Business Owners Rank Internet as Most Important Marketing Tool
BY Liz Webber
A majority say they plan to spend as much or more this year on online advertising and other Web tools.
Entrepreneurs now say the Internet is the most important marketing tool for their companies, but they primarily still use the Web for e-mail and research, according to a new survey.
The Capital Access Network Small Business Barometer, a quarterly poll of 250 business owners nationwide who accept credit cards from customers as a method of payment, found that small companies ranked an Internet presence or website as the number one method for business marketing, over such traditional tools as networking, public relations and print and radio advertising. However, respondents also said their top two online business-related activities are checking e-mail and researching business solutions.
"Our survey indicates that there is a definite disconnect between a smaller business's needs and their goals for meeting them," said Glenn Goldman, president and CEO of Capital Access Network. "There is this gap of understanding between the type of business and what the Web can do for you." Capital Access Network, based in Scarsdale, N.Y., provides merchant cash advances to small businesses through its main subsidiary, AdvanceMe.
While e-mail may top the list of Internet-related activities, many small businesses have begun implementing online advertising strategies. Of survey respondents, 59 percent use online ads and 68 percent utilize search engine optimization "sometimes" or "often."
Online social tools like blogs and message boards, however, are not as popular an option for business marketing. Almost half of small business owners never use a blog, 37 percent never visit message boards or chat rooms, and 59 percent have never tried the virtual world of Second Life.
"It's human nature, particularly when funds are scarce, to focus on what is known," Goldman said. "For some folks, maximum use of the Web is buying a book on Amazon."
Business owners are making efforts to increase their Internet presence. Forty-four percent say they plan on spending more on Internet tools this year compared to 2006, while 27 percent plan to spend the same amount as last year. The amount small businesses will shell out for their Web activities varies, with the largest group (45 percent) spending less than $2,500.
On the other hand, a quarter of respondents will not spend anything on the Internet this year. Of those, 30 percent named a lack of funds as the main obstacle preventing them from using the Internet for their business. "Clearly, folks are learning the benefits of the Web but in many cases are constrained resource-wise," Goldman said.
Overall, 46 percent of respondents say they derive at least some of their revenue from Internet sales. Based on that, Goldman said, "I think it's safe to conclude that not using the Web results in missed opportunities."