The online marketing services support industry contains a vast array of players, but Borrell Associates, in an October 2012 report has generalized them down to a more accessible list, and has estimated that 51.7% of North American small and medium size business (SMB) online marketing service dollars are spent on the web presence category. This represents $202 billion in spending in 2012, and includes such services as website design and management, hosting, and social media management.
All other online marketing services hover around 12% share of the $390.5 billion market. Online ad production takes 12.9% of the dollars, with online agency and exchange fees representing about half that spend.
Another 12.1% (or $47.3 billion) goes to online consulting and research, which, as the researchers observe, is more than is typically spent on radio and newspaper advertising combined.
Online public relations grabs 12 cents off every online marketing service dollar, and includes services like press release distribution and managing and nurturing opt-in lists.
Finally, 11.3% goes toward online marketing support, almost entirely spent on search engine optimization (SEO) from companies like Yodle, ReachLocal, Local.com and GoDaddy.
Social Media Management Spend Fractional
Of the 3 categories that make up the web presence piece of the equation, web hosting takes fully 63% of the $202 billion pie, and design and maintenance, 35.8%. Social media management, for all the buzz, accounts for just 0.4% share, or $809 million, and 0.2% of all web marketing services.
This suggests that while many SMBs might be ramping up their use of social media, they are reluctant to bring in external partners, or that services are concentrated among smaller businesses. Indeed, as the Borrell report notes, “larger companies will either assign SEO and social media management tasks to existing staff, or hire fulltime experts in digital marketing.” The smaller businesses – who presumably also have smaller budgets – are projected to still remain in play for agencies and others for some time.
SMBs Spend Far More on Services Than Advertising
Interestingly, the Borrell Associates study, “What SMBs Spend on Digital Marketing Services,” reveals that the average US business is far more interested in spending on online services than online advertising and promotions. On average, they spend $17,000 on online services (or 72% of their average online marketing spend). Online advertising accounts for just 12.4% of their spending, and online promotions 15.6%.
About The Data: The Borrell Associates data reflects revenues received by local media companies, and advertising spent by local businesses. Data includes an estimate of online ad spending by more than 23 million U.S. and Canadian companies, by Standard Industrial Code (SIC), across all media channels, and an estimate of online ad receipts by 5,756 US and Canadian online media companies that participate in Borrell surveys.