• by Shankar Gupta , June 14, 2006

Smaller companies take a more hands-on approach to generating word-of-mouth about their products and services than do larger companies with more ad dollars to spend, according to a Jupiter Research report released on Tuesday.

"Small companies often leverage free tools such as blogs and message boards, and allow company employees to engage with customers frequently and directly," the report stated. "Small companies are therefore more confident than large companies in their ability to monitor and control consumer product decisions."

For the study, Jupiter Research conducted a survey last year of 43 companies with revenues of $1 million or less, and 79 companies with revenues of more than $1 million. Results revealed that 44 percent of the small businesses ran corporate blogs as compared to only 24 percent of the larger firms, 74 percent of smaller businesses posted information on a Web site to generate buzz naturally against 61 percent of larger companies, and 30 percent of smaller businesses allowed their employees to maintain blogs compared to only 22 percent of larger businesses.

Jim Nail, chief marketing officer of word-of-mouth measurement company Cymfony, said that the relatively small ad budgets of smaller companies accounted for their attempts to spark interest via blog posts or other low-cost Web methods.

"Smaller companies don't have the luxury of a multimillion-dollar marketing budget, so they have to be a little more resourceful, a little scrappier, a little more risk-taking, to hope to get a return on their marketing budget that's out of proportion to the size of the marketing budget," he said. "Big corporations like predictable returns on their marketing dollars."