SMBs to spend US$7.6B to build online presence

Small and midsize businesses in developed countries of Asia-Pacific region find it essential to give potential customers positive "first impressions" online, says analyst.
Written by Konrad Foo, Contributor

To build their online presence, small and midsize businesses (SMBs) in the developed countries of the Asia-Pacific (APAC) region will spend over US$7.6 billion on online advertising, Web hosting, development and maintenance in 2009, a new study revealed.

Access Markets International Partners (AMI-Partners) said Wednesday, SMBs in Australia, Korea and Japan are spending more on building their online presence than on Internet access.

In 2008, 13 percent of SMBs in these countries used the Internet to advertise. They are expected to spend about US$1.6 billion on such advertising this year.

Spending on Web hosting, development and maintenance by these SMBs will reach about US$6 billion this year and will grow to about US$8 billion in 2013, AMI-Partners said in the press statement.

Vu-Thanh Nguyen, Singapore-based research analyst at AMI-Partners, said the market to build an online presence is growing fast because as more customers are going online, businesses are "following in their footsteps".

"Besides, the global crisis is forcing SMBs to find a cheaper and better way to reach their customers, and that is what online advertising offers. We are forecasting higher online advertising spending by SMBs this year," Nguyen said in the press statement.

He said consumers use the Internet to check out a company before deciding to patronize it, making it important and essential for the company to achieve positive "first impressions". He added "having a decent Web site is as essential, if not more important than, having a nice physical office".

The top three online marketing methods among these SMBs are e-mail marketing, blogs and online keywords.

For each country and industry, different types of advertising channels are preferred. For example, Web casts and blogs are more popular in Japan, as compared to Australia and Korea.

Despite the increasing popularity of social networks, less than 2 percent of SMBs in these countries advertise their products and services at such Web sites.

While Web sites and search engines weigh heavily as information sources for IT decision makers across these countries, it is still the traditional newspapers and magazines that a majority of SMBs regard as their top information source.

Nguyen said: "There is simply too much noise on the Internet. Established newspapers and magazines have better quality checking and editing processes, and therefore, tend to be more professional and reliable."

Although the Internet allows messages to be sent to a larger and more targeted audience, quality still triumphs over accessibility, he added.

Traditional media is still used by majority of the SMBs in the form of newspapers, magazines, telephone directories, brochures and flyers.

Based in Singapore, Konrad Foo is an intern with ZDNet Asia.

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