Small Businesses Finding Their Optimal Search Spends

Spending on search advertising by small businesses was up 43 percent in the third quarter of 2010, but that number is a little bit misleading. That robust increase is actually down, way down, from the previous three quarters - when spending rose by 159 percent (Q2 2010), 91 percent (Q1 2010) and 111 percent (Q4 2009).

The data comes from the latest quarterly report by WebVisible.

The slower growth rate is a strong indication that small businesses are closing in on their optimal levels of spending on search advertising. The triple-digit growth percentages for much of the last year suggest the opposite, but if the current trend holds it will mean that small business advertisers are for the most part achieving their desired results with search.

Another contributing factor is that search advertising service providers are refining their processes to make it easier for advertisers to determine their optimal spend amounts. These are all positive developments for small businesses on the Web.

Another positive takeaway from the report is the fact that search ad spending in the automotive industry was up 9 percent for the quarter and 41 percent for the year - always a key indicator of economic recovery.

Another important point: Nearly 30 percent of all advertisers included video on their landing pages in the third quarter - an increase of more than 50 percent from a year ago. Not only that, but viewing video was the second most popular conversion action after clicking through to an advertiser's website.

Finally, small businesses increased their ad spending on Bing by 37 percent during the third quarter - in line with predictions that the Bing/Yahoo! alliance would result in a 40-percent share of the small business ad market by the end of the year.