Small businesses spending more on marketing are also expecting increases in revenues. E-marketer also reports that businesses are shifting their budgets away from traditional to cheaper digital advertising, including social media and search engine marketing.

Another survey reported by Small Business Trends asked respondents to identify what they felt would be the MOST important tools for SMBs in the New Year. The top 4 responses were:

• Search engine marketing
• Email marketing
• Public Relations
• Social Media

According to the report, more than 68% of small business owners will be increasing their social media spending. This appears to indicate that small businesses are seeing positive ROIs and gaining confidence in using social media marketing to get results.

Posted via web from Kym Wong’s posterous

According to a Forbes/E-Marketer study however, the most effective online marketing tactic, for both small and large firms, is SEO or search engine optimization. This was followed by email marketing, then pay-per-click advertising.

The results are not surprising given that 88% of Internet search traffic flows through organic search results (Forbes) so the opportunity to attract more visitors and website traffic by ranking organically in the search engines is huge.

The downside is that it does take time (usually several months) to get a site ranked and the results are never guaranteed.  Organic rankings depends on a great number of factors, including back links to the website which can take time to accumulate. Link building is a gradual ongoing process that takes much time and effort.

Business owners who are willing to invest in the search engine optimization and marketing effort will reap significant rewards:

“Instead of spending advertising dollars on newspaper and magazine ads, focusing on acquiring more organic search traffic as a key pillar of advertising strategy should become mainstream in the next 12 months. Thus, I see organic as the next big frontier in online advertising” – Forbes 5/09