Small and midsize businesses (SMBs) - but not large ones - rate Google’s keyword search offering as superior to Yahoo’s, according to the second annual Outsell, Inc. study looking at companies’ ad budgets and strategies, broken out by business size:

• Some 58% of small companies rate Google ads effective, compared with only 32% that rate Yahoo effective.
• Three-quarters of midsize businesses rated Google search ads effective; slightly less than half rated Yahoo effective.
• Among large companies, 63% rate Google effective and a nearly identical 62% rate Yahoo keyword search effective.

Among additional Outsell research findings:

• Small companies devote almost twice as much of their budgets to print as midsize companies.
• Midsize businesses rate the effectiveness of print trade magazines and events much higher than smaller companies do.
• Small companies’ share of online ad spending on search engines is more than double the share of medium or large companies’.
• Click fraud continues to deter some companies from pay-per-click advertising:
  • Large companies estimate that nearly one-fifth of clicks on their ads are fraudulent
  • Small companies estimate that 14.4% of clicks on their ads are fraudulent.

Additional findings from the Outsell report, via MediaPost:

• The most effective online marketing tool, according to US advertisers, is their company website, to which they’ll devote, on average, nearly 12% of their total 2007 advertising budget.
• Email marketing and search engine marketing were ranked second and third, respectively.
• However, nearly half (49%) of companies referred to click fraud as “a serious issue” and said they “planned to reduce, or had already reduced,” PPC ad spend.
• Nevertheless, search marketing budgets are expected to increase by 40% in 2007.
• Midsize companies foresee the highest level of online ad spending growth - 63%, versus 14% forecast by small companies and 19% by large businesses.

About the study: Outsell surveyed 1,010 advertisers who target the corporate, healthcare and consumer markets on a range of topics, from budgeting for print, broadcast and online media, to the effect of click fraud on spending decisions. These advertisers control $6.5 billion in spending.