At a time when recessionary pressures are prompting small and mid-sized units to reduce their budgets further, the demand for traditional medium has declined. However, the SMEs continue to invest in digital and online media, which is cost-effective in nature and provides a high return on investment (RoI) to the SMEs.

A study conducted by Kelsey Group shows that among the SME advertisers, the uptake of digital and online media has superseded traditional media. According to this study, the incursion of digital and online media witnessed a gradual rise from 73% to 77% during August 2008-09. However, during the same period, traditional media declined from 74% to 69%. This change has been brought about by customers who prefer online media as it helps them to put forth their queries and get instant feedback without any cost.

The study observes that there has been a decrease in overall advertising (ad) spending by small and medium-sized units. The global economic meltdown coupled with the incursion of low-cost digital and online media have resulted in a decrease in ad spending by SMEs.

“The expanding use of Internet and digital media is making it an attractive medium for the SMEs to invest in it and thereby gain access to a wider audience” said LK Dhanva, MD of Creative Media, a small-sized creative firm in Kolkata.

Further according to the study, ad and promotion spending by small and mid–sized entities has decreased by 23.5%. There has been a drop from Rs 1,34,043 to Rs 1,02,567 during August 2008-09. However, there has been a gradual increase from 22% to 36.8% in digital and online spending during 2008-09.

Gradual rise in SME spending

There has been almost a 26.8% soar in SME spending on websites and profile pages, from Rs 29,809 to Rs 37,702 during 2008-09.The study also shows that there has been a rise in the proportion of SMEs, from 22% to 30% during the same period, that make use of Internet as a medium to track business rivals.

According to Steve Marshall, Research Director of Kelsey Group, adoption of digital and online media is gradually overpowering traditional media among the SMEs.