Nearly half of small businesses would use a blog to drive traffic to their website and increase sales according to new research from Paper Hat. However, only three per cent of the 2,000 small and medium enterprises (SMEs) questioned are actually intending to start a blog.

Findings from Paper Hat research paper 'Blogging For Business' suggests that SMEs understand the potential business benefits that running a blog on their website could bring, but are failing to put this awareness into action and create one.

There are currently 53.9 million blogs in existence, with 75,000 new ones created daily (Source: Technorati). Blogs provide an excellent opportunity for interactivity and building relationships with potential customers. They encourage the website owner to regularly update the content on their site and are one of the most effective means of ensuring that people regularly visit your website.

Paper Hat's research found that 26 per cent of respondents needed a blog to be updated daily to ensure they returned. However, just over one third of participants indicated that as long as the blog was informative and interesting, it didn't matter to them how regularly it was updated.

"In today's hyper-competitive market, blogs provide a fantastic way for small businesses to differentiate themselves through personalising their website and attracting more customers. The corporate blogs of large companies are bound by corporate guidelines and gate keepers, so for small businesses there is far greater opportunity for interesting comment and genuine dialogue with customers."

2295 businesses participated in the online survey carried out between June and August 2006 by Paper Hat. Three per cent of respondents stated that they intended to start a blog, which accounted for 69 votes. To take part in the latest research on SMEs' server use.