The presentation I gave to the Revolution conference got reported in Brand Republic. I’m very glad to see they thought it news worthy enough to comment on, less happy that they seemed to have missed the point. The article picks up on some research carried out by BT Business in June on SME Internet usage that found that only 8% of small businesses have a ‘fully comprehensive online marketing strategy’ – true enough – but the article then suggests that this is despite Web 2.0 tools being more suited to SMEs than larger enterprise. And this is where the article loses the plot.

Small businesses are starting to adopt web 2.0 tools to market themselves online precisely because traditional net marketing built on the ‘big iron’ of integrated campaigns using paid search and display ads and supported by a comprehensive SEO strategy is beyond the skill sets and resources (time and money) of most SMEs.

SMEs are struggling with online marketing and sales today and this is shown in the numbers. >40% don’t have web sites, <20% sell online and the percentage that make any significant sales online is much less than this. Running a web site is a costly, complex business that often requires the support of third parties to build, maintain and market.

Now look at the tools of web 2.0 – blogging, podcasting, photo and video sharing – adopted by millions of consumers because they are simple and powerful communication tools. These characteristics make them ideal for small businesses to build their net marketing strategy on.

SMEs have a direct connection with their customers in a way that larger enterprises struggle to mimic. That same piece of research from BT Business also found that 52% of small businesses get up to half of their revenue is from referrals, with 31% obtaining 75% of their work from word of mouth.

Now, if we put the costs and complexity of traditional online marketing alongside the growing importance of the Internet as a research and purchasing medium for consumers, it is apparent that SMEs desperately need to find a better way to market themselves online. This is provided through the tools of social media that are very well suited to the personal and conversational marketing style of small businesses that already works to their benefit offline.

I really believe SMEs have the need and incentive to drive innovation in online marketing using web 2.0 – much more so than big companies. We are starting to see this happen already with businesses as diverse as florists and PR experimenting with new forms of conversational marketing. And there’s much more to come.