ANTenna Blog -- Business & E-Business

What's the best way for your small or midsize comapny to spend its marketing dollars: advertising or building out your company Web site? According to a new report, SMBs are voting with their balance sheets, as "non-advertising" efforts by SMBs is expected to triple in the next few years, while remaining a fraction of overall ad spending.

The report from Borrell Associates, called Main Street Goes Interactive: How small businesses are spending their online dollars, says SMBs spent a total of $6.8 billion online marketintg last year, and that figure is expected to grow to $7.4 billion by 2013.

The makeup of that spend is changing, however. Display ads on the Web now account for 54% of SMB online budgets, but the percentage of online marketing spend that goes to display ads is expected to fall significantly as companies triple their "non-advertising" Web investments to $1.63 billion by 2013.

Online Media Daily quotes the report stating: "The blurring borders between what is advertising in the interactive world and what is not added to the shift of 'non-ad' marketing dollars... Businesses large and smaller--but especially smaller ones--don't even try to make the distinction. To them, whatever they spend or do on the Web is advertising, whether it goes through an intermediary or not."

So spending on Web sites, online promotions, and interactive PR is expected to increase from 7.9% to 18.1% of total interactive marketing costs by 2013.

And the report suggests the continuing importance of search ads, while traditional online ads migrate to video. Traditional online banners, now 47% of online marketing buys, will shirnk to 19% by 2013. Meanwhile, so-called "non-advertising" spending is expected to grow from $600 million in 2008 to $1.6 billion in 2013.

Surprisingly, I didn't see any discussion of social networking in this mix. That could be a real opportunity to differentiate your small or midsize company from your competitors.