Young Biz Leads The Way To Digital Ads

DALLAS – For decades, newspaper execs have fretted over the tendency for young people to be less apt to read a newspaper. Now local media of all stripes has a new worry: Young businesses, it seems, are also less likely to be loyal to traditional media when they start thinking about advertising.

And from iPad apps to SEO and "reputation management," there's a new crop of digital marketing tools vying for SMB dollars.

That's the word from speakers at the Directional Media Strategies conference which got underway yesterday in Dallas. The three-day conference is hosted by BIA/Kelsey, a company that tracks how advertising dollars are split among the various media.

Small and medium-sized companies are far more likely to use Twitter to get their word out if they're young, according to Matt Booth, a senior vice president at BIA/Kelsey. About 16 percent of companies age 3 or under use Twitter, compared with just 2 percent of those in business 11 years or longer, he said.

That pattern holds true when looking at companies with plans to build a social media Web site. About 44 percent of small and medium-sized businesses that are 3 years old or less plan to add such a site in the next 12 months, Booth said. Only 22 percent of similar-sized companies that are 11 years or older plan to do so, he said, quoting data gathered by his firm.

In fact, according to Howard Lerman, founder of Yext and the conference's keynote speaker, almost a third of the advertising budgets at young companies (small to medium-sized) now goes for online advertising. Meanwhile, the oldest group of companies spent only 13 percent of their budgets for online ads, he said.

Amidst all this, the percentage of advertising dollars going to newspapers dropped from 24 percent of the total in 2007, to 18 percent in 2009, according to a BIA/Kelsey study.

"Ask not about TV. Ask not about print. The future is a digital frontier," Lerman told those gathered at the conference.

And the competition isn't necessarily going to come in the form of PCs, or even laptop computers. Conference speakers showed off apps that could turn iPads into mobile advertising machines.

One speaker demonstrated how an iPad could be used to watch video from inside a restaurant, letting the diner check out the ambience before going. Another showed how an iPad user could flip through virtual pages of the Yellow Pages, simply clicking on a business' phone number to dial it.

Shoppers may one day turn to their iPad to track down items in store inventories and check on prices, said Ron Mintle, president and CEO of Yellow Magic, a software supplier for the Yellow Page industry.

One thing people may not do, or at least not as much, is "pay per click" for online advertising.

"There's been a lot of dissatisfaction with 'pay per click,'" said Lerman. Some businesses have decided the "clicks" on computers did not result in sales for them often enough to merit paying the price.

Search engine optimization, or SEO, is becoming a more important strategy, Lerman said, with businesses looking for ways to make the name of their company pop up when potential customers search the Internet.

A couple of speakers talked of how businesses can now pay to track just where their names pop up, and in what context.

Reputation management was a $620 million business in 2009 and will grow to $4 billion by 2014, Booth predicted.

For $49-a-month, Emad Fanous, cofounder of Solfo/YellowBot.com, said a business can learn whether its contact and other information is reported correctly on the Web, as well get information on competitors' (and its own) Web presence.

Brendan King, CEO of VendAsta Technologies, said his company's reputation management service can be had for $19-a-month.