Small Businesses Still Not Sold on Online Advertising

While online advertising increases, small businesses remains skittish

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A new survey by a Boston Consulting Group revealed that small businesses generally proved reluctant to purchase online advertising, reports Businessweek.

This comes as Google, Bing and Facebook have recently updated their advertising systems to make online ads more attractive to small businesses.

The survey which polled 550 U.S. companies with 100 or fewer employees found the average company only spends 3 percent of its advertising budget on Web ads. While small companies typically have small advertising budgets, this definitely shows a reluctance to shift from print ads to online ads.

Another takeaway from the survey was, a word of mouth referral from a trusted source was needed before owners would explore online advertising. The study suggests that horror stories have turned off many owners from utilizing online ads, and that a success story from another small business owner usually was needed before any online advertising was purchased.

The companies in the survey named Google, Yelp, Facebook, Yahoo! Local, YP.com, Twitter, LinkedIn and Superpages.com (in order of popularity) as sites where advertising had previously or was now being purchased from.

Experts note that the money not being used for online ads was often used in other ways online such as improving companies’ websites and other forms of marketing.

ACROSS THE WEB
  • Lanell Beckles

    It’s amazing, but one thing that really stuck out to me is that companies would rather “beautify” their website, but fail to understand that WITHOUT traffic or any body walking through your door, businesses DIE!

    It’s a lack of knowledge on the part of small business and somewhat “old thinking” about how business is run today. It’s NOT about spreading the word via flyers and stuff, but instead, spreading a digital message that is MUCH faster than sound. It’s the reasons why marketers are paid so much.

    If small businesses got this point, they would INSTANTLY see profits increase.

    • http://twitter.com/GetLocable locable

      The flip side of course is that sending droves of traffic to a website that is poorly crafted to engage visitors and advance them to take action equally ineffective.

      • Lanell Beckles

        Very true. But at what point do you just NEED to take action before you plan your money away?

        • http://twitter.com/GetLocable locable

          Yea, paralysis by analysis is very real – regardless of the medium – since local business owners generally are just plain bad at marketing.

          I’m not advocating over-planning just making sure you don’t forget to build the foundation before you build the house – in the case, the foundation is your digital presence and the house is marketing it.