Small Business Out of Search Ads?

Search advertising is expected to boom in 2007, but small and medium sized businesses may not be able to get in on the action. A new study indicates the bulk of search ads will go to larger companies and brands.

by Kristina Knight

According to a report in Business Week, small brands are getting clickthroughs but they aren't getting the customers. That, in turn, is leading more small and medium businesses to actually cut back on search ad budgets. Why aren't they getting the clientele? Apparently as more users shop around online, the clickthroughs from search ads are wasted. For example, e-tailer BabyAge bought $1.2 million in search ads, received many clicks but actually netted fewer buyers than clicks. The result? They basically doubled their search ad costs.

On the other hand, big brands are seeing large increases in revenue because with their larger inventories they can lower prices - meeting the consumer's want of low prices - and taking those customers from smaller businesses. That drives the cost of their search ads down.

As more big brands move into search advertising, the smaller brands are moving to social marketing. Trying ads on blogs or niche shopping sites rather than trying to compete with big brands for a small piece of the search pie.

Tags: niche marketing, search marketing, social marketing

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Our clients are seeing similar barriers - but they have a secret weapon to use... Awareness for paid Search Advertising is at an all-time high. As a result, the cost of a click is up... the "real estate" is cluttered with many other advertsiers, click rates are down... and the ROI's seemingly decreasing. But new technology (like in VisitorTrack) can let B2B website owners know who is clicking... what they want.. and how interested they are in a product without any Visitor regsitration. It is safe.. Completely transparent to the experience. And.... very powerful. Now how much value can be rendered from a click from Google when you can also get this detail? Additional technologies will continue to come into play in response to the economic challenges the evolving SEM models impose.

Posted by: CJ on January 18, 2007 01:29

Kristina, you should not be at all suprised that BabyAge would net more clicks than customers. Is it even possible for the equation to be reversed? But, I would disagree with the notion that small business is left behind. I would say that small businesses who are unable to stay on the leading edge are left behind. From very small budgets to mid-size budgets, geographic targeting and harnessing the "long tail" of your particular keyword market is keeping the ship well afloat. What you fail to touch on are the differences in execution between PPC successes, and PPC failures. It is not a question of large or small. It is a question of being "best practice ignorant". StructuredWeb works with over 1800 small to mid-size businesses, with my division managing over 300. I can assure you that among the businesses running PPC, less than 1% have any idea what they are doing. Dont get me wrong, they have advanced to the 5 or 10 yard line, but it is the final push into the endzone that pays the bills. Right? Anyone interested in this topic can reach out to me directly, or register for a free online seminar at this link: http://www.sw.structuredchannel.com/SWAPPID/120 I can be reached at tom.ritter@structuredweb.com.

Posted by: Tom Ritter on January 23, 2007 15:43