Desperate measures as Australian SMEs abandon their websites

When I read it I couldn’t believe my eyes. So I read it again, but the outcome didn’t alter.

According to the latest MYOB Business Monitor, Australian SMEs operating a website numbered a paltry 38% – 2% higher than the same time the year before, but a whopping 9% lower than the peak of 47% in October 2010.

Or put another way, roughly 20% of SMEs who had a website a few years back, have abandoned them.

All when all the other website usage metrics – online sales, sales influenced by websites, Google searches, time spent online and so on are all going the other way – very much upward.

Throwing the baby out with the bathwater?

So given the well-documented use of the web as an increasingly important adjunct to the purchasing process for both consumer and business markets, and that the costs of both establishing and maintaining professional websites were reducing rather than increasing, what could our smaller businesses possibly be thinking?

It just doesn’t make a lot of sense.

But once I picked my jaw off the floor, I tried to come up with some answers.

And once I did, two key factors – economic conditions and the growth of social networking raised their ugly heads.

Economic conditions kick in

The decrease in website ownership started down from its peak in October 2010. Whilst this was some time after the start of the GFC, it coincides with the delayed impact of it on Australian business and coincides with the winding back of government stimulus measures.

In other words, smaller businesses were doing everything they could to reduce expenses and despite the growing importance of websites as not only a promotional, but an operations platform, even they weren’t safe from the cost cutter’s razor.

At the same time, social networking was starting to gain prominence as a low cost promotional medium. Many proponents were waxing lyrical about this amazing new medium, though few could point to real Return On Investment from businesses embracing it or even how they could go about it without a team of eager social networking beavers.

Social networking’s to blame

Not that it was overly embraced by the smaller business sector either.

Even today, despite the hyperbole, only 20% of smaller business use social media for business purposes, according to the same MYOB report.

But one can’t help but wonder if it was the perception of social media as a more cost-effective business tool, rather than the reality, that had smaller business operators pulling the pin on their websites.

Given said hyperbole around social media, that really wouldn’t come as much of a surprise to a sector looking for any kind of financial relief – even if it is merely perceived.

Websites more critical than ever

This blog has certainly been bullish about the benefits of social networking for many smaller businesses, but certainly not at the expense of the website which, despite the influx of brash new challengers, remains the cornerstone of a professional online presence.

The good news is that website adoption is slowly increasing again, not just due to better economic conditions, but to what is likely to be a painful realisation by those who abandoned them that, these days, their business is now much worse off without a website than the relatively paltry cost of operating one.

Craig Reardon is a writer, educator and operator of independent web services firm for SMEs, The E Team.