Not sure what you mean by "Do it! Just do it!"
As a marketing person dealing with smaller companies I cannot agree that the internet has left the smaller businesses behind.
With proper SEO one can compete on an equal footing with the major players.
You say: * Traditional print advertising is becoming less effective.
(I say it has never been all that effective without large investments into repetitive advertisements).
- Most people have thrown their Yellow Pages away and search online
- Newspaper’s readership is down and many papers are declaring bankruptcy
(True and comment #1 applies here also). * With TiVo, people are skipping commercials (True, but mainstream commercials are way above the small business' budget.)
- The credit crisis of recent years has made it more difficult to "Move Markets" through traditional gimmicks
(Not certain what this has to do with the topic. The credit crunch has forced some new marketing ideas.)
- Search results are dominated by large companies
(No they are not. Search results are being dominated by relevance.)
- Search results bring information overload. Local businesses get lost
(Not if the local business targets local search.)
While the amount of pages for any given search term is constantly growing, Google is managing information overload by concentrating on relevance in it's listings.
- 97% of people with online access will research products and services online before they purchase
- 35% of all searches are done with an intent to buy
- 55% of all local searches are done with an intent to buy
- Of all local searches, 8 out of 10 call or visit a store and 60% of those result in a purchase of some kind*
All of this reinforces how important it is to get one's site SEO'd properly.
Word of mouth and referral marketing are excellent methods and will return well but one needs an awful lot of happy clients. Think of some companies that have satisfied your needs and tell me how often you go around proclaiming their value.
There is no doubt that sites like Biznic, FaceBook and Twitter like sites are providing opportunities for self promotion. Participating here is going to benefit the small business through exposure and indirectly, SEO.
What some do not see is that online marketing is becoming multi-faceted. While blog, network, forum, and social networking posts get good coverage, it is one of constant change. True you can get good SEO coverage when searching for the long tail but SERPs (Search Engine Result Pages) favor the standard webpage over the blog or thread based results.
If one is going to social network market, one needs a website. If one has a website it should have well defined calls to action.
Best of luck. Reg