BabyAge was shocked
by its search marketing results

Small and even medium-sized companies are slimming down their budgets dedicated to search engine marketing, as big brands get in on the bidding game, reports BusinessWeek.

Even when the small brands get the clickthroughs, they're finding that people shop around more online, so clickthroughs are often wasted on price comparisons. BabyAge, which bought $1.2 million worth of search ads and got more clicks in 2006, actually netted fewer buyers - effectively doubling its costs.

Meanwhile, brand giants like Best Buy and Zale are diverting more and more of their marketing to search ads, driving up prices and stealing customers from smaller businesses that have in the past bought the bulk of the ads.

Google, though, likely isn't worried. The rush of ad dollars from big brands into search is more than making up for any cutbacks by smaller outfits. Small and midsize marketers are now trying out ads on MySpace and YouTube, or advertising on blogs and niche shopping sites.