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Though the majority of US small businesses plan to increase their use of email marketing and social media in 2010, more than half say they won’t do online banner advertising and nearly one-fourth won’t do search-engine marketing (SEM), according to a study by VerticalResponse, Inc.

The survey of 831 respondents at businesses with fewer than 500 employees found that 74% plan to increase email marketing and 68% will increase their use of social media marketing.

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Email, in particular, continues to demonstrate significant value to small businesses. Only 4% of respondents do not plan to use it in 2010.

On the other hand, the channels that small businesses plan to use the least in 2010 are TV and radio advertising. Nearly eight in 10 (80%) are not planning to use TV, and 73% will not use radio.

Small Biz Still Leery of Banners, SEM

The study results indicate that, despite comfort with email and social media, many small businesses are still very wary of newer online marketing channels? such as banner advertising and search-engine marketing (SEM). More than half (54%) of all respondents say they won’t do online banner ads in 2010 and 24% say they won’t do SEM, despite the fact that many view both advertising and SEM as important to their future success.

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Lack of Understanding?

VerticalResponse suggests that the relatively low levels of adoption and planned use of banner advertising and SEM present significant opportunities for vendor education in this area, to highlight the value that each channel brings – and how the two channels differ.”We’re encouraged that small businesses continue to allocate portions of their budget to marketing channels such as email and social media,” said VerticalResponse CEO and founder Janine Popick, though she also added that marketers might need to better assist small businesses in seeing the value of integrating search engine marketing – involving Google, Yahoo and Bing – into their campaigns.

Additional study findings

  • In terms of the most important tool for their businesses to succeed in 2010, survey respondents put SEM, advertising, web/graphic design and high-speed internet at the top of the list.? They also mentioned email marketing, public relations and social media marketing.

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  • Nearly one-fourth of small businesses that have 1-10 or 11-100 employees won’t do SEM in 2010. Of the businesses who are using this medium, only 4% of businesses with 1-10 staff and 3% of businesses with 11-100 will cut this channel or together or cut it down slightly in 2010.
  • In a further breakdown of the businesses who do not plan to do online banner advertising in 2010, 57%% of businesses with fewer than 11 employees and 48% of businesses with 11-100 employees will not use banners.
  • Online banner advertising spend did not increase much over 2009. Only 4.5% of smaller businesses increased it by “a little” in 2009, and 11.4% of businesses with 11-100 reported the same. Just 6.1% of businesses with 11-100 employees report they increased their online banner ad spend by “a lot” over the past year, and just 2.7% of businesses with fewer than 11 employees.

About the survey: Online surveys were taken over a six-week period starting September 22, 2009, and ending on October 29, 2009. Multiple-choice and open-ended responses were entered anonymously by VerticalResponse customers, and also filled in at the Small Business Development Center “Online Marketing Boot Camps” across California. The results have been split out into overall respondents; and include a comparison of the differences between small businesses with 1-10 employees, versus those with 11-100 employees. Further vertical breakdowns include the retail segment, which comprises 19% of respondents – and non-profits, which make up 11.2% of respondents.

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