A new study shows that small businesses are really starting to not only understand the importance of online marketing, but are also reaping rewards for the time and effort they put into their sites. The ISP Interland's Summer 2005 Small and Medium-sized Business Barometer compiles information about small to mid-size businesses by interviewing 780 business leaders. The results are interesting in that they vary by a decent amount from what standard business surveys have shown.

For instance, when studies are done of the overall marketplace, pay-per-click advertising is found to be the most common form of search engine marketing. The Interland data however, shows that search engine optimization leads pay-per-click advertising by a huge margin when it comes to small businesses. According to Interland's survey, 54% of small businesses are currently using search engine optimization, that's compared to 20% that are running pay-per-click campaigns.

That means that small businesses are understanding what the big firms are missing...that while it takes more time to implement, organic search engine optimization will outperform pay-per-click when it comes to drawing long-term leads at reasonable costs. That's an encouraging sign for the market, though it does make it that much more important that small businesses that are not already promoting themselves through organic search start to do so.

While only thirty-two percent of respondents currently sell products through their web sites, 76% said that their web site drives leads for their business. On the sales side, the numbers are nothing to scoff at either. 82% of e-commerce sites generate a monthly profit and more than 10% drive 75% or more of their total sales through their site.

Perhaps the most important data to come out of the survey are the numbers on who actively markets their company and who doesn't. Nearly a third of the surveyed companies said that they do not market their companies at all. If you're one of those businesses, you need to give serious consideration to making marketing a line item in your budget next year. Whether your site is an e-commerce site or not, it should still be viewed as a sales tool and you should be actively working to drive targeted traffic to it.

The other important take away from this survey is that while many companies are moving online and working to build solid web sites, a great deal of those companies still seem to be confused about the purpose of a web site. 53% of surveyed business owners feel that their site's primary purpose is to provide credibility for the company. This number is pretty close to the 54% that evaluate the success of their site by the feedback they receive from customers on it. That means that over half of small business owners are still missing the boat when it comes to understanding the purpose of their site.

A web site lending credibility to your firm should be something that goes without saying. It shouldn't be a goal, it should be something that is expected. Your web site should serve first and foremost as a sales and lead generation tool for your business. It's great if your site can also serve to help you with customer service issues and other secondary purposes, but sales and leads should be the primary goal and the online marketing efforts of your site should reflect that.

Interland releases updated surveys on a fairly regular basis and each shows a steady progression of growth when it comes to online marketing and use of web sites. If you're still holding off the marketing of your web site, you need to step back, look at the marketplace and give serious consideration to where your efforts are focused. Businesses are embracing search engine and other online marketing at an ever growing rate and those that fail to jump on the bandwagon soon will likely find themselves having a hard time playing catch-up.

Discuss this article in the Small Business Ideas forum.
October 4, 2005

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

Search Engine Guide > Jennifer Laycock > Are Your Competitors Making Better Use of the Web Than You?