Small and medium-sized enterprises make up the majority of New Zealand's businesses but half of them still do not have a website, according to a new survey.
An online questionnaire sent to 1008 businesses at the start of this year showed many were failing to harness the power of digital marketing.
Yellow's SME Digital Readiness Survey found 50 per cent of Kiwi SMEs did not have a website and nearly 20 per cent were not using any online tools at all.
The survey, conducted by Colmar Brunton, measured how SMEs use digital marketing tools such as social media, websites and mobile applications.
Yellow's marketing director Evan Lawrey said the low uptake of websites and use of online marketing was a major concern, especially when compared to the latest research into consumer behaviour.
"Each month 57 per cent of Kiwis use the web to search for businesses, products and services and of those 17 per cent use the internet exclusively.
"If half of all small to medium businesses aren't online, they're missing a huge opportunity."
According to Statistics New Zealand, SMEs of up to 20 employees account for 97.2 per cent (455,907) of all enterprises in the country.
They employ 30.2 per cent (581,540) percent of all employees and generate about 27.8 per cent of New Zealand's Gross Domestic Product.
A similar survey carried out by MYOB late last year showed just 35 per cent of SME owners had their own website and only 18 per cent considered themselves to be early adopters of new technology.
Lawrey said many regional businesses appeared to be leading the way versus their big city counterparts.
"Surprisingly, we've found it can be SMEs in the main cities that lag behind," he said.
"For example just 40 per cent of Auckland businesses are using social media tools such as Facebook, versus 65 per cent in Southland."
A national average of 81 per cent of businesses were using at least one online tool. Otago and Tasman beat that with 92 per cent and 93 per cent respectively, while Northland fared the worst with just 71 per cent.
Entrepreneur Tenby Powell said business owners were well aware they needed a digital presence but were often "time poor" and not sure where to start.
"But, to succeed in the current climate, it is vital business owners keep abreast of digital channels," he said.
Powell will be speaking at various free events being hosted by Yellow in May and June, aimed at helping SMEs become more efficient.
The survey also showed that of those businesses with a website, 28 per cent planned to invest in mobile channels, either ensuring their site was mobile optimised, building an app, or using text messages to communicate with customers.
Of those same businesses, 38 per cent planned to start using search engine marketing, 32 per cent planned to start using search engine optimisation, and 31 per cent intended to invest in video.
"These businesses are realising that it's important to keep adding layers to their web offering, be it mobile or search marketing," Lawrey said.