Microsoft's motive for releasing this survey is obvious: the company is launching a new product called adCenter QuickLaunch -- which includes free consultation with a "search expert" -- targeted at small-business owners spending more than $500 a month on PPC search. I'm not about to bash Microsoft for offering this kind of free hand-holding for novices: what I do object to is the idea -- widely circulated on blogs reacting to the survey results -- that small-business owners are either too timid or too dumb to embrace the obvious benefits of PPC. In my view, many of these people have a damned good reason to stay clear of PPC, for reasons that include the following.
1. There's no faster, easier way to lose money. If you're a small-business owner with a limited marketing budget, the last thing you want to do is to start buying keywords without a mature plan for how you to make your PPC efforts sustainable. Microsoft's survey would have been much more valuable if it had broken out the kinds of goods and services its respondents were selling, because there are many classes of goods and services whose margins are too low to justify any PPC spend at all.
Additionally, as everyone knows, just because a small business happens to have a Web site doesn't mean that it's capable of delivering an acceptable conversion rate. A lot of these sites seem to be cobbled together by 13-year-old nephews of the owner. And yes, while it might be an awful thing to run the numbers and say to a small-business person, "I'm sorry: there's no way you can make a profit using PPC search," it's the only honest answer for many businesses who'd have better luck pursuing a different set of tactics that might not be as sexy but would deliver better ROI.
2. Dabbling in search is dangerous. Spending $500 a month on search might seem like a lot of money to a small business, but it comes down to a mere 16 bucks a day. The last time I looked, there weren't a lot of 10-cent keywords out there, so we might be talking about 16 to 32 clicks per day. Even though it will likely take you many weeks to accumulate enough data to provide a statistically valid sample against which to test significant campaign variables (keyword copy, landing page offers, etc.), many novice search marketers are too "quick on the trigger," and start making changes before they have enough data to justify them. It's sad to say, but the reason that big search spenders have such an advantage in the market is that their investment in data allows them to make meaningful, not random changes. Even here, it can take months and many thousands of dollars to completely optimize a PPC strategy that's truly competitive. Like it or not, PPC is a pay-to-play marketing channel, and if you only pay a little, you'll only get a little back.
3. There's very little low-hanging fruit left. Call me a cynic, but I really believe that the whole "let's make PPC search seem easy" message pushed by the search engines, the conference industry, and pundits who should know better creates chaos and heartache across the land. Sure, if you're in some completely non-competitive category (maybe you're the only authorized vendor of purple marsupial Beanie Babies in Rhode Island), you might have been able to buy a few cheap long-tail keyword combinations, but if you don't have organic visibility for this kind of business, you're doing something wrong and money might be much better spent making your site more usable and search-engine-friendly. Once you step into a competitive category, however, you're going to be up against the big guys, who've spent tons of money on data (see point 2 above), and use agencies with multimillion dollar bid management automation systems and teams of analysts poring over results each day to squeeze out the waste from the keyword buying process. Small businesses might have had a chance of competing in this environment in 2004, but they'd be road kill today. Why even try when you know --- in advance -- that you're going to get crushed?
I don't think that most small-business owners are scared, weak, or ignorant. In fact, I think that many know something that too many of us search insiders gloss over: PPC search is difficult, daunting, complex, and expensive, and this issue can't be done away with a few sessions of hand-holding by Microsoft or anyone else.
Although it grates against the optimistic, "can-do" spirit of the SEM industry, there may in fact be no answer to the small-business malaise when it comes to search. Unless we as industry can be honest about presenting the hazards, as well as the rewards, we shouldn't be surprised when small-business owners, after trying PPC search for a while, tell us "yeah, I tried it, it was a complete waste of money, and I found that my money went a lot further using some other channel."