Australia's small-to-medium enterprises (SMEs) are experiencing a gradual nosedive in online activity, according to the latest research report from business management solutions provider MYOB.
MYOB discovered a significant decline in online transactions, email marketing and social media in its survey of 1004 SME operators for its July 2012 Business Monitor report.
According to the survey, less than one quarter of SMEs used search engines to promote their business in July, down from around one third in March 2012.
Networking on LinkedIn and social media activity also dwindled, with just 15 per cent of companies using Facebook, YouTube and Google+ to connect with customers. Skype and VOIP use was also down; from 20 percent in March to 16 percent.
MYOB CEO Tim Reed said the decline in online business activities was "completely unexpected".
"Many of these tools, such as a basic LinkedIn page, are free and can be used to raise the profile of a business and to communicate with customers," Reed said in a statement.
Paying bills on suppliers’ websites, buying products/services online, conducting email-based marketing and accepting online payments from customers also experienced significant drops.
Reed said that a decline in revenue across the industry and the lack of confidence in a short term economic recovery may have contributed to the drop in online activities.
"I suspect this has seen many shy away from online activities as they focus on the health of their business," Reed said.
Despite the decline in online business activity, the survey found that SMEs with their own websites had slightly increased since the previous survey; up from 2 percent to 38 percent of respondents. However, the number of NSW-based SMEs with websites fell by 2 percent.
Reed said, “With Australia’s internet audience reaching 16.2 million in May 2012 it surprises me that so many business operators have not yet realised the value of having a simple website containing their contact details.
"Websites are a great way to attract new customers and to keep existing customers loyal, which can only have a positive effect on cashflow.”
Dr Caroline Hong, CEO of the SME Association of Australia (SMEAA), said the results of the survey were "a bit surprising".
She said the drop was minimal compared to the over 2.7 million SMEs in Australia, but said for the survey size the results were considerable.
According to the SMEAA, around 40 percent of Australian SMEs do not currently have a website.
She attributed the threat of losing security on existing social media, such as the recent LinkedIn data breach, as a possible contributor to the drop in SME online activity. She said that if true, the survey results were "a worry".
"The key message to SMEs is: please get on to cloud and get a website and rethink social media. The whole world is going through the digital revolution now," she said. "We cannot be complacent. Small developing and less developed countries than Australia are now in the same playing field."
Hong said the SMEAA was preparing to conduct its own annual SME survey.
You can read the full MYOB report here.