Lack of understanding in SME sector cited.

 On the day that Ofcom reported that online advertising overtook advertising spend on mainstream TV in Britain last year, a leading online search specialist has warned that most SMEs still show a shocking lack of understanding of what they can achieve through online marketing.

Ofcom’s Annual Communications Market Report, which was published today, announced that online advertising spend has risen by an average of 70.2% in each of the last five years to reach £2.8bn.

For the first time the internet attracted more advertising spend than the combined net advertising revenues of ITV1, Channel 4, S4C and Five (£2.4bn) in 2007.

Yet according to Steve Barnes, Infoserve’s CEO, businesses are not aware of this dramatic growth.

Infoserve claims it is in contact with over 10,000 SMEs a week, but he believes too many don’t understand the best ways to market themselves online and are missing out on a priceless opportunity.

Barnes says, “there is a worrying lack of understanding amongst SMEs about online advertising, not only in terms of its effectiveness but also in terms of its value for money. Yet if we’re talking about return on investment, then online advertising is second to none. "

It is hoped the Ofcom report will help SMEs realise the potential of internet advertising, which offers more controlled and flexible advertising than ever before.

Ofcom’s report also shows that paid-for search advertising, which enables SMEs to appear next to results when someone searches for a specific term, still dominates the internet market and is up 39% during 2007 to £1.6 billion.

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