Of the 102 businesses that responded to Internet Retailer’s recent Search Engine Marketing survey, nearly half (44%) have revenues of less than $1 million. Another 25% have revenues of between $1 million and $5 million. The responses to this survey can give us a deeper understanding of how smaller businesses are using and succeeding with search marketing, especially Web-only businesses which comprised 67% of the respondents.

Here are a few top-level statistics from the survey:

  • Number of businesses who work with a keyword inventory of under 100 words: 27.7%
  • More than 25% of site traffic driven from natural search: 51.5%
  • Is that percentage increasing?: 53.5%
  • More than 25% of site traffic driven from paid search: 28%
  • Is that percentage increasing?: 35.6%

In the coming year, businesses will be making some changes to their search marketing strategies. Just over 40% of these smaller businesses will shift some of their budget to Bing. The gain for Bing will come at the expense of Google (17.6%), Yahoo (14.7%) , other search engines (4.9%) and other marketing budgets (15.75). This change may be taking place because 11.2% of respondents says that Bing yields the highest conversion rates.

Bing also touts its excellence with respect to searching images. Businesses are expanding their search efforts beyond keyword purchases and natural search techniques such as header tags  and into images. Overall, 36% of businesses are already sending images to search engines and another 40% are working on this process.  Participation in image-based search is particularly high for Web-only vendors and for manufacturers. Shar VanBoskirk, a vice president and principal analyst at Forrester believes that images “can enhance the click-through rate for a paid search ad or natural search result.”

The bottom line from this study seems to be that search is an indispensable marketing tool, especially for online only retailers and accounts for 75% of the entire marketing budget for 20% of firms who participated in this study. As they adjust how they allocate their budgets to different search engines and incorporate images, they’ll be looking for a bigger return on their investment.

[Source: Siwicki, Bill. Internet Retailer Survey. Internet Retailer. May 2010]