Why Small Businesses Don’t Invest in Online Marketing

Friday, October 12th, 2007 by Janet Meiners

Why Small Businesses Don’t Invest in Online Marketing

I just wrote about the story of Costco who continually expands online so it even eclipses their sales offline. Since the cost of doing business is so much less online, this is an opportunity for businesses of all sizes, including small businesses.

A new study by Opus Research shows why small businesses don’t invest in online marketing – even though it could have a large impact increasing sales. Many said (25%) the reason they don’t invest is because they think it will cost too much. Then another 20% think are intimdated by the technology or don’t have the staff to handle it.

What is the solution? Something I’m a big advocate of – education. Opus Senior Analyst Greg Sterling, wrote the report “Small Business Attitudes toward Online Marketing and Web 2.0.” The survey included responses from 1,200 businesses with 653 from North America.

ClickZ says, “Aside from concerns about cost and difficulty, some small business operators voice general disinterest in online advertising. About 18 percent said they felt the Internet wasn’t relevant to their businesses, and 10 percent expressed doubts about Web marketing’s effectiveness.” They want to see numbers.

Most of the businesses understand the need for a web site, but still haven’t embraced marketing online. Many rely more on word of mouth advertising, which is powerful. However, blogs, and what they do online can fuel more word of mouth. Your customers can only talk so much and the internet can expand the potential people who find and know about you, who can then talk about your business.

Just because you have a web site, that doesn’t mean you market through it. Over half of those surveyed (59%) say they don’t market online. For example, many small businesses put the name of their business name on their site and don’t think about search engine optimization. With a little education, they should be able to rank in search engines locally. For example if you are a small business doing catering in Seattle, washington you should be able to be listed near the top of the list with a little education. Adding your site to Google Local is free.

The small businesses I’ve worked with have seen success with business blogging to get search engine rankings. However, I have talked to many with the attitudes captured in this study. There is still room for a lot more education and growth for small businesses who understand the impact internet marketing can have on their business. I for one, would rather get web leads than spend money on other forms of advertising that aren’t as targeted.

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10 comments on “Why Small Businesses Don’t Invest in Online Marketing”

Creative Advertising Methods Will Win The Day Says:

October 13th, 2007 at 12:19 pm

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Music Software Says:

October 14th, 2007 at 8:39 am

Yes, the main reason has to be that small businesses do not have the infrastructure to handle this, unless their entire business is built around on line trading.
Water Portal Says:

October 14th, 2007 at 9:02 am

Small business do not advertise online because they dont want to learn all technical stuff related to ads, even for me it took some time to figure out how to use AdWords with super efficiency.
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October 14th, 2007 at 3:38 pm

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Paul Chaney Says:

October 15th, 2007 at 10:00 am

Janet, you’re right on all counts. My experience working with small business has been very similar. However, in most cases (I won’t say all), those that chose to use a blog for marketing purposes experienced at least some degree of success in SEO-terms.

My advice to small business…if you’re budget is limited (and whose isn’t), blogs are the way to go!
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October 18th, 2007 at 11:17 pm

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vidi Says:

November 5th, 2007 at 5:04 pm

I guess, being familiar with SEO techniques may help in online business investment even with a very small budget
ScottUA Says:

November 6th, 2007 at 11:53 pm

Many good products and services are still practically unknown to a lot of potential customers because of the points covered here. If only the owners or operators behind these small businesses make an effort to know more about what’s available to them through the internet, they probably would think twice about not having an online presence, whether marketing or making online business transactions.
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