Posted February 16, 2009 9:46 am by with 45 comments

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Over at Frank Thinking, contributing Pilgrim Frank Reed shares a study that reveals just why it’s so hard to get small businesses to break their local newspaper/yellow pages advertising habit.

Why? Because they’re still using the darn things!

While 82% of consumers turn to the search engines when finding a local business, only 69% of small business owners do the same.

Even though a staggering 44% of small businesses don’t yet have a web site–with 78% of them spending 5% or less on internet advertising–there is some hope that small business owners are (finally) waking up to the web.

Over the past two years, 43% of small businesses say they have increased use of search engines in their marketing efforts. In contrast, use of traditional small business advertising mediums is on the decline:

* 23% say they use the Yellow pages less
* 42% say they use the local newspaper less

I’m shocked! Either the glass is half empty (will small businesses ever "get" the internet) or half full (small businesses are a hot target for marketers).

What’s your take on the numbers?

  • Wow I can’t believe that! Guess there is a lot of business out there for site designers and SEO management!

    Evan’s last blog post..Why Twitter is the Coolest Thing Around?

  • If you don’t have a website, you miss out on my business. If I can’t google you then I’m not going to use you for ANY service. I think it’s amazing that some people still rely on a phone book.

    Kelly M’s last blog post..Fool Your Mom/Boss with iSkip

  • What’s a phone book? LOL

    I use google or my iPhone to find everything.

    And it’s not hard to create a web site. I created two one page sites this morning on blogspot. Simple capture pages that I’ll cloak and feed into my autoresponder.

    There’s really no excuse for someone not to have some sort of web presence either paid or free.

    That’s just my opinion.

    Tony Logue

    Tony Logue’s last blog post..New Squidoo Lenses

  • Charles

    A Web is like managing a 2nd biz for many B&M, $$$ only go so far

  • This is very shocking. However, I am sure that within a few months (or at least by the end of the year), we should see a mass rush for the web. In this economy, the web can dramatically increase any business’ customer base and bottom line. And as a web developer, I am glad to know that there is so much work out there. 🙂

    Shirley – Velvet Blues’s last blog post..New Domain Name? Use GoDaddy Discount Codes

  • That is amazing, in this time and place. but i blame the issue to the web developer that doesn’t explain why a website is needed.

  • In Canada – I read a report that stated 60% of SMB’s do not have web sites.

    So in the States – you are doing better than we are!

    Elliot Ross’s last blog post..On Being The Small Business Tech Manager

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  • I don’t care if a business has a website or not. The importance is whether they’re online. A website is one place. Maybe they have a Facebook page; maybe they’re visible with shareable photos and videos. Maybe they’re on a virtual shopping mall.

    Most websites are copies of marketing material, and the argument to consider is why should a business spend money on that? So you can google it and see it and be happy? Depending on the geographical clientele of the small business, a website may not be the best investment.

    Ari Herzog’s last blog post..My 4,413 Bonds of Facebook Friendship

  • Actually I would think that 44% would be somewhat low.

    Jaan Kanellis’s last blog post..Canonical Tag From Google: So Simple and Smart

  • Staggering number and it spells opportunity for those of you who can help all those small businesses put themselves on the net!

  • OMG- this is unbelievable and can not be right. How are these businesses thinking of gaining customers in recession times? Think about it, somebody should tell them about the opportunities online, and what advantage they can get.

    Anette Gangnæs’s last blog post..Super Bowl for Women

  • Anette, we should form a company and go after this business building affordable, good websites for companies. 🙂

    No really…they also need a little help with on-site SEO and PPC management. But we don’t need anymore SEO firms!!

    Evan’s last blog post..Why Twitter is the Coolest Thing Around?

  • @Ari

    “ why should a business spend money on that? So you can google it and see it and be happy? ”

    I disagree – this is from a post I did on the subject;

    Perhaps through advertising, a sales call, or even a referral, someone remembers just a basic part about your business. Unfortunately they cannot remember all the details.

    They already know you exist.

    So that prospective customer deliberately hits the search engines with as much information as they have available.

    That could be part of your name,

    Maybe with your region or location,

    And perhaps with your product or service.

    They know you exist! Unfortunately for you, they can’t find you.

    Elliot ROss’s last blog post..On Being The Small Business Tech Manager

  • This actually doesn’t surprise me. What I’m wondering is how long it will take before these numbers start to change? I’m thinking it will be when the current business owners aged 30-50 (who don’t believe in the internet as much) are retired and the younger generation is in their place.

  • Oh, one more thing. You said 78% of them (small businesses) are spending 5% or less on internet advertising, but the article you linked to says 78% of business owners dedicate 10% of their budget to online advertising…Which is correct? I’m confused 🙂

  • @ Andy

    “While 82% of consumers turn to the search engines when finding a local business”

    Are you able to cite a study or research where this number comes from? We’re developing a sponsorship model for our broadcasters that taps into local search, and the authenticity of this number would prove helpful in convincing jaded business owners.

    I had recently read that 70% of local search begins online, and would settle for any numbers derived by a credible study.

  • I might be someone who disagrees with the proposal to give every small business a website, infact, in many ways, I really want to know why 44% of small businesses will need a website, if you live in a small town, does the fair salon across the road need a website? probably not. Even if you live in a larger center, does Joe’s Hot Chicken Fries shop need a website? probably not, why would he anyway?

    In a way, I can see that by saying all small businesses need websites is a way to convince people to use our services, but really, does the business NEED a website, if they think so, is it really worth their money to pay for it?

    I personally think that the remaining 44% of businesses that don’t have websites don’t have them for the exact reasons above, but thats just me.

    Also, something to note on the comment form.. 7+8 can be rather hard to work out late at night, you’re almost as bad as google’s late night checker ;P

    Micheil’s last blog post..Changing My Accountant.

  • @Michael – yeah, it’s the study discussed in the post above? Click the last link. 🙂

  • Those stats are very interesting. Despite how prevalent the web is today, I am astonished at how many people I meet and talk with that don’t understand how to use it beyond searching for something. It doesn’t surprise me that so many small businesses haven’t picked up on this yet. The opportunity is educating these folks on how the investment will impact their business. In my opinion that’s where the disconnect is – they don’t know how to measure the value.

  • That statistic doesn’t surprise me. Many small business owners think that having a website is a luxury rather than an essential part of their business. Many times they think they can’t afford which is not necessarily the case. It’s a shame that so many businesses operate without a web presence.

    Brandon R Allen’s last blog post..What Business Form or Entity Structure is right for your business?

  • > reveals just why it’s so hard to get small businesses to break their local newspaper/yellow pages advertising habit.

    The cited article does not say that. It says

    > In other words, while small business people use search engines for nearly every bit of research they do they must think they are the only ones doing it since they don’t work to make their business more visible to searchers. I don’t get that intellectually but I know it’s real. Here are some highlights.
    > * 82% of these small business folks use search engines
    > * 57% use Yellow Page directories (this one surprised me)

    It talks about using YPs to do their research, not their advertising.

    As an SEO at one of the few successful YPs that are still in growth mode (Australia), I have a bias but I can understand the romantic notion that “surely everybody uses the web”, therefore every business should have a website.

    As SEOs we know that every restaurant in downtown would not rank in the top 30 results in Google simply because there are more than 30 restaurants downtown, but every restaurant does have the chance of a free listing in their local YP. A paid YP listing gives them more space and a better chance to rank in the corresponding IYP.

    We also know that many restaurant sites are built badly and will not rank short of a redesign. The last 44% of business owners will include ones who will not have the budget to have an optimised site. They’ll not be happy if they cut their YP spend and their new website gets no traffic.

    Some IYPs have managed to optimise their content and so their advertisers (and free listings) get another chance to rank high in Google. In Oz a few adult categories are lawful and can advertise in the YP/IYP — their individual websites have the usual challenge of ranking in a competitive category, but the IYP list of their category ranks in the top 5 thanks to SEO of a large, trusted site.

    Some IYPs have cut deals with Google so that the onebox (aka ten pack) is powered partly with their listings, which gives another opportunity to appear at the top of page 1.

    Therefore, it isn’t an either/or situation.

  • Angle brackets got chewed above – should read:

    As SEOs we know that every restaurant in downtown (insert any big city here) would not rank in the top 30 results

    Ash Nallawalla’s last blog post..Looking for local results?

  • I think most of the small business fear that they cannot sell to their small local target market by getting on the Internet that serves the international audience, which is definitely not true. Every business should look towards globalizing their businesses and even if you currently don’t offer your products and services internationally, you might need the relationships that you built on the Internet with international prospects to help in your expansion in the future.

    Wayne Liew’s last blog post..Introducing Wayne Liew Dot Com Newsletter on Entrepreneurship

  • @Ash – If I search for ‘Italian Restaurants” + city_name – if you have more than 30 of them – you got a whole new issue.

    I live in Ottawa Ontario – I was looking for a septic company to do some work on my septic system – the first results were from Ottawa KANSAS!!!

    Do you think that did me any good? NOT

    Sure you may not need global search rankings – but direct searches?

    Like “septic repairs” + Ottawa Ontario?

    You gotta be found man –

    At the very, absolute least it has to an extension of your business card

    Elliot Ross’s last blog post..Know Your Communication Style

  • @Michael – yeah, it’s the study discussed in the post above? Click the last link

    @Andy. Novel idea. Thanks.

    At 3:54 am, the only thing I’m checking for is my sanity:>)) Great post with lots of opportunities & possibilities.

    A great tip to remember for those small business owners with – or without – a website, is to submit your business to Google maps. It’s surprisingly paid off dearly for me over the years…

    There’s absolutely NO reason for a business to have zero web presence today…unless you choose to remain isolated.

  • Most small businesses don’t rely the internet for business. They provide for the locals..

    Darren Tan’s last blog post..Music Review: ?Fantasy Black Channel? by Late Of The Pier

  • Totally believable stats. I do searches in my City and can’t find many businesses. I the president of KCNG and have gotten most of my business members online. Most are getting found real easy because of lack of competition. There is lots of work left for web designers and SEO experts.

  • While all businesses need a website, I do think that businesses that cater mostly to local, walk-in trade need Yellow Pages ads. There are many people who still turn to their local phone book for quick information. While we may be of the generation that opens Google first, there are still many, many people who want a print directory. A website is absolutely essential, but there is a place in some advertising plans for old-fashioned print advertising. They should work together.

  • My son read the comment about the yellow pages and asked me what is the yellow pages. I just started laughing. I went to find him one in the house to show him and I couldn’t find him one.

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  • I see $$$$$…

    Figure out how to convert and capitalize on this target market.

    Scott Drozd’s last blog post..Guerilla Marketing and the Key Tactics to New Business Marketing and Advertising

  • Wow,

    I knew that a lot of business owners don’t really know a lot about the internet but 44% don’t have a website – crazy.

    I guess I am in the right business – that shows why my business has increased so much in the last year!

    Thanks for the Great Article

    Pamela – Artista Design

  • I find this figure amazing. We are in 2009 aren’t we? As a small business owner myself, I’ve been online since 1995. When I’m a customer, the first thing I look for is the company’s online presence. Thanks for sharing this startling statistic.

    Deb Agliano (AKA DebOnTheWeb)’s last blog post..Real Estate Market Balance in Malden MA

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  • @Scott

    Agreed – but small business is notorious for “not knowing what they don’t know”


    Elliot Ross’s last blog post..Online Survey’s – yer Doin It Wrong

  • I think you’ll find it was “44% of small businesses have a website”, so your header should read:

    “56% of Small Businesses Still Don’t Have a Web Site!”

  • Rob

    Its not that I run a web design company, nor that Im biased (wel….) but I wouldnt dream of picking up a yellow pages, or any purpose other than to hurl it into a recycling receptacle.

    In fact I havent used one of those old contraptions, for at least a decade. You have to turn pages, by hand! Engage the brain in a manual indexing process. That ridiculous clap-trap notion died I thought, back in the old 1900’s, when web site design services were new, most computers still drank petrolium and required an oil change once a year.

    Isnt yell getting shot of the paper brick in the states soon, anyway?

  • That’s true that many of the small businesses do not have their website and some of them do not use the web for their business growth or marketing. In most of the cases this happens due to lack of proper knowledge about internet . Some of the small businesses believe that its just about increasing their budget and wasting pounds on it and most of them do not care what’s happening around as they are satisfied with their local business and not interested in expanding it.

    Priyanka’s last blog post..New Feature – Upload Files to Messages

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  • This could be a case of number crunching irrelevant data. Without demographics which further defined “small businesses” the 44% figure of those who have not commissioned a web site design is relevant.

    For example, the number of under 25 year olds who do not own a car, or are unemployed, might be as high as 80%, if you include babies, kids and teenagers.

    There are loads of small businesses who might offer a service to a fixed audience, ie a privately owned Ltd company managing the leasehold on a building. The company doesnt need to have a website designed, as it has no service to offer potential customers, and wouldnt benefit from a website as the income is more or less fixed.

    The same applies with websites. I know plenty of people who run their own little part time company, working more or less exclusively for one other company, and they own the little business they run, but dont need a web designer to create them a website to promote their services, as they dont want, or need – any new customers.

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  • Hi,

    As amazing as it seems to those of us who are immersed in online activities, as the article states there are an alarming amount of small businesses that don’t know what to do, who to trust or how to get started online. A portion of what I do each day is help small business entities learn to use the power of internet marketing. Even the simplest thing like collecting and email address and building a list for future marketing is foreign to many of these businesses.

    I have a heart to help see them succeed and find a fair amount of success in providing them the information and systems they need to bring their business out of the stone age.


    Rick’s last blog post..Driving Traffic For The Long Term

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