Study: Start-Ups Rely On E-Mail, IYP

Small businesses that have been operating for less than 10 years rely on the Web for marketing far more than their older counterparts, according to a study by the Kelsey Group released Thursday. The study found that the younger businesses were particularly heavy users of e-mail and Internet Yellow Pages, but also used search engine marketing, online city guides, and company home pages at higher rates than did older businesses.

The largest margins came in Internet Yellow Pages, which were used by 35 percent of young businesses compared to 23 percent of older businesses. E-mail marketing was used by 24 percent of young businesses compared to 12 percent of older ones; and company Web sites was used by 66 percent of young businesses compared to 51 percent of older ones.

One of the study's most significant conclusions is that businesses of all ages hadn't yet embraced local paid search. Just 6 percent of young small businesses are currently using local search ads, and 4 percent of older small businesses reported using the medium.

According to Kelsey Group analyst Charles Laughlin, this finding indicates that search engines have a lot of excess demand to tap in local markets. "Neither side was involved in local paid search," he said. "As far as your everyday small business, the search market hasn't even scratched the surface there, which suggests that there's a lot of opportunity there."

The study was based on a survey of 301 small business advertisers.

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