Small Businesses Say Ad Budget Cuts Hurt Business

 

A new Fed Ex Office survey shows that nearly one-third of businesses who cut advertising budgets in 2009 say it had a negative or extremely negative impact on their business results.

We knew that already – in fact, our most popular post of 2009 reported how reduced advertising negatively affects a consumer’s perception of a business. It’s good to see so many businesses realize the mistake of cutting the ad budget when times get tough.

This survey also shows that 51 percent of small business owners say their business has already recovered from the recession, or will fully recover this year. Seventy-two percent agree that small businesses will be the driving force behind the U.S. economic recovery.

On the budget side, 42 percent said they are considering increased advertising/marketing budgets in 2010. Nearly two thirds of respondents say they think traditional marketing and advertising is more effective than online marketing and advertising:

• Traditional marketing & advertising:  61%
• Web-based marketing & advertising:  39%

Despite feeling traditional methods are more effective, these businesses are spreading their marketing/advertising budgets around. Here is where they will focus the most resources this year:

• Traditional advertising:  14%
• Web-based marketing/advertising:  32%
• Printed materials (e.g. newsletters, direct mail):  24%
• Split evenly between the three:  31%

We know we’re preaching to the choir about the importance of advertising. If anyone understands how key it is to continued business success, it’s the media sales people who see what effective advertising can do every day. Consider this survey one more piece of data you have to back you up when a prospect or advertiser says the economy is too bad to spend money on advertising.

[Source:  Signs of the Times Small Business Survey. FedEx.  Spring 2010. Web. 29 Jun. 2010]