Small Businesses Stay Committed to Traditional Ads While Embracing Online Options

The majority of small businesses still see print Yellow Pages advertising as their most effective way to generate sales leads, but more are also eager to integrate effective Internet options into their overall marketing approach, according to a new, independent survey.

The nationwide survey of 1,000 small businesses shows that 63 percent currently advertise in a printed Yellow Pages directory, the most commonly named form of advertising among the respondents by nearly a 2-to-1 margin. Of all the various forms of advertising that the respondents used, small businesses ranked the printed Yellow Pages first as the medium that generates the most calls from potential customers — the No.1 reason small businesses cited for taking out any ads at all. The survey was conducted by Utah-based Western Wats Data Collection Agency and was commissioned by AT&T.

The survey also shows that small businesses increasingly recognize the need to add online advertising to their mix. About 53 percent said they expect to buy online ads featuring videos within the next couple of years. These businesses — with 25 or fewer employees — plan to explore an integrated approach to advertising, and the growth opportunities are strong: About 23 percent advertise online currently, and two-thirds have their own Web site.

“Consumers are still going to the book as their primary choice for local business information, but they’re also searching online before they buy,” said Frank Jules, president and CEO of AT&T Advertising & Publishing, which publishes the AT&T Real Yellow Pages.

“The survey shows that small businesses are addressing this reality in their marketing plans. To help navigate this changing landscape, we offer small businesses integrated solutions that incorporate print, Internet Yellow Pages, search-engine marketing and Web site design with e-commerce capability.”

The survey results align with current and emerging consumer-search trends. According to research by analyst firm The Kelsey Group, 61 percent of Americans say they still turn to the printed Yellow Pages as their preferred way to find local business information. Thirteen percent named search engines as their most preferred source, and 7 percent named Internet Yellow Pages.

“It’s a case of one plus one equals three,” said Charles Stubbs, president and CEO of YELLOWPAGES.COM. “Today, consumers have more options than ever to search for local business information. Reaching the right audience — or the right business, if you’re a consumer — means being exposed to multiple media channels.”

YELLOWPAGES.COM continues to meet ever-changing consumer-search needs with online and mobile local-search enhancements and has developed a suite of online advertising products for small businesses.

Additional findings demonstrate that small businesses’ online advertising spending is projected to increase:

* Twenty percent expect to spend more on Internet Yellow Pages.
* Thirty-eight percent expect to spend more on Internet banner ads.
* Forty-three percent said they spent more on keyword-search traffic this year compared with last year, and 34 percent expect to keep increasing that spending next year.

Small businesses’ print-based advertising spending will remain strong as well:

* Seventy-two percent of businesses expect to spend the same amount on print Yellow Pages advertising next year, and 11 percent will spend more.
* Nineteen percent of respondents also expect to spend more next year on newspaper and magazine ads — the second-most mentioned medium in the survey.

The respondents were concentrated in 10 areas from coast to coast — Atlanta, San Francisco, Charlotte, N.C., Connecticut, Chicago, Dallas, Detroit, Milwaukee, Oklahoma and San Diego. The survey has a margin of error of plus or minus three percentage points.

AT&T Advertising & Publishing is the nation’s largest directory company in terms of revenue. AT&T Real Yellow Pages directories are referenced about 4 billion times annually and used, on average, more than three times as often as books published by the closest competitor in AT&T-served markets.

YELLOWPAGES.COM is a leading Internet Yellow Pages and local-search company. The YELLOWPAGES.COM Network received more than 1 billion searches for local information in 2006 and is on track to better that rate significantly in 2007.

Together, AT&T Advertising & Publishing and YELLOWPAGES.COM offer a full suite of advertising solutions to businesses, including print and online Yellow Pages advertising, Web design and e-commerce capabilities and search-engine marketing packages. AT&T also is the only company to provide targeted advertising through an Internet Protocol television (IPTV) platform, now available in select markets as part of AT&T U-verseSM TV service.

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About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world’s most advanced IP-based business communications services and the nation’s leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com.

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