Small and medium-sized enterprises (SMEs) are missing out on the opportunity to bring in more business by not investing enough in making sure customers can find their websites, it has been suggested.

Research from Microsoft's adCenter shows that although SMEs are pumping funds into improving their websites, they are not working on getting their site higher up search engine rankings.

Around £3 billion is spent each year on websites which are not performing well on listings produced by web searches using Yahoo! and Google, according to the study.

In addition, some 62 per cent of small businesses that own a website have not put any money towards promoting it through search engine marketing despite its potential for boosting site visitors and eventually customers.

"UK SMEs are missing a trick by not investing in search marketing campaigns," said Nigel Leggatt, marketing manager at Microsoft adCenter.

"In today's world, just having a website is not enough. You have to drive traffic to your site to ensure you are front-of-mind with your potential customers. Search marketing is one of the most cost effective ways to achieve this."

Despite the low adoption of search engine marketing, Microsoft's research found that small business owners understand the opportunities offered by search engines as some 96 per cent of those questioned admitted to regularly using them to find products online.