Small Businesses Still Not Sold on Online Advertising

While online advertising increases, small businesses remains skittish

google adwords

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.