John makes a burrito with his goose sauce

Back in the mid 90s, I frequented The Weinery, a total dive of a hot dog place in the Cedar/Riverside area of Minneapolis. Jerry, the then owner, collected email addresses and would occasionally send out specials. Say the password when you placed your order and you got a discount.

The other day, I received an email from John at Pedro & Vinny’s. John ran a burrito cart in downtown DC. (I wrote about John’s honor system earlier.) He moved away a while back. Friday’s email announced that his burritos will be hitting the DC streets soon.

But John and Jerry are rare among small business owners. In the last 13 years, Internet use has exploded and tools have gotten easier and easier. Yet few local businesses do a good job of communicating with their existing customers and reaching out to new customers.

To be fair, they haven’t been in the habit of advertising. Before the Internet, the key local outlets were newspapers, television, radio and the yellow pages. You essentially had to buy the entire DMA for thousands of dollars. Direct mail (Valpak etc.) and Entertainment coupon books were among the few options that made economic sense.

The Internet has drastically changed the economics. Publishers can slice and dice virtually infinite inventory into smaller and smaller buckets and make advertising affordable for small businesses.

So why aren’t small businesses advertising online?

• No one is asking them.  Publishers (by and large) haven’t changed their compensation systems for sales reps. If I were a sales rep, I’d much rather work on selling the full page ad for $10,000 than an online presence for $100.
• It’s too complicated. Search advertising seems like a prime opportunity for local businesses because it can be highly targeted. But the interfaces and the structures are well beyond the skills or interests of small business owners. They’re too busy running their businesses to run keyword campaigns.
• They’ve been burned. Most restaurant sites look like they were built solely to show off the Flash skills of the design firm. The restaurateur spent hundreds or thousands of dollars for a site that doesn’t drive any foot traffic because it’s unusable and doesn’t show up in search results (because everything is Flash or an image).
• It’s hard to see the return. Online advertising is a slam dunk for businesses that can complete the transaction online. They can see what they’re getting for their money. It’s harder to show that value to businesses that rely on foot traffic.
• No need #1. In a town of 500 people, there’s no need to advertise. Everyone knows who you are.
• No need #2. If you’re the hot new restaurant in town and there’s always a wait to get a table, why spend money on ads?