Commentary

Small Business Not Keeping Up With Online Presence

by Jack Loechner , Staff Writer, February 13, 2009

According to research from Webvisible and Nielsen, reported by Marketing Charts, though 63% of consumers and small business owners turn to the internet first for information about local companies and 82% use search engines to do so, only 44% of small businesses have a website and half spend less than 10% of their marketing budget online.

The research finds an accelerating trend toward online media for local search. However, the report says the study uncovers a significant disconnect between the way small business owners act as consumers vs. the way they market their businesses online.

The survey found that search engines are the most popular source for finding local information:

82% use search engines
57% use Yellow Pages directories.
53% use local newspapers
49% use Internet Yellow Pages
49% use TV
38% use direct mail
32% White Pages directories

Of those surveyed, 50% said search engines were the first place they looked when seeking a local business, while 24% chose the Yellow Pages directories.

92% of searchers say they are happy with the results they get when using search engines, though 39% report frequently not being able to locate a particular known business. This means, says the report, searchers don't may choose to contact a similar business with a stronger online presence.

Webvisible found that online search and e-mail newsletters are the only forms of traditional media that are growing among consumers who wish to locate local products or services. Compared with two years ago, respondents report they use search engines and email newsletters more, while they use newspapers, magazines, direct mail and radio less:

Consumer Use Of Media Compared to Two Years Ago (% of Respondents)
*Media*	*Use More*	*Use Less*
Search engines	72%	1%
E-Mail newsletters	35	7
Yellow page directories	16	23
Local newspaper	10	25
Magazines	11	31
Direct mail	9	27
Radio	9	23
Source: WebVisible and NielsenOnline survey November 2008, February 2009

Despite the growing use of online media for local searches, only 41% of small businesses report turning to online search engines first, and 31% turn to Yellow pages directories first. In addition, only 44% of small businesses have a website.

When using a search engine to find a business they know exists, only 19% of survey respondents report never or rarely encountering trouble locating that business online and 39% say they routinely have difficulty.

Though less than half of small businesses do have a website, the ones that do are not happy overall with their online marketing. Among those small businesses that have a website:

51% believe both the quality and ability of their site to acquire new customers is only "fair" or "poor"
30% of business owners feel that they typically do a better job of marketing than a close competitor
78% believe they advertise in the same places as their competitors
Only 7% of small business owners say their primary marketing goal is to get more visitors to their website
61% spend less than three hours a week marketing their website
99% of small business owners are directly involved in the marketing
65% believe it is very important to know where their customers come from
Only 9% are satisfied with their online marketing efforts
78% of small business owners dedicate 10% or less of their budget to marketing Of those, 30% do no Internet advertising

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

For the purpose of this survey, the term "local business" refers to any retail business in a respondent's local area, including restaurants, entertainment venues, places of recreation, etc. and services such as plumbers or accountants. The term "Internet Yellow Pages" refers to online Yellow Pages websites such as yellowpages.com, judysbook.com, superpages.com, etc.

media planning, online, research, search

6 comments about "Small Business Not Keeping Up With Online Presence ".

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Carol Tomalty from CarricDesign, February 13, 2009 at 11:52 a.m.
Having worked with small businesses to establish or improve upon their cyber presence, I have always known that there has been a misconnect between what business owners do themselves (ie. search for other local businesses or search for products online) and what they do for their own businesses. I believe one of the greatest sources of tension for the business owner in establishing or maintaining a website is trying to run their own business (which they are good at) while trying to figure out how they are going to use their website in their business (which may be overwhelming to them). Many seem to want to take 'baby' steps as they step into the online world and many don't count the cost of keeping the online window into their store clean and tidy.
Reply

Anna Barbosa from Pivotal Marketing Media, February 13, 2009 at 3:03 p.m.

Great article! I try to convey this message to my prospective clients all the time. Because they are also consumers also, using this perspective will make it a more powerful message.

Frank Reed from Marketing Pilgrim, February 15, 2009 at 8:21 p.m.

No surprise here. The surprise is that these numbers don't seem to change much year over year. SMB's tend to be spend averse in good markets so now it will be even harder for the old school types to change. I do see some more openness to finally getting on board with Internet marketing. I suspect the ones we see thriving on the other side of this economic situation will be those who got on board now. Others you will read about as they shutter their businesses.

Robert Stanley from ProSource Inc., July 12, 2009 at 4:28 p.m.

Great article!

I plan to print the sucker out and take it to all my client meetings. Sometimes explaining the importance of marketing online is a tricky task.

This should help.
@robertmstanley

Gene Burwood, July 13, 2009 at 11:23 a.m.

What's impressive to me is the decline in Newspaper
(-25%), Yellow Pages (-23%) and Direct Mail (-27%). With the limited shelf life and finite distribution, I'm amazed the numbers aren't down more.

But as Frank Reed said below, the SMB we'll see on the other side will be the folks who take advantage now.

Frank Law from BMHHI, November 6, 2009 at 6:14 a.m.

This point cannot be emphasized enough, in this age of technology the small business without an online presence will go the way of the do-do bird. There truly is every advantage to giving people another highly sought avenue to find your business, and every disadvantage comes with ignore this option. If you want a site built for you it's very simple, the info is at http://tinyurl.com/ykbrzsb , and others can do the job too, there are just way to many options to stay strictly offline. I find it amazing really!