PPC for SME: Small But Growing

  |  March 8, 2004   |  Comments

Most small- and medium-sized businesses haven’t yet fully recognized the value of pay-per-click, but interested prospects can swell the ranks over the next year.

Small- and medium-sized businesses (SMEs) are beginning to buy their way into the paid search market, according to a report from The Kelsey Group and ConStat, but the majority haven’t yet recognized the importance of pay-per-click (PPC) pricing. The collaborative study revealed that only a small portion of SMEs are currently involved in PPC, but there is potential for a substantial number to join the ranks over the next year.

Culled from the responses of 460 advertising decision makers at small- and medium-sized enterprises, the survey found that 11 percent were currently involved in PPC, and 34 percent were interested in using PPC. Nearly three-quarters (73 percent) of the interested prospects expect to implement PPC within the next year.

Greg Sterling, director of The Kelsey Group’s Digital Directories: Interactive Local Media Continuous Advisory Service, commented on the inspiration for SMEs to utilize PPC: "In our sample, which has a comparatively small number of actual PPC users, but a larger number that are ’interested in’ it (combined total of these categories was 200), the attraction appears to be the perception that PPC will drive traffic to company Web sites and that it’s a low-cost method of acquiring customers."

Paid search players have been working on ways to bring SMEs, and especially local businesses, into the ranks of their advertisers. Most recently, FindWhat.com teamed with Verizon SuperPages.com to introduce PPC pricing to the Internet yellow pages site. Google is beta testing features that let advertisers target their ads by region, and Overture is working on local search that involves targeting by radius.

Sterling found that SMEs are primarily interested in using PPC to drive traffic to Web sites, with two-thirds of respondents claiming traffic as the major reason to implement the program. More than half (56 percent) cite the low cost of PPC, while 52 percent believe PPC is a less expensive method for acquiring customers.

The majority of respondents — 43 percent — indicated they weren’t interested in PPC at all, while 12 percent were unsure. Sterling cites the perception that PPC is a niche activity, as 60 percent of those who were not interested believed paid search was not appropriate for their businesses.

Despite current misperceptions, PPC captures 23 percent of advertising budgets, and the survey found evidence that 54 percent of PPC users expect to increase their paid search activities over the next year.

Currently, SMEs that are using PPC have little need for outside management resources as 48 percent are using only one general message for all ads, and updating it infrequently.

"Only 20 percent [of respondents” expressed an interest in or were using outside administrators. However, as PPC expands beyond this population of ’early adopters,’ there will be a definite need, in our view, for outside help to create and manage campaigns. This is especially true of traditional small businesses that have historically relied on ’offline’ forms of advertising such as newspaper classifieds and print yellow pages," Sterling noted.

ClickZ Live Toronto On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ClickZ Live San Francisco Want to learn more? Join us at ClickZ Live San Francisco, Aug 10-12!
Educating marketers for over 15 years, ClickZ Live brings together industry thought leaders from the largest brands and agencies to deliver the most advanced, educational digital marketing agenda. Register today and save $500!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

Gartner Magic Quadrant for Digital Commerce

Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.

Paid Search in the Mobile Era

Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.

WEBINARS

Resources

Jobs

    • GREAT Campaign Project Coordinator
      GREAT Campaign Project Coordinator (British Consulate-General, New York) - New YorkThe GREAT Britain Campaign is seeking an energetic and creative...
    • Paid Search Senior Account Manager
      Paid Search Senior Account Manager (Hanapin Marketing) - BloomingtonHanapin Marketing is hiring a strategic Paid Search Senior Account Manager...
    • Paid Search Account Manager
      Paid Search Account Manager (Hanapin Marketing) - BloomingtonHanapin Marketing is hiring an experienced Paid Search Account Manager to...