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March 8, 2004

Pay-per-Click on the Rise Among Small-Business Advertisers, According to The Kelsey Group and ConStat

Recent survey indicates small-business PPC advertisers currently allocate 23% of their total ad budget to PPC, with more than half planning to increase PPC activities next year.

Princeton, NJ (March 8, 2004) – A new survey of small-business advertisers conducted by The Kelsey Group and ConStat, Inc. reveals that pay-per-click (PPC) advertising is capturing a significant percentage of promotional dollars among small and medium-sized enterprises (SMEs) that have integrated it into their marketing mix. Small-business PPC advertisers currently allocate on average 23% of their total advertising budget to PPC activities, with 54% of these SMEs expecting to increase their PPC spending next year.

"These data show that PPC is an increasingly important part of an SME's overall advertising program," said Greg Sterling, director of The Kelsey Group's Digital Directories: Interactive Local Media Continuous Advisory Service. "PPC's appeal is based in large part on the perception that it's a low-cost means of customer acquisition."

"For this market to fully develop, that perception of low-cost customer acquisition must ultimately be demonstrated over time," added Neal Polachek, senior vice president of The Kelsey Group.

A summary of top-line findings from The Kelsey Group/ConStat survey includes:

  • SME pay-per-click advertisers currently allocate on average 23% of their ad budget to PPC
  • 54% of SME pay-per-click advertisers expect to increase their PPC activities next year
  • 56% of SME pay-per-click advertisers believe in its potential and agree that it will be an important advertising method for their company in the future
  • 73% of SME advertisers who are interested in PPC expect to implement it within the next year

The data for this research was collected through an online survey of 460 advertising decision makers at SMEs with a Web site. Of those respondents, 11% were current users of PPC and 34% were "interested in" using PPC. Any interpretation of survey results should be seen as directional and not reflective of the current behavior of the U.S. small-business population as a whole.

Detailed results from this survey will be presented at The Kelsey Group's upcoming conference, "Drilling Down on Local Search: Drivers & Barriers to SME Adoption," taking place March 30-31 at the Santa Clara Marriott, Santa Clara, California.

Also at the conference, The Kelsey Group will present results of research currently being conducted exclusively among paid search advertisers, which is expected to provide more insight into their experiences and attitudes.

About 'Drilling Down on Local Search'
"Drilling Down on Local Search" will feature 38 speakers from across the paid search industry, including keynoters Briggs Ferguson, CEO, Citysearch, and Hilary Schneider, President and CEO, Knight Ridder Digital. For more information, contact The Kelsey Group by phone: (609) 921-7200 Ext. 10, by e-mail: [email protected], or visit www.kelseygroup.com/ddilm2004/.

About ConStat, Inc.
ConStat, Inc. is a research firm that specializes in the Yellow Pages and information technology industries with offices in San Francisco and Denver. ConStat has served clients in the telecommunications, media, advertising, wireless and high-technology communities for more than 10 years. For additional information, ConStat can be reached at (510) 267-3100.

About The Kelsey Group
The Kelsey Group is the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search. Beginning in 1986, the company has built a reputation as the leading analyst firm covering the directory publishing community, providing advisory (The Kelsey Report® and Interactive Local Media), publishing (Global Yellow Pages™ and Local Media Journal™), consulting (more than 300 individual assignments) and conference services (60 events).

For more information contact:

Eileen Pacheco
(781) 556-1026
[email protected]

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