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Over two thousand marketers surveyed by Marketing Sherpa listed their top social media marketing challenges for 2010. Based on the results, the most important items appear to relate to measuring performance and ROI, as well as converting social media fans/friends/prospects into paying customers.

Posted via web from Kym Wong’s posterous

Posted via web from Kym Wong’s posterous

Posted via web from Kym Wong’s posterous

Today, over 95% of Internet users use the major search engines – Google, Yahoo! and Bing – to find the products and services they need. Internet Marketing is not just for big business anymore – the Internet is increasingly used to look for local businesses.

The Kelsey Group, a market research firm, reported that in 2008 “83% of U.S. households used the Internet as an information source when shopping locally for products and services… the Internet will soon surpass newspapers as a local shopping information resource.”

The Number 1 Challenge for Businesses Online

While the volume of Internet searches continues to increase, businesses who want to tap into this marketing opportunity face some significant challenges online. First, the web has become an increasingly competitive space. The number of websites has proliferated over the years and according to some estimates there are now over 180 million websites and about 9 billion indexed pages on Google.

In addition, web browsers have become increasing sophisticated users of the Internet. 84% do not even go beyond the first page of search engine results. Indeed, a Cornell study found that online searchers focused primarily on the top 5 results on the first page with the top 3 Google results getting 79% of all clicks. Given these two factors, the number one challenge facing all businesses today is getting found online.

Getting on Page One of Google

So how can your business be found by searchers looking for what you have to offer? In order to tap into the huge volume of local searches each month, your business website must appear ideally on the first page of the search engine results to get noticed and to get clicks.

By appearing on page one, your offerings will be placed right in front of prospective clients at exactly that key moment when they are actively searching for your service. Since Google is the dominant search engine (with 65% of the search market vs Yahoo and Bing), lets take a look at the 3 major ways in which your business can be positioned on page one of the search engine results.

1. Local Business Listings

The cheapest way to get on page one is to create your business listing using Google’s Local Business Center. This service is free and should absolutely be a ‘must do’ for all business website owners. Because Google is placing these local business listings first in the search results (i.e. before showing other web matches), it is critically important that you create your listing and position your business in the top 7.

This can be done with proper use of keywords. When setting up your Google local listing, be sure to select the right category for your business.  In addition, inserting the keywords or search phrases that you want to rank for in your business listing (especially in the title) will also improve your search rankings.

2. Pay Per Click Advertising or Paid Search

Pay per click (PPC), also known as Google AdWords, is the quickest way to get on Page One of Google. Paying the search engines for top placement gets fast results and generates immediate traffic to your business. Unlike the Yellow Pages and other forms of print advertising, business owners pay only for results (when their ad is clicked), can measure the ROI on their advertising dollars, and can track results efficiently.

3. Search Engine Marketing or SEO

The 3rd way to be found on page one of Google, and the best way to generate high quality leads online, is by having your business appear in the top 10 search results. Search Engine Optimization (SEO or organic search) is aimed at achieving the highest possible search engine results page (SERP) rank for a web site/page. SEO is an art not a science as the algorithmic elements that comprise search engine rankings are constantly being adjusted by the search engines.

Boosting Your Search Engine Rankings

Keywords and links are two of the biggest factors in terms of boosting your search rankings. “On Page” SEO refers to the optimization of your website page elements and content so the Search Engine can find your webpage for your targeted keywords.

“Off Page” SEO refers to the text and “inbound” linking from other web site pages to your web site pages. Since it takes time to build links in an organic way and to show results (usually several months depending on the competitiveness of your keyword), SEO is a longer term investment relative to PPC. Compared to traditional print advertising, SEO still offers a higher ROI especially for businesses that have high customer lifetime values.

By effectively combining these 3 lead generation strategies (local listings, paid search, and organic search) you can create a dominant presence for your business online. Your enhanced web visibility will allow you to capture active prospects, improve brand awareness, build a loyal following, and be recognized as the eminent authority and leader in your local market.

Google is continuing their march to fill up the prime areas of your screen with their paid ads. In an earlier post, I pointed out that only the top 7 local business listings are now being displayed (vs the top 10 previously).

The search engine has now removed phone numbers from local business listings in order to free up more real estate for sponsored ads, according to Aaron Wall. As more ads fill up the ‘above the fold’ area of the screen, organic search listings are being pushed down with the exception of the top 1 or 2 ranked websites.

This new development highlights the importance of getting to the top spots of the organic search rankings so that your website can be visible above the fold. Since it takes time and resources to get to these spots (unless there is very little competition in your niche), this leads back to doing the proper keyword research so that you’re targeting the most important keyword(s) for your business.

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Small businesses spending more on marketing are also expecting increases in revenues. E-marketer also reports that businesses are shifting their budgets away from traditional to cheaper digital advertising, including social media and search engine marketing.

Another survey reported by Small Business Trends asked respondents to identify what they felt would be the MOST important tools for SMBs in the New Year. The top 4 responses were:

• Search engine marketing
• Email marketing
• Public Relations
• Social Media

According to the report, more than 68% of small business owners will be increasing their social media spending. This appears to indicate that small businesses are seeing positive ROIs and gaining confidence in using social media marketing to get results.

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As you can see in the image below, instead of displaying the top 10 local business listings, Google is now only showing the top 7.

This makes it just that much more difficult for local businesses to show up on the first page of a local business search in competitive markets.

This change also re-emphasizes the importance of optimizing your business listing so that you can improve your business’ local search ranking position.

Make sure you use the appropriate categories and keywords in your local business center descriptions and try and get additional citations from local directories as well.

It looks Google made this change in order to free up real estate on the first page for their new Local Listing Ads service. For a flat monthly fee, Google will display your business ad in the sponsored search section as shown below.

This service is currently only available in San Francisco and San Diego.

You can learn more about the Google Local Listing Ad service in the video:

According to a Forbes/E-Marketer study however, the most effective online marketing tactic, for both small and large firms, is SEO or search engine optimization. This was followed by email marketing, then pay-per-click advertising.

The results are not surprising given that 88% of Internet search traffic flows through organic search results (Forbes) so the opportunity to attract more visitors and website traffic by ranking organically in the search engines is huge.

The downside is that it does take time (usually several months) to get a site ranked and the results are never guaranteed.  Organic rankings depends on a great number of factors, including back links to the website which can take time to accumulate. Link building is a gradual ongoing process that takes much time and effort.

Business owners who are willing to invest in the search engine optimization and marketing effort will reap significant rewards:

“Instead of spending advertising dollars on newspaper and magazine ads, focusing on acquiring more organic search traffic as a key pillar of advertising strategy should become mainstream in the next 12 months. Thus, I see organic as the next big frontier in online advertising” – Forbes 5/09

So what are some of the top social media sites today that business owners can tap into?

In a recent study, eMarketer, a market research firm, ranked the popularity of social networking sites in the US and came up with the top 20.

Interestingly, as of Mary 2009, Facebook has replaced MySpace as the most popular site among internet users. Facebook’s unique visitors doubled to over 70 million in the 12 months ending May 2009.

Also, while Twitter showed the most dramatic growth over this time period, its visitor level is still less than a third of Facebook and MySpace.

For businesses looking to utilize social media marketing, it may be useful to take a deeper look at the top 3 sites and their visitor demographics.

1. Facebook

Online since March of 1997, Facebook is the 4th most trafficked site on the internet, with users spending an average of 26 minutes a day on the site (based on Alexa statistics).

The site appears to attract a younger more affluent demographic, with a heavy representationof users aged between 18-24.

2. MySpace

Ranked 11th by traffic, MySpace users spend an average of 19.5 minutes daily on the site, which was started in 1996. Much like Facebook, it tends to attract young adults (relative less affluent however than Facebook users).

3. Twitter

Unlike the top 2 sites above, Twitter users spend only 8.5 minutes each day on the site which has a traffic rank of 25.  The site tends to attract a slightly older audience, those between the ages of 25-34 with males being more over represented than females.

This quick analysis shows that knowing the user demographics of these sites is critical in helping business owners determine if this is the right target audience for their products or services.

Since social media marketing requires a significant time commitment, rather than following the herd and targeting the top ‘most popular’ sites, it pays to spend time researching each social networking site’s audience before jumping in.

Tools such as Alexa, Compete or Quantcast provides useful  statistics and site demographics which businesses can use to conduct market and competitve research.