SMBs are hesitant to increase marketing budgets

2/21/2011

While small businesses lending practices are enabling entrepreneurs to gain access to more funds, they don't intend to spend their resources on marketing, a new report from MerchantCircle indicates.

Most businesses plan to spend less than $2,500 this year on marketing. Meanwhile, nearly two-thirds of respondents said they have no intention of boosting their advertising budgets this year, and are instead looking to extend their budgets by experimenting with cost-efficient platforms. More than one-quarter of entrepreneurs (26 percent) said high price points were their biggest complaints with online marketing.

"Online marketing continues to be a challenge for most local businesses, and many merchants are working with very small budgets and almost no marketing resources," said Darren Waddell, vice president of marketing at MerchantCircle.

Many small businesses leverage Facebook for their online marketing campaigns because it is relatively inexpensive to use. Advertising Age recently reported that, according to statistics provided by eMarketer, small companies accounted for 60 percent of the $1.8 billion that Facebook generated from the sales of advertising space in 2010.