Possibly due to spending caution caused by the economy, small businesses seem to have reduced spending on Internet-based tools and media over the last year or so, a study sponsored by Network Solutions (News - Alert) has found.

But adoption of social media by small businesses is steady at 24 percent, which is still a significant increase compared to a year ago. 

Small businesses have slowed usage of online advertising, which dropped significantly from 25 percent a year ago to 20 percent in June 2010. Usage of search engine optimization also has declined in the past year, from 26 percent to 20 percent.

Websites continue to have the broadest reach of online technologies, with 67 percent of small businesses having or likely to have a site in two years. Websites are also the fastest growing online solution, significantly higher this year than last (17 percent plan to get a website in June 2010 vs. only 10 percent a year ago), the study found. 

Of the 20 percent who use social media in some way for their business, the majority use Facebook (News - Alert) (82 percent), and a lesser number use LinkedIn (38 percent) and Twitter (30 percent). Small businesses tend to have company pages on sites like Facebook and LinkedIn (73 percent of those who use social media) and post status updates most (65 percent).

Small businesses’ expectations of what social media can do for their business has changed in the past six months, as now more small businesses expect social media to build awareness of their organization (77 percent) rather than attract leads (71 percent), a reverse of six months ago. 

They are also more likely to expect social media to keep them in touch with current customers (62 percent), and it is more likely to achieve this for them now than six months ago (65 percent in June 2010 vs. 46 percent in December 2009).

Websites remain core to an online presence. In fact, 30 percent of those using social media plan to increase their investment in their website because of social media, and another 60 percent do not plan to change their planned website investment in the next 12 months.

After taking into account current ownership plus intentions over the next two years, it is likely that by the middle of 2012, two-thirds of small businesses (67 percent) will have a website and nearly half (48 percent) will advertise in online industry or public directories.

The social media trend is affecting small business as they look for new ways to communicate with customers and reach out to potential new markets. A full 20 percent say they actively use social media for their business, which is similar to the incidence six months ago (18 percent). Of those who use social media, the most common sites used are:

• Facebook (82 percent)

• LinkedIn (38 percent)

• Twitter (30 percent).

The most popular way to take advantage of social media is to have a company page and post status updates, which are done by about three-quarters of those using social media for their business. About half of those who use social media monitor comments made about their business on social media sites. Other less frequent activities include building networks on LinkedIn, blogging, tweeting, and using Twitter as a customer service channel.

TMC (News - Alert) is offering a unique opportunity to learn about implementing the social channel in concert with the others at a new event, the Social Customer Summit that is taking place at ITEXPO West Oct. 4 to Oct. 6, 2010 at the Los Angeles Convention Center. The Summit will be a great opportunity to find out more about and to discuss issues such as managing the media and what skills, training and tools are needed and have proven to enable successful use of this channel.