MerchantCircle is a small business association with more than 1.6 million local members in the United States. A recent survey conducted among 8,456 small business owners revealed that of the top online marketing methods they applied, email marketing and social networking were tied at 36% each as being the most effective. These results vividly demonstrate that in the midst of the social media age, email marketing continues to reach and engage a consistently wide audience as well as being a primary and indispensable part of any business’ marketing mix.

Traditional Media Advertising Being Replaced by Online Alternatives

Conventional media buys are plummeting in popularity among small business owners. In 2010, their use of print advertising in newspapers and local magazines, as well as flyers, decreased by one third to 27%. Yellow Pages placements dropped by nearly 20% to just 37%. Direct postal mail also suffered a severe slump (with 26% fewer small business owners using the method) down to just 28% of the total. The vast number of advertisers abandoning these traditional and ineffective promotional methods are turning to the efficiencies of email and social media marketing as equal halves of a complete online marketing strategy – which is preferred by a combined 72% of all small business owners.

Online Coupons: Fool Me Once, Shame on You, Fool Me Twice…

Not all online forms of advertising are proving to be successful for American small businesses. Although only 11% of them have offered a “daily deal” through the various coupon services such as Groupon or LivingSocial, a considerable majority of 55% who have done so claim that they would never want to repeat the experience. The reasons for this aversion may lie in the enormous discounts required by the coupon services. In the shadow of a recession, small businesses are finding that they can simply not afford a promotional method that requires products and services to be sold at approximately half of retail price. The goal of any marketing strategy is to make money – not lose it – and little gain can be had by selling below cost.

Most Small Business Owners Do Not Fully Comprehend Mobile Marketing

There seems to be a widespread level of confusion among small business owners when it comes to the rapidly proliferating web-enabled mobile devices. A bare 15% of them report that they are marketing directly to smartphones and tablets and the majority of small business owners have no immediate plans to start doing so. Nearly three out of four small business owners claim that they do not understand how these mobile forms of marketing can be accessed for marketing purposes. The majority of small businesses have not fully embraced the near-universality of mobile devices, which can access the web as easily as any computer. They may still be thinking that mobile marketing is performed via SMS, when in fact one of the most frequent activities any smartphone owner engages in is checking their email!

Pockets of Small Businesses Still Have Zero Online Knowledge

There are some very interesting blips in the data that point to the “ma & pa corner store” nature of some small businesses. Just under 1% of all owners had never heard of Facebook or Google, 2% didn’t know YouTube, almost 4% had no idea what Bing was and about 6% didn’t know about LinkedIn.

Many small businesses are still recovering from the recession, so the survey found that more than half of them spent less than $2,500 on marketing in 2010 and three out of five of them have no plans to increase that budget in 2011. Fully 37% of small business owners state that the lack of time and resources is their top challenge in implementing online marketing. These statistics prove that delegating online marketing to a professional email service provider is the most effective way for time- and budget-squeezed small businesses to break into the digital marketplace.