very little sales outreach for paid search,” he said, adding that some organizations, particularly in the Yellow Pages industry, are offering fixed-priced products designed to make the process simpler and less intimidating for small business advertisers.

Younger SMBs also spend more overall on advertising and promotion than their older counterparts, according to the study. Of the SMBs surveyed by The Kelsey Group as part of the firm’s ongoing Local Commerce Monitor study, those in business less than 10 years allocate an average of $6,246 of their annual operating budgets to advertising and promotion while those in operation 10 to 20 years spend $4,198.

The data suggests that younger businesses should be getting more attention from media marketers, The Kelsey Group’s senior vice president of research and consulting Neal Polachek said in a statement.

The younger SMBs also plan to be more aggressive in the future than their older counterparts, according to the study, with 17 percent of SMBs in business less than 10 years planning to increase spending on advertising and promotion in the next one to two years and only 12 percent of SMBs in business over 10 years planning to do the same.

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