Ad spending is dropping for Core* SMBs according to BIA/Kelsey’s Local Commerce Monitor™ (LCM) survey. BIA/Kelsey research director, Steve Marshall attributes the drop to two main causes:

1. Increased use of digital media
2. Increased use of social media

Though we’ve tracked steady growth in SMB digital ad spend, social media is now used by nearly 3/4 of the core sample. This puts downward pressure on ad spend, as much social media marketing for SMBs is free (notwithstanding time spent or employee costs).

Marshall believes the spend deflation will continue as free or inexpensive DIY options become increasingly popular. Bottom line: The deflation will put pressure on sales and distribution, which will need to be rethought to align with lower spend levels.

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BIA/Kelsey’s LCM, Wave 18 reports can be viewed and downloaded by clients here, or purchased a la carte in the new BIA/Kelsey eStore. Wave 19 coming soon.

* Core SMBs are those small and medium businesses in our survey who spend less than $25,000 annually on advertising and promotion.