The Internet as a marketing tool is still fairly rudimentary for small and medium businesses in the local market. The vast majority of businesses have developed web presences, but there is relatively little promotion of those web sites beyond integrating URL’s in off-line marketing, participating in online directories to varying degrees and investing in Google search marketing and other pay-per-click solutions, either directly or through intermediaries, to increase traffic.

Screen shot 2009-10-29 at 3.57.56 PM.jpgThe Kelsey Group has done extensive research on the media spending patterns of small and medium businesses (SMB’s), and has shown that the intent to spend online is higher than the actual amount spent online. The companies, which spend an average of about $1900 a year on their web sites, are cutting their spending on cost per click solutions and shifting their focus to applying Web 2.0 techniques to Internet marketing, Kelsey observed late last summer.

I believe that a basic problem for these SMB’s is the passive nature of their core web presence. The web site is typically a marketing brochure, with relatively static content, that is built on Web 1.0 protocols; this approach, which is a fairly lateral transition of offline marketing processes into the online world.

Recent research shows the potential value of a small business being able to create a web footprint that puts them more squarely in front of consumers on the web — and that means as a preferred resource, or a high-ranking source in natural search, not as a paid advertiser intersecting a search.

A  survey by TMP Directional Marketing, as reported in eMarketer, concluded searches for local businesses online are highly specific and largely focused on connecting with a business the consumer already knows. While 26% of the searches reviewed by TMP attempted to “find a business that had the products or service needed,” and 12% were focused on researching products and services, 57% of the searches were focused on getting specific information about a business they had already identified.

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In addition, the outcomes of these searches were highly active.

Nearly four in 10 US Internet users (37%) who conducted an online local business search in 2009 ended up visiting the store in person, according to TMP Directional Marketing and comScore.

The challenge for a SMB is very clear: How do I create a digital footprint that gives me prominence on the search results when a consumer is looking for information specifically about me? And, how do I leverage existing social connections online to increase my ability to drive usage and awareness of my web site, leading to more leads and more business?

Compete recently did some research on the activity of home improvement shoppers when they visited manufacturers’ web sites. These are largely national players, so the activity is more generally-focused than the activity of consumers doing local searches. However, Compete’s research shows that the more relevant content a business has on its site, the more likely a consumer is to adopt the product or service.

There is a race heating up as these manufacturers learn how to best capture the new consumer: The consumer who not only speaks with friends and family about the home project, but also goes online to help determine what he or she will do, buy, and build. When asked how likely they would be to return to the manufacturer’s site if the project could involve their product, a whopping 88% said they would either be “likely” or “very likely” to return, making the Internet an important, and growing, battlefield for creating product loyalty and enhancing your brand health.

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Those SMB’s that can integrate Web 2.0 techniques and technologies into their web marketing have an embedded advantage in expanding their web footprint and driving more traffic to their sites. The essence of a Web 2.0 strategy is developing a content-marketing program. While this can appear daunting at first, the essence of a good content-marketing program is taking the time to create and organize information that will be of interest to a customer or prospect. The benefit of Web 2.0 technologies is that the process of content-marketing doesn’t have to be done all at once; it can be built into a regular element of the marketing process.

What’s the justification for shifting your day-to-day approach to focus on content-sharing? The large pool of consumers who are on the web, searching for solutions and missing you every day.

Note: Our DesignSherpa and CommunitySherpa internet marketing services at NCI are designed to help businesses accomplish this transition seamlessly and at a low cost. Check them out here and here.