When, more than a decade ago, Internet evangelist Patricia Seybold pronounced “”if you’re not an active Internet citizen by the mid-1990s you’re likely to be out of business by the turn of the century,”” it all seemed so simple: Set up shop, build a Web site, and even the tiniest firm could take on

the giants.

The problem is that the Internet is a big place, and if one thing has become clear in the years since Seybold uttered her prophecy, things are a lot more complicated.

“”It almost goes without saying that SMBs should be looking online [to do their] advertising and marketing,”” says Chris O’Hagan, a partner with Vancouver-based eMage eMarketing. “”I don’t think enough are. Many have that fear of the dot-bomb, and that the Internet somehow isn’t real.””

Part of this, to be sure, is simply small business’s traditional antipathy to advertising. Less than half of all Canadian small businesses advertise actively, says Paul Emmanuel Paradis, senior economist with the Canadian Federation of Independent Business (CFIB). And that number hasn’t shown any sign of increasing.

“”Most small businesses do most of their marketing by referrals or word-of-mouth,”” Paradis says. “”Eighty per cent of small businesses say that word-of-mouth is the essential part of marketing, and 41 per cent say that it’s the storefront. Either way, it shows that the non-advertising part of marketing is important. So anything involving networking is going to be very important.””

SMBs have become increasingly active online. Fully 80 per cent of the CFIB’s membership uses the Internet, though mostly for e-mail and Web surfing. Still, 53 per cent have Web sites, demonstrating that many small businesses believe that the online storefront is as important as the brick-and-mortar type. Nevertheless, these online presences are too often just a front without a store.

“”Quite a few small companies already have some kind of Web site,”” O’Hagan says. “”But most businesses just sit there with a brochure that they can refer existing clients to, and not a real marketing tool.””

Paradis notes that only about 20 per cent of Canadian small businesses are selling products online. “”But you have to keep in mind that most small businesses are small, and half of our members have four employees or fewer,”” he says. “”It’s normal that they don’t have the time or the resources to use the Internet as effectively as they would like to just now.””

But there are signs that small businesses are getting the hang of the Internet as a participatory and active medium, and this has opened up a whole new world of business networking possibilities. “”It’s clear that small businesses are getting involved with online business relationships,”” Paradis says. These relationships can take a number of forms, from online marketplaces to affiliate programs. The trick, however, is to match methods to business plans and products.

“”If you’re selling big-ticket items, affiliate marketing can really work well, but there are a lot of hidden costs,”” O’Hagan says. “”In my experience, the fees associated with affiliation are too high for it to be a really effective method for most small businesses.””

O’Hagan insists that you have to hit Internet surfers where they live, and most of them — whether consumers or corporate executives — live on the Internet’s search sites. “”The best bang for your buck is the search market,”” he says. “”Whether it’s a pay-per-click or natural search, you do very well.””

In fact, search engines are the place where SMBs can create word of mouth in a couple of complementary ways. The first is to build sites that contain text that search engine webcrawlers can read and file in their databases. Loading pages with hidden meta-text has become next-to-useless. More important is a site that is clear, explicit and whose URL appears throughout the Internet. A search engine can only find your site by following a link from another site, so don’t be afraid to list your URL in as many online directories as possible.

The other option is paying for search terms. Most search engines “”sell”” words, so if you make handkerchiefs, you can buy search terms like “”sniffles”” and “”sneeze,”” so your page will be more prominent when a Web surfer with a runny nose runs a search for his symptoms. “”It pays to buy search terms,”” O’Hagan says. “”Small businesses have to get found in search engines. Everyone knows who the big guys are, so you have to take steps so people know who you are.””

Contact smbeditor@itbusiness.ca

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