Study: Small Business Online Spending to Grow

A new study out shows that small businesses – more than 75% of small businesses in the United States – will continue to move their advertising and buying power online.

by Kristina Knight

According to Market Profile: Understanding Online Small Businesses, 20 million small businesses regularly use the web. The primary use is online purchasing – from office supplies to advertising. Within the next five years, more than 80% of small businesses will be online. More than 85% will use broadband Internet access.

"Small businesses spent over $43 billion in 2005 in business purchases online," said Sonal Gandhi, Jupiter Research analyst and lead author of the report. "Their online influenced off-line spending is likely to be considerably higher."

The study defined small businesses as less than 100 employees, and those using the Internet regularly to make purchasing decisions. About 90% of these businesses have fewer than 5 employees and make roughly half of all online purchases.

With such a small employee base what does this mean for online marketers? The companies may have fewer employees, but they still make up a larger base of potential business clients who will let their fingers do the shopping. Marketers should take advantage of their online comfort level by targeting ads to smaller businesses.

In a statement, David Schatsky, President of JupiterKagan agreed, "Companies that target small businesses should take advantage of the size and openness of this market online."