Influences of Search Engine Optimization on Performance of SMEs: A Qualitative Perceptive

Influences of Search Engine Optimization on Performance of SMEs: A Qualitative Perceptive

Stella Tomasi (Towson University, USA) and Xiaolin Li (Towson University, USA)
DOI: 10.4018/978-1-5225-5187-4.ch069
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Abstract

Search engines have become an important channel for increasing SMEs' global reach as well as competing with larger companies. Therefore, SMEs are enhancing their business visibility through search engine optimization (SEO). With effective SEO techniques, small companies can appear ahead of large, well-known companies on search results. However, in addition increasing the ranking on a search engine results page (SERP), there may be other benefits that SMEs may enjoy while engaging in an SEO campaign. This study uses multiple firms as cases to illustrate how SEO initiatives can impact performance for SMEs. The authors found that in addition to increasing the rankings on SERPs, SMEs saw an increase in number of visitors to the site, the average time duration of users visiting the site, more user engagement and an increase of annual sales revenue.
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1. Introduction

A small and medium-sized enterprise (SME), which refers to a business with fewer than 500 employees, independently owned and operated, and not dominant in its field of operation, plays a significant role in the growth and change of economies (Trumbach et al., 2006; Ramdani et al., 2009; Obafemi, 2009) in international markets. Although many believe that firm size is a key dimension in labeling SMEs, Pett and Wolff (2012) state that this is not an ideal measure and is viewed as benign by SME managers and owners. Nevertheless, we follow Wolff and Pett (2000) by defining SME by identifying three categories of firm size: micro-firms (under 25 employees), small-sized firms (26-100 employees) and medium sized firms (101-500 employees). Factors that distinguish SMEs from larger firms is the available resources within the firm, the level of innovativeness and ability to take risks (Westerberg and Wincent, 2008). Furthermore, SMEs contribute to job creation (Clark III and Moutray 2004) and can be the basis to become future large companies (Monk 2000). Therefore, studying SMEs can enhance our understanding of their growth and development (Abouzeedan, 2011) and due to their significance to local economies, it is also necessary to study and evaluate their performance (Acs 1999). Saeed et al. (2005) found insights into the drivers of performance for e-commerce organizations. Since organizations find it difficult to build and sustain a competitive advantage on the Internet, they were able to identify that companies with high ecommerce competence had higher levels of firm performance, which was mediated by Web site functionality. This is an important finding, since performance is related to partially to how well the customer is able to find information on the Website.

As Internet technologies have been changing the way business is conducted, SMEs are investing in such technologies and taking advantage of e-commerce to access global markets and to compete with larger companies in their industries. e-Commerce sales grew from 72 billion US dollars in 2002 to 228 billion US dollars in 2010 (www.statista.com). For SMEs, creating a website that allows online transactions is the easy part. The more daunting task lies in making the website visible to potential customers when they search for product information. Search engines have become an important channel for increasing SMEs’ global reach as well as competing with larger companies.

Search engines are likely to have a significant impact on business performances. They are not only convenient information tools but also powerful agents of a transformation that makes the business environment more transparent and more competitive (Rangaswamy et al., 2009). The display of search results into meaningful groups and sequence of items are important characteristics on how information is viewed (Kleinmuntz & Schkade, 1993). Furthermore, the sequence of results significantly influences the way users process the information on the page (Hogarth & Einhorn, 1992).

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