Posted December 17, 2008 12:05 am by with 20 comments

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by Rene LeMerle

A new study out by Microsoft AdCenter confirms it – small business are still missing the mark when it comes to the potential of online.

It appears a large proportion of small business owners are still stuck in the “build it and they will come” mentality. The study highlights that most small businesses have developed websites, but have done little more to enhance their online business presence.

According to the report, over 59% of small business owners who own websites don’t use paid search marketing, and of those, a whopping 90% have never tried it.

Maybe this statistic tells the real story. Apparently

…seven in 10 small-business owners who participated revealed that they would rather try to do their own taxes than start a paid search marketing campaign.

The survey cited cost, time and complexity, three common misconceptions about paid search, for the poor adoption.

  • Nearly nine in 10 (89 percent) feared keywords may become too expensive.
  • Eighty-one percent questioned if paid search marketing is the best use of their marketing budgets.
  • One quarter of respondents believe paid search marketing is too complex.
  • Twenty-one percent thought it would be too time-consuming.
  • Thirty-five percent felt they would need an agency to help set up a search marketing campaign.

While the report is based on a survey of only 400 small businesses in the US (hardly a representative sample size), the trends and responses are all too familiar. Seems the majority of the small business sector still doesn’t understand the real value of online.

I mean, who really prefers doing their taxes over anything… Small Business – what’s it going to take for you to ‘see the light’?

Rene LeMerle is the VP of Marketing at, a leading provider of results driven Search Engine Advertising and SEO services.

  • Vlad

    Great article! It is a good time to start Marketing company and go door to door and help small businesses understand what they are missing, manage their PPC compaign and make a profit.

  • Talk about a pain point! Smart SEO firms should be playing the marketing off of that statement about the taxes.

    Jim Kukral’s last blog post..Sponsored Post – Sears Shopping “A-Ok” With This Blue-Collar Guy

  • thinkflick

    Thanks of updating. Can you write a guideline ” blogging for business” I read this topic on some other blogs but want to read more posts and watch videos.

  • The 35% who feels it may need an agency to help them start up aren’t far off. Most of the PPC campaigns setup by people who have no idea how to properly set one up end up wasting a bunch of money anyway.

    While PPC campaigns can be the most efficient marketing vehicle, it can also crash and burn budgets if not piloted correctly by a trained professional.

    EasyAutoSales Startup’s last blog post..Upgrading WordPress to 2.7

  • Perhaps small business have “seen the light”. Even though pay per click can produce returns and it is one of the only online marketing systems that gives you real data about your investment, there are better ways of attracting and keeping customers, such as article marketing, PR, offline activity and a whole host of other marketing methods. Pay per click is only one aspect of online marketing. Perhaps small businesses realise that and Microsoft doesn’t.

    There’s also one aspect about the Microsoft study which is worthy of note (and which I mention in my own blog posting on this topic). The press release reveals that the study was performed in April. Why has it taken around 10 months for Microsoft to publish it? It’s not the kind of study that needed 10 months of statistical analysis. Could it be that Microsoft has dredged up this study because it needs to stimulate demand for its AdCenter offering? After all ad revenues are falling at the moment. Far from small businesses being in trouble on pay per click, it sounds to me as though the people with the real difficulty are Microsoft,

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  • I blogged about this very thing last week; same situation is going on in the UK.

    Where have all my customers gone?

  • Vlad has got it right. Here is an opportunity for an entrepreneur to go after these businesses with proper proposals to sign them on as clients!

    Nicole Price’s last blog post..Festive Gifts (Part II)

  • That sounds about right…based on the many conversations I’ve had with small business owners, I would have guessed the number was a little higher. I wonder though if it’s a matter of them not having the money to invest in it as opposed to not “getting it”.

  • This is real sad. But the truth is that many businesses even offline have the build it and they will come mentality. And when they do advertise or market they don’t have to slightest clue how to do this properly.

    And yes, this is a great opp for a entrepreneur to come in and help these business do just that.

  • How is this shocking considering that some 70-80% of the Fortune 100 doesnt even employ “good” organic SEO?

    Jaan Kanellis’s last blog post..2008 Year-End Google Zeitgeist Released, Sarah Palin Rules

  • Is there a correlation between the amount of time needed to truly deliver on SEM AND the number of search/internet/interactive/web/newmedia/pickabuzzword marketing consulting firms? Right. For those in SMB, Id agrue that its more about selling than it is about marketing and the most effective SMB marketing tactic is WOM anyhow, which doesnt translate well to SEM.

    DavidCastroFlorida’s last blog post..Your SEO Library Card – robots.txt

  • Hi Rene,

    Thanks for your well-informed article:)

    The results published by my US colleagues confirm a piece of research we led in the UK last year. There is a clear gap between the determination of SMB to get online, and their understanding of the medium.

    On our side of the pond, we realised that 62% of the SMB who had a website did not promote it at all! You can of course assume that it is a fashionable element to feature a .com address on your business card, a statement, but you start doing the maths, it becomes confusing as per why a small company with limited budgets would spend on a website without leveraging to its full potential. We thus estimated that £3bn were wasted on websites that could not be found.

    Again, there are consistency on why SMB don’t invest in SEM in the US and the UK. There are indeed three long-lasting misconceptions about search engine management that make SMB owners hesitate: it would be time-consuming, complex and, interesting enough, not generating a great ROI…

    I could get the time consuming bit as a SMB owner is already multifaceted and already struggling for time so if you add a new task to their agenda… And yet, the return on time investment is great, and the conversion of the traffic, especially adCenter’s, makes you wonder whether it would be worth investing this time.

    I am puzzled the ROI argument though, as CPC hardly compares with the cost of a DM piece or an insertion in the Yellow Pages where you have to pay upfront for a prospective potential lead who might, one day, open the phone book on your page. Finally on complexity, I tend to argue that SMB have got more intrinsic qualities that make them even more relevant for SEM than bigger companies: they are more agile, more adaptive, quicker to respond… All critical attributes to strive online. In addition, Search Engines, and again adCenter is working probably even harder on that, are developing solutions to help facilitate the use of this channel. For instance, we offer a 6-day a week phone support, regular tailored tips and tricks updates by email, and some managed services… All for free. And yet, as mentioned by some other readers above, there is also the solution to opt for a SEM agency who could work for you as a proxy if you really don’t want to get you hands on that prolific and cost-efficient lead generation channel.

    So overall the barriers to entry are mostly psychological, which advocates the need for further education from the market leaders…

  • As businesses continue to grow online, more and more competition for SERP is inevitable. Therefore, I agree SEO and Management Consulting firms are where its at.

    Yosef Solomon
    Management Consultant
    George S May

  • I think because of lackh of experiance.

  • I believe lack of PPC knowledge is the main reasons why small companies are not able to enjoy benefits of PPC campaign management.

  • I don’t really think this was a very sound study in the first place, the people conducting it have a interest in the result obviously. This is especially true for Microsoft because I bet a large portion of their PPC business is from business as a result of their other products dominance in the area. Also I don’t think all small business would benefit from PPC to their site, some businesses really don’t covert well in the internet environment. With all that being said I do think companies often have bad or poor SEO for their sites and don’t use PPC when it sometimes might prove effective.

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  • I’d like to comment on this post from a journalist’s point of view. It’s true that small business “does not get it”, but what’s even scarier is that this ignorance is a big part of why print media is still barely above water. The local advertisers are doing a big part keeping newspapers alive. Newspapers will be dealt a death blow when small business gets search marketing. I was recently at a Local Search conference in Denver. What a surprise – no local businesses, no Chambers of Commerce, and no newspapers!!

  • I think that many small bussinesses see search marketing as a kind of esoteric science.. It’s all too unknown and still somehow viewed as an unreliable and immeasurable form of marketing.. Something into which they’re dubious about investing their money..