SEO and PPC in 2015: Small Business Survey

Digital marketing is seemingly gathering steam as an effective way to target customers online. But, to what extent have digital marketing methods penetrated the small business market?

Below, we summarize the results of our survey of more than 350 small business owners and managers on their digital marketing plans in 2015. We first describe small businesses' overall digital marketing share, and then delve into two specific digital marketing strategies: SEO and paid search ads.

The survey explores topics such as how small businesses are measuring their SEO success, planned spending on SEO and paid search in 2015, and satisfaction with in-house methods versus satisfaction working with a SEO agency or consultant. We also gathered comments on the survey results from several experts representing SEO or digital marketing agencies.

 

Digital Marketing Share

Small businesses are diversifying their marketing tactics, but nearly half are allocating just 20 percent or less of their marketing budget to digital.

To assess small businesses' general familiarity with digital marketing, we first polled respondents on their digital marketing share, which is the percentage of their marketing budget allocated to digital marketing methods, including a website, mobile application, social media, SEO, and paid search ads. We asked for an estimate of their 2014 digital marketing share and their planned 2015 share.

The data indicates a modest planned increase in digital marketing share for 2015. A number of companies plan to increase their digital share to 21-40 percent, 41-60 percent, or 61-80 percent digital marketing. However, the number of small businesses with 81-100 percent digital marketing share is expected to decline. Overall, this data suggests a modest move towards a more diverse marketing strategy and a greater balance between digital and traditional methods.

Despite this trend, the data shows nearly half of small businesses will continue to allocate only 20 percent or less of their marketing budget to digital strategies in 2015.

Ted Risdall, chairman and CEO of Risdall Marketing Group, conveyed surprise at this finding:

"For the biggest human communication revolution ever in mankind's history, it's still surprising to me the adoption rate to really get going on digital marketing. Seems to be 20-plus years now of having websites out there on the planet that we continue to slowly embrace these different, new ways to do things."
Ted Risdall, Risdall Marketing Group

Others, such as Andrey Gabisov, digital director at GLOBAL POINT NY, expressed the need to educate small businesses on how digital marketing methods can lead to measurable positive outcomes.

"From our own experience, we feel that plenty of small business owners don't know how to efficiently track the results of their spending in digital marketing. We try to educate the client and show them solutions that have a measurable outcome, so that they know the $10 they're spending will give them $100 in profit. When it comes to small business, companies have a limited budget for everything not only for marketing, and every penny counts. You must explain exactly how digital marketing will influence their profits."
Andrey Gabisov, GLOBAL POINT NY

Andrew Ruditser, lead technology coordinator and co-founder of MAXBURST, also emphasized the ease of measuring digital marketing methods' return on investment.

"As far as businesses' return on investment, it's very quantifiable. Measuring whether it's successful or not can be gauged very quickly from digital marketing, as opposed to traditional forms. They can see their ROI a lot quicker on digital, such as how much traffic they're getting. If it's something as simple as creating ads for a pay-per-click campaign, or remarketing, they can see how much traffic that's drawing. If they're selling something online, they can gauge whether that actually converts to a sale. If it's just basically getting leads on the internet from a form, they can see how many they're getting as well, and they can quickly figure out what that return on investment is."
Andrew Ruditser, MAXBURST

 

We can break down the data further into two groups: companies with 1 to 10 employees vs. companies with 11 to 500 employees.

When examining the same data with regard to the smallest companies versus larger small businesses, we find a couple of noticeable differences between the two groups:

​​1. Of those that spend most of their marketing budget on digital, most are the smallest-size businesses. More smaller-size companies report 81-100 percent digital share compared to larger companies. In fact, only 2 percent of larger firms leverage digital methods to that extent.

Risdall pointed out how the barriers to entry are actually lower with digital campaigns, meaning digital can be well-suited for the smallest of businesses.

"When you start to talk about digital marketing campaigns, they're often a lot less expensive than other types of campaigns. Costs in general are going to be a lot lower to do paid search, content marketing, or other digital campaigns. I think that it actually lowers the entry point for a lot of clients that want to get into it in the first place and start doing something meaningful. That first something meaningful is having that store front online and being there when people are searching for the kinds of things you do. We can serve a lot of smaller budget clients than ever before because of digital marketing."
Ted Risdall, Risdall Marketing Group

2. There is greater diversification of marketing methods in larger companies, as evidenced by a greater number of larger-size companies with a 21-40 percent or 41-60 percent digital share compared to smaller companies.

Mike Rosa, director of marketing at 180fusion, addressed the level of uncertainty among most small businesses with trying newer digital marketing methods.

"The biggest thing that jumps out at me in the one-to-10 employee category is the level of uncertainty. I think it just has to do with the sophistication of the different organizations. The more individuals you have at an organization to take these things on, the bigger advertising budget you have, so you start to explore. If you're small, you have to stick with what you know works, and what you feel is going to provide the most benefit to your business. I think there's still a fair amount of education that needs to be done, especially for these smaller organizations, about how to succeed [in digital marketing] and what the benefits to succeeding are."
Mike Rosa, 180fusion

 

SEO Practices

Almost half of small businesses are already using SEO tactics, but there is still some resistance and uncertainty. There is less adoption in the smallest of businesses. 

Search engine optimization is a challenging area of digital marketing for businesses of any size due to the level of specialized attention required and shifting understanding of best practices.

Below, we break down the number of small businesses that currently, plan to, are uncertain, or are unlikely to actively use SEO methods as part of their digital marketing strategy. We separated out the smallest and largest companies in the sample to see if there were any notable differences.

Many small businesses have already adopted SEO strategies or plan on doing so. Of the smallest businesses with 10 or fewer employees, 30 percent report actively working on their SEO beginning in 2014 or earlier, through methods, such as frequent blogging, link building, and keyword optimization. This figure rises to 45 percent for larger companies with 11 to 500 employees. An additional 9 percent of small companies and 7 percent of larger companies plan to begin actively using SEO tactics in 2015.

However, there is still some hesitance toward SEO among other small businesses. Approximately 38 percent of businesses with 10 or fewer employees stated they are unlikely to do SEO in the future, with an additional 21 percent uncertain if they will ("neither likely nor unlikely"). For companies with 11 to 500 employees, an equal proportion reported uncertainty.

Stoney deGeyter, CEO of Pole Position Marketing, commented on these results:

"It is actually surprising to me the number of respondents that are not likely to work on SEO or are ambivalent toward it. I understand that not everyone is ready for SEO, but this tells us there are still a significant number of businesses that simply don't see the value in it at all. That means we still have a lot of education to do. On the other hand, there is a far greater number of responses for people already doing some sort of SEO. My guess, based on our experience, is that a number of these are doing some form of SEO but are probably not fully invested in it."
Stoney deGeyter, Pole Position Marketing

 

For comparison, we asked small businesses about their practices and plans for paid online advertising methods, such as Google AdWords. 

The following outcomes result from the data:

  • There is greater adoption of SEO methods compared to online advertising. Only a quarter of small businesses report currently doing online advertising, compared to SEO's 45 percent.
  • Slightly fewer small businesses plan to begin using paid online ads in 2015 (5 percent) compared to those who plan to begin SEO in 2015 (9 percent).
  • There is more resistance to paid ads, with 42 percent of small businesses stating they're unlikely to do online advertising in the future, compared to 25 percent unlikely to do SEO.

Online advertising methods, such as Google AdWords, can be difficult for some small businesses to implement due to upfront costs and the time and knowledge required to run campaigns. Garry Kanfer, vice president of Big Drop Inc., described these difficulties.

"AdWords is tough because you pay per click (PPC), and you really need to know what you're doing. It's a full-time job for somebody. You need a big pocket to run a great AdWords campaign. You need to lose a lot of money to learn what works, and not every business has that budget."
Garry Kanfer, Big Drop Inc.

MAXBURST's Ruditser added that while pay-per-click advertising can be time consuming, it can be an effective short-term tactic to pair with long-term SEO strategies.

"A really good paid strategy involves a firm to go in there constantly, tweak ads, and tweak the budget. The spend changes all the time so you really have to keep up with it. If it's done correctly, it's actually very effective. SEO is a long-term strategy, and SEO is a very important strategy for every business to do online, but it doesn't happen overnight. If a company needs results quicker, then I typically do a combination of organic SEO and PPC because PPC is instant gratification. They put X amount of money into it, they're going to get visible on Google for certain keywords. Whereas with organic, it could take some time, six months or more, for results to happen. It's a much longer-term strategy."
Andrew Ruditser, MAXBURST

 

Spending on SEO and Online Advertising

Spending is predicted to be mostly flat in 2015 for both methods. However, almost a quarter of companies that currently do paid online advertising plan to increase their spending on it.

We honed in further on short-term plans for digital marketing by looking at predicted 2015 spending allocations. Below, we look at 2015 planned spending compared to 2014 spending on SEO and paid online ads. This question was only asked to respondents that stated they currently and actively use that particular digital marketing tactic.

Small businesses that do SEO largely predict that their spending on SEO this year will be relatively flat compared with spending in 2014. In fact, 71 percent report that their spending will remain approximately flat, whereas 14 percent report an increase by a significant degree and 10 percent report a decrease (5 percent were uncertain.)

Joseph Cahill, chief strategy officer at Straight North, was not surprised by these results.

"I don't think there's a big wave, or a change in understanding about SEO and the value of SEO. I don't ever expect that to happen. Especially for this particular marketplace, [the survey results] don't surprise me."
Joe Cahill, Straight North

For online advertising, the trend is similarly flat, but with a larger amount of businesses planning to increase spending. Among respondents, 61 percent predict approximately flat spending, compared with 23 percent predicting an increase and 10 percent predicting a decrease (6 percent were uncertain.)

These results indicate that a number of businesses currently using online advertising are finding value in it, and thus are increasing their spending on online advertising in 2015.

Ken Braun, founder and chief creative officer at Lounge Lizard, noted how companies that dedicate upfront time and money to figuring out what works for their business will be able to achieve the results they want from online advertising.

"I’ve often seen small business owners who are not educated in this area [online advertising], spend a couple thousand dollars a month and have nothing to show for it. Why? Because they didn’t test on a daily basis. This is what’s so great about digital marketing: it’s a real time engagement where you can change messages on the fly on the online advertising portals. You can change the landing pages. You can change the call to action. You can see immediate upticks in click-throughs, and immediate upticks in sales conversions, and measuring keywords that are working and ones that aren’t, as an example. Once they start testing, they can get into that sweet zone, where they dial in on an ideal cost per lead and ideal cost per sale.”
Ken Braun, Lounge Lizard

 

Measuring SEO Success

Referral traffic from search engines is the number one metric used by small businesses to track SEO success. Roughly a quarter of small business owners and managers do not track SEO metrics or are not sure of what metrics they use.

An important part of any marketing strategy is tracking success metrics to understand the return on investment. Digital marketing makes this even easier by providing detailed analytics that you can access to understand your reach and your audience's behavior.

However, there is a learning curve to any analytics platform, and there are differences in opinion and in understanding of which metrics are the ideal measurements of success.

When asked which metrics they use to measure the results of their SEO strategies, small businesses reported the following:

About a quarter of small business owners and managers do not keep close track of measuring their business's success with SEO. About 10 percent are uncertain how they measure their SEO results, and another 15 percent report that they do not measure at all. We only asked this question to those respondents that stated their company actively uses SEO tactics on their website.

Of the metrics that small businesses are using to track SEO success, the amount of traffic from search engines is the metric used by the largest proportion is 54 percent. Next common is the number of leads and conversions, used by 45 percent of small businesses, and finally keyword rankings, which 37 percent use as a metric (respondents were able to select all that apply). Only 2 percent said they use other metrics outside of these three.

SEO agencies and consultants often fight the use of keyword rankings as a key success metric.

"Without the proper measurement, businesses are chasing all the wrong things and often disappointed when they don't "feel" like SEO is working. Either the [keyword] rankings are there but business isn't growing, or the business is growing but the rankings aren't there. Either way, there is disappointment from the client. My philosophy to web marketing is if we can grow your business without getting a single keyword ranked on Google, we've succeeded. Rankings simply don't grow businesses. They are a means for growth but not growth itself."
Stoney deGeyter, Pole Position Marketing

"It doesn't surprise me that keyword rankings are used by some as a performance measure. We fight that fairly vigorously with our clients, but it doesn't surprise me that the number is as high as it is. All of the things going on in the world of search engines, such as localization, personalization, search history, long-tail keywords, I think take away from the value of keyword search rankings as a metric. We put less and less value on it."
Joe Cahill, Straight North

 

When we segment the data further into those that hire a SEO agency or consultant, and those that use in-house resources for SEO, several differences emerge.

Small businesses that outsource SEO more frequently report uncertainty about which metrics they use, versus those that do SEO in-house more frequently say they do not use metrics at all. Those businesses with agencies or consultants may, for instance, receive reports with metrics, but they are not sure what the metrics are or how to interpret them.

While there may be some differences in opinion on which metrics are most valuable to track, everyone can agree that metrics of some kind should be tracked in order to understand the value of the resources being invested in SEO.

"I think every campaign needs to have established metrics that are being tracked. This is the only way to compare and see what is successful and what is not. There can be any number of goals worth tracking that are not specifically conversion related, such as downloads, engagement, and brand reach. It's up to each business to determine what is worth measuring. While the ultimate goal is business growth, measuring and improving many of the other metrics first can and ultimately will lead to business growth. If you only track how many people cross the finish line, you get no insight into the reasons why the others didn't make it. However, tracking these micro goals gives insight in how the site can be improved in a way to get more people across that finish line."
Stoney deGeyter, Pole Position Marketing

"We believe, at the end of the day, that what most of our clients are paying for are leads. The way you get leads is through more traffic, but also by getting qualified people to come to your site. There is a difference between a conversion and a lead. A conversion is something that happens on your website where an activity occurred, such as a form was filled out or a phone call was made. A lead is when someone says you have what I need and I'm interested to know more. We have metrics that say 40 to 50 percent of all inquiries are not leads. So, once you get that kind of reporting, you can put a more granular and discrete value on SEO. Also, it gives the client an opportunity to understand the real cost of their business development activities and have a more informed opinion on the value of the services that are being provided."
Joe Cahill, Straight North

 

Satisfaction with SEO Agencies and Consultants

Most small businesses that outsource their SEO are satisfied with their service provider.

Next, our survey examined the level of satisfaction among small businesses that hire an outside agency or consultant for their SEO.

For background, we determined how many small businesses currently utilize in-house resources for their SEO, and how many outsource SEO to an agency or consultant:

According to the survey, of small businesses that outsource their SEO to a consultant or agency, 66 percent are very or somewhat satisfied with the service provider. In comparison, 10 percent are somewhat dissatisfied with their agency or consultant. Around 24 percent report a neutral feeling towards their service provider.

We spoke with a few agencies on what best practices can be used to improve the agency-client relationship.

"Because SEO is dynamic, and because it's not as well understood as other business generating opportunities, to some it's a black box, and it's hard to understand what you're getting for it. We are of the firm belief that transparency and accountability in the long term can increase people's understanding of both the value of SEO and the performance of the SEO agency. We provide activity-based reporting to our clients. Every month, you know exactly what you received for your money, from both an activity and an output perspective. We validate the results by filtering the traffic data to provide both the gross activity and the net activity, the inquiries versus the valid leads. We believe the more transparent the agency is, the easier it is to display the value proposition of SEO services, and the more satisfied and informed our clients will be."
Joe Cahill, Straight North

"The most important thing is communication and being on the same page regarding expectations. That's not as easy as it sounds. When a client's money is on the line, it doesn't matter how much you tempered their expectations, they still want to see results quickly. SEO isn't quick. The other main thing we try to communicate with our clients is that SEO is a team effort. Not just our team, but us working with their team. If they are responsive and have someone who can work with us, then their SEO campaign is more likely to be successful. Clients that disregard our advice and recommendations or fall out of communication for a while will see their results suffer. By and large, for every five hours of work we do, there is at least an hour of "homework" for the client. If the client isn't doing their job, we can't do ours."
Stoney deGeyter, Pole Position Marketing

 

In a similar vein, we asked companies whether they are likely to continue outsourcing their SEO in 2015, vs. bringing SEO in-house. For comparison, we also asked companies that currently do in-house SEO the likelihood of hiring a service provider to do their SEO in 2015.

The results overall indicate a level of satisfaction with current methods.

However, small businesses that do SEO in-house are more likely to continue doing so, compared with those that outsource SEO. 78 percent of companies that outsource SEO state that they are very or somewhat likely to continue outsourcing SEO in 2015. On the other hand, 96 percent of those who do SEO in-house are very or somewhat likely to continue.

Note that those who do SEO in-house may not have someone fully dedicated to SEO. It may be just a part of someone's responsibilities. Additionally, the survey outcome may not be an indicator of feelings toward SEO outsourcing in particular, but of outsourcing in general.

"The idea of doing it in-house is status quo. The idea of using and continuing to use an external agency can vary a lot depending on how well the agency demonstrates the value proposition. It's harder to fire a salesperson, it's easier to cut an SEO line item from a budget."
Joe Cahill, Straight North

 

Conclusion

The survey results overall show limited adoption of digital marketing as a major portion of marketing strategies. The experts we spoke with about the survey results all emphasized the usefulness of digital marketing tactics for most small businesses and the need for agencies to provide further opportunities to educate small business owners on these methods.

 

Survey Respondents

Clutch collected this survey data from 354 small business owners or managers distributed across the US. The largest respondent group is made up of companies with less than 10 employees and less than $1 million in revenue. The majority of companies surveyed predict relatively flat revenue growth in 2015.

 

For more information or to provide feedback on our survey, please contact [email protected].