VerticalResponse, Inc. Surveys the State of Small Business in America; Reports on Planned Marketing Spend for 2010

Over two-thirds of 831 respondents report that they plan to increase their use of both email marketing and social media in 2010; 54.2 % surveyed won’t do online banner advertising in 2010

SAN FRANCISCO, November 17, 2009 — VerticalResponse, Inc., a leading provider of self-service email marketing, online surveys and direct mail solutions for small businesses, today releases the results of a survey of 831 small businesses of under 500 employees, which showed that 74.1% of respondents plan to increase their use email marketing and 68.3% will increase their use of social media in 2010.

The survey reveals that small businesses intend to continue their marketing spend in the email marketing channel. Only 3.8% of respondents do not plan to use email marketing in 2010, which indicates that the channel continues to demonstrate value to small businesses.

Conversely, the channels that respondents plan to use least in 2010 are television and radio advertising. The majority, 79.6% are not planning to use TV, and 72.7% of small businesses will not use radio advertising.

The results also highlight that small businesses are wary of channels such as online banner advertising and search engine marketing. Over half—or 54.2 percent—of all respondents stated they won’t do online banner advertising in 2010, versus just 23.8% of respondents won’t do SEM such as Google, Yahoo and Bing next year. This presents a huge potential opportunity 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, despite the downturn in the economic climate,” said VerticalResponse CEO and founder Janine Popick. “VerticalResponse has long been an advocate for promoting new marketing tools to small businesses through educational webinars and blog posts—but this survey highlights that while small businesses are learning the value of social media, marketers need to help small businesses to see the value of integrating search engine marketing such as Google, Yahoo and Bing into their campaigns.”

Among key findings, VerticalResponse reports*:

Social media and email marketing spend continues to rise in 2010 as small businesses see the value of these low-cost options.

• Well over two-thirds of respondents report that they plan to increase their use of email marketing and social media in 2010.
• Email marketing continues to prove its worth to small businesses, as 96.2% plan to use email marketing in 2010.
• Plans reported for 2010 indicate the email marketing industry will continue to thrive next year, with 38.9% businesses of 1-10 employees and 34.1% of businesses with 11-100 employees planning to increase their email marketing by a lot in 2010.
• Small businesses are getting more comfortable with social media, when reporting marketing plans for 2010, 35.1% of all respondents say they plan to increase their use of social media by a little and 33.3 % plan to increase it by a lot.

Search engine marketing (SEM) and online banner advertising spend: Plans to spend for the next year showed a marked difference between the two mediums.

• Over half—or 54.2 percent—of all respondents stated they won’t do online banner advertising in 2010, versus just 23.8% of respondents won’t do SEM such as Google, Yahoo and Bing next year.
• Almost a quarter of small businesses of 1-10 and 11-100 employees won’t do search engine marketing in 2010. Of the businesses who are using this medium, only 4% of businesses with 1-10 staff and 3.3% of businesses with 11-100 will cut this channel or together or cut it down slightly in 2010.
• A large portion of businesses do not plan on online banner advertising in 2010—represented by 56.6% of businesses under 11 staff and the 48.2% of businesses with 11-100 employees not planning on banner advertising.
• Online banner advertising spend did not increase much over 2009—with only 4.5% of smaller business increasing this by a little in 2009, and 11.4% of businesses with 11-100 reporting the same. Just 6.1% of businesses with 11-100 employees reporting they increased their online banner advertising spend by a lot over the past year, and just 2.7% of businesses with less than 11 staff.

The most important tool for small businesses to succeed in 2010: Search engine marketing, email marketing, public relations and social media cited as crucial for success.

• 23.8% of all small businesses reported that search engine marketing was the tool most needed for their business to succeed in 2010.

The survey responses truly represent the heart of the small business community, with over three-quarters of respondents indicating that their company has between 1 and 10 employees—this group was 76.5% or 632 of the total 831 respondents. This category includes a number of sole proprietor businesses indicating that entrepreneurs continue to flourish despite the economic climate. The remainder of the respondents included 19 percent who have between 11-100 employees and just 4.4 percent of respondents with 101-500 employees. VerticalResponse used its own survey tool, launched in April 2008, to deliver multiple choice and free-form answers to a subset of its users, and the small business community.

Methodology

Surveys were taken over a six-week period starting September 22, finishing on October 29. They were entered in anonymously by VerticalResponse customers, and also filled in at the Small Business Development Center "Online Marketing Boot Camps" across California. The questions were focused on hot topics such as proposed healthcare reforms, current and future marketing spend for channels such as social media and email marketing, and attempts to gain funding. The survey included a number of freeform options, which are included in the individual summary reports.

In addition, 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 percent of respondents—and non-profits, which make up 11.2 percent of respondents.

*For complete survey results, contact jlarge@verticalresponse.com or call 415.808.2457.

To find out more, please visit: www.verticalresponse.com.

About VerticalResponse

VerticalResponse, Inc. is a leading provider of self-service email marketing, online surveys and direct mail services empowering small businesses to easily create, manage and analyze their own direct marketing campaigns. VerticalResponse’s flagship product is the Small Business Stimulus Package, which bundles email, online surveys and postcards to offer customers an integrated Web-based direct marketing solution that’s intuitive and affordable. VerticalResponse is headquartered in San Francisco, California. For additional information, please visit www.verticalresponse.com