A report by research and consulting firm Borrell Associates finds small to medium-size businesses are planning on tripling their "non-advertising" marketing (Web-based advertising and other online promotions) by 2013.

However, the report, "Main Street Goes Interactive," predicts interactive ad spending will post only modest gains- 10 percent over the next five years. The smallest U.S. businesses have average annual sales of $212,000 and spend just $5,671 per year on advertising – typically in the yellow pages or on direct mail ads or coupons. But all that is changing with the rise of the Internet – where midmarket companies are now investing 11 percent of their advertising, up from less than four percent three years ago. The report finds SMBs are listening, but not yet fully cooperating.

“They are less receptive to buying banner ads (now accounting for 54 percent of their online spending, but declining) in favor of search-engine advertising, online directory listings, and streaming video,” the report notes. “And they are diverting money toward something that feels to them like advertising, but in reality is technology-supported marketing: Website design, search engine optimization and customer databases.”

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