I often try to explain to small business owners that although it may seem like big business has the advantage when it comes to marketing online, sometimes, the advantage lies with the little guy. Sure, the big business has tons of money to throw at their marketing, but along with big money comes the ability to make big mistakes. On the other hand, small businesses with limited budgets have to make every dollar count. In a weird way, that gives them an advantage over their larger competitors.

You see, when every penny that you spend has to be scrimped and saved for, you tend to spend it more wisely. Add in the ability of small businesses to change plans quickly and to come up with creative solutions that don't need to pass through twenty rounds of director "approval" before being implemented and you've got a big leg up on slow-moving behemoths.

Let's think about it in terms of two animals running a race through the jungle. We'll match up an elephant and a gecko. Sure, the elephant is big and huge and hard to miss. He can use his size and weight to plow through the jungle knocking things over as he goes. He can obliterate his competition with a single step. Unless...that little gecko plays it smart. Sure the gecko is small, but he's also fast and has the ability to change directions quickly. By throwing a little zigging and zagging into the mix, he's not only going to avoid being stepped on, but he's also likely to find a few faster routes through the jungle. On any given day, the gecko COULD win the race.

That's why the small business that stops trying to emulate the big players and focuses on playing up their own advantages has a great shot of winning the paid search game. No one can afford to bleed money forever and we're starting to see some larger companies back off of their paid search spending because they're finding that they're spending more than they're earning.

Take this snippet from a recent article at MarketWatch...

Shmuel Gniwisch, founder of online jeweler Ice.com, got a conversion rate of less than half a percent for the $750,000 worth of ads he placed through Google during November and December, a key selling season for retailers.

For every 300 people who clicked on an Ice.com ad, only one actually purchased something, Gniwisch said.

"You couldn't get a worse performance," he said.

As a result, he's planning to cut his Google ad spending by 40% or more.

Now it's possible that MarketWatch isn't giving us the full story. Maybe Gniwisch has worked hard to test his landing pages, adapt his bid points and expand his keyword portfolio. Maybe Gniwisch has perfected his campaigns on Yahoo! and MSN adCenter to the point where he has a 14% conversion rate on each of them. Maybe Google just delivers horrible, awful traffic and he's right...it's all Google's fault and he SHOULD cut his spending.

If I was placing bets, I think I'd be betting on the idea that he simply threw up a ton of ads, set his bids to keep a number one ranking and then got upset because he was losing money. It wouldn't be the first time I've seen it happen.

I'm continually amazed at the inability of larger advertisers to fully grasp the concepts behind successful search engine advertising campaigns. After all, you would think that larger businesses would have the resources to be able to do proper ROI tracking, ad testing and to make advertising decisions accordingly. That said, it's been my experience that larger advertisers often do the worst job at properly managing their campaigns.

So what do small businesses need to do? Well they need to be the gecko. They need to stop focusing on the lack of money in their advertising budget and start focusing on their ability to make quick zigs and zags to create an effective campaign. Small businesses don't have to send copy revisions through two levels of editors, a content director and legal. They can simply sit down and plug in the changes. Small businesses don't have to worry about making the CEO happy by ensuring that number one ranking for the generic term that converts at less than a tenth of a percent. They can simply focus on managing the keywords that convert.

Start embracing your size and the advantages that size offers and you'll soon find yourself earning a positive ROI on your campaigns. Once you reach the point where you earn more than you spend, you'll find that you can spend almost unlimited amounts of money on your advertising campaigns, driving more traffic and more customers to your site.

Discuss this article in the Small Business Ideas forum.

January 9, 2007

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 > The Elephant and the Gecko, Why Small Business Can Win the PPC Battle