A new study of small business owners reveals they are finding all this Internet marketing lark rather daunting. Most claim they shun Internet marketing because of costs and complexities. Many small business owners claimed they were confused about Internet marketing and the whole Web 2.0 phenomenon.

However, while small business owners worry and ponder on their online advertising conundrum, the evidence is piling up that such marketing does not work. Indeed, in a recent post I wrote about the power of “word of mouth“. And there are plenty of marketing gurus who will tell you that personal recommendations are better than any advert.

So, small businesses are scratching their heads over Internet marketing when they should be focusing on gaining word of mouth benefits the Internet can bring, such as through blogging and social networking. This is a point made by the survey’s authors who suggest that small business owners should focus their efforts more on understanding Web 2.0, rather than pondering their advertising options.

But, as Social Networking Consultant Phil Calvert pointed out in his recent blog on social networking, this is not without difficulty. You need patience and experimentation, he says. As the authors of the study on Internet marketing point out, education is a key factor.

So what should you do? Here’s a plan that might just work – and save small businesses money. Firstly, scrap all notions of online advertising, set aside your pay per click campaigns and ignore all the advice you’ve ever read about becoming a millionaire overnight with a passive income web site. Good, that’s got that out of the way, you don’t have to worry about that any more – and you’ve just saved a ton of cash.

Now, with the time you’ve just freed-up from all that Internet marketing work, you have the space in which to work on social networking. If you are not already a member join Ecademy – a great place to start for small businesses. Yes, I know there are bigger social networking sites, but Ecademy has a small business focus.

Join as a full member – don’t be a “guest” as you won’t get the full value. It’s £10 a month and if you don’t like it you can cancel. However, for a month’s education it’s a cheap price to pay. Once you are “in”, start exploring, reading and, importantly, contributing – especially in the various clubs. This will allow you to “get the hang” of social networking at the very least.

Once you have understood it look up other social networking sites in this directory of social networking. Find other suitable sites and do the same – join, take part and work out the benefits to your business.

But what should you do if you are already social networking and it’s not producing results for your business? Well, the answer is the same – forget Internet marketing for a while and do more social networking. Concentrate on one of your networks for a month and get to know it well. However, the main reason why social networking doesn’t work for business is they don’t take part. I asked at a recent meeting if any members of the audience had benefited from social networking sites. One chap put up his hand and told me that social networking was a waste of time. “I joined Facebook a month ago,” he said, “and I’ve not done a single piece of business through it yet.” I probed a bit to find out more, only to discover he had not actually contributed anything.

Joining a social network and hiding away in the corner just isn’t going to work. You need to engage – remember the two words you need to be “social” and you need to “network”, otherwise it will not work for you. So, get stuck in, join in and take part. That will have greater business benefits than any old Internet marketing campaign.