Survey Finds Small Business Adopting Social Media Rapidly

A new online survey of more than 2,000 US small business by Internet2Go, an Opus Research advisory service, and MerchantCircle, suggests that a growing segment of small business owners are using social media to promote their businesses. The survey, conducted September 8-18, 2009, found that roughly 45 percent of respondents have a presence or profiles on Facebook and Twitter to promote their businesses.

Although the survey focused on Merchant Circle’s most active publishers, a group predisposed to me more online, it certainly suggests that small business owners are coming to understand the power of social media and the relative low cost vs. high return opportunity. However, the survey further suggests, to me at least, that while it’s easy to get on Facebook and twitter, there’s still a gap in understanding how to make them pay. The danger in jumping into social media networks, with no barrier to entry, without a strong “hub” foundation of a blog or content portal is that it’s difficult to convert someone from the awareness that might be gained through Facebook to the trust needed to make a sale. (See the final point below)

Other survey findings include the following:

  • 79% of respondents report annual marketing budgets of less than $5,000 per year with the 44% spending “less than $1,000” annually on advertising and marketing
  • 80% of respondents have four or fewer employees
  • Asked about their “biggest complaint” regarding online marketing the top two were “too costly” (26%) and “there’s not enough time to do it well and still run a business” (15.9%)
  • 75% said they monitor online reviews of their business. The most common method was by visiting specific review websites (47%) and by searching on their business name (44%)
  • Despite its popularity social media showed the biggest gap between SMB adoption and perceived effectiveness as a marketing platform.
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  • elainefogel

    Interesting, but confusing. Last week Citibank released a study that indicates the opposite. Now what? :(

  • Richard Posey

    I haven't thought about Yellow Page advertising in a long time. It was once one of the best tools for small businesses. You placed an ad once and you were done for the year. It would be interesting to track how that effectiveness has dropped over the last decade.

  • ducttape

    Totally agree Elaine – confusing – what I think is going on here is that there is a large gap between “getting on twitter” and using twitter for business benefit – that's what surveys like this are having a very hard time measuring.

    I still hear folks citing 50% of sm biz have no website and I can't fathom that, but then I hear from lots of people who says it's true in their town, so . . .

  • eyebjaminnn

    I'm always skeptical when statistics are published without reference to sample size and margin of error.

  • Devin Chasanoff

    I would be interested in what types of small businesses are using social for advertising, as well as what types of business are using it more effectively.

    Then I would love to look into why those types of businesses are using social media, and more importantly, why others are not.

    Was there any information about the types of businesses were involved in this survey?

  • Online business entrepreneur

    I think social sites are over hyped for getting organic traffic. A recent study by Neilson showed that only 4% of people use social site like facebook and twitter use them to search for sites. They hang out and chat — who really wants to mix research with chatting?

    I do think it can help with a referral for say a house painter in your area.

  • johnmjoyce

    Hi John,

    It was a pleasure seeing you at IMS09 here in Boston.

    Without a comprehensive online marketing strategy in place, where a business presents a consistent message across all tools and platforms, the results will be dismal. Success with social media requires two things 1) A clear plan and 2) The time/dedication to consistently execute the plan.

  • mattstone1916

    Given the current economy, we are starting to see many new businesses open up shop. The ones that use social media to drive new traffic and revenue to their locations or businesses have a good shot at survival.

    Social media is a good strategy for identifying healthy business relationships and for driving traffic to one's web site. Social media really isn't cut out for closing the business deal, but it can be harnessed for capturing web traffic.

    And social media really isn't that expensive. With so many new businesses opening up, use of social media should only trend up.

  • Jeny

    These companies are taking advantage the low cost social media advertising offers. Facebook, Twitters, Myspace and so many others have millions of visitor everyday and joining these sites can really give a little exposure to them. Though I am not really sure if using these sites is effective that it brings in more sales, but I think the risk is low because you are not paying high cost advertising.

  • Michelle Salater

    We've been watching social media for over a year, and we've found that people are tired of being sold to and pitched to. They go online to find solutions to their problems. The businesses that create relationships with them and provide those solutions are the ones who will get more clients and be profitable. Social media is a great way to do that.

  • business services

    really social media making benefits to smaller business
    that is because they adopt it

  • pookiemd

    I think the purpose of marketing via social networking is to drive traffic to your website and blog, and then have an “offer” or call to action. I think it takes a long time to build up a following, and people neglect to take that in to account. (A mistake I made myself.)

  • ducttape

    I don't know that I would go as far as saying that's THE purpose, it's one great one for many organizations but using twitter for customer service, for example, is another great purpose – all depends, but you are certainly right about having something for them back at the ranch.

  • ducttape

    It is indeed, but don't neglect the foundation – you can engage in social media, but at some point you need a body of work that builds trust that leads to the sale.

  • ducttape

    Certainly one of the appeals is the low or no barrier to entry – but the real work to make it pay still has to come from doing something consistenly.

  • ducttape

    Great meeting you as well – amen to comprehensive -twitter is not a marketing plan!

  • ducttape

    Tough to gauge any of this with stats because it's all still new and who knows what businesses are really doing on Facebook – the real story I think is that these platforms are changing the way we communicate and that's what we need to stay tuned in to.

  • Michelle Salater

    That's very true…if you don't have anything to offer and can't build relationships or trust, you won't have customers no matter how much you tweet or FB. (That's true offline too.) Social media is just one way to market yourself out of many.

  • ducttape

    Absolutely, just one way, but it's starting to infiltrate all ways

  • emilylong

    Real conversion form social media is certainly a huge challenge and I disagree that adopting a social media strategy is completely “low-risk” as some other comments are asserting. Sure, you aren't paying out an actual dollar amount as you would for traditional advertising, but the opportunity and labor cost could be substantial – and that's a risk. If a small business has only a handful of employees, the amount of time taken up by even one of them to engage in social media interaction could represent a great loss of productivity in other areas. Also, if you fail to plan properly with targeted messaging and focus, you could be producing content that does not accurately reflect your business… and once it's out there, there is no way to take it back. Companies who truly profit from their social media efforts put significant thought and effort into their execution; the time it takes to do so could come at a notable opportunity cost.

  • andybirol

    Social media inroads with small business along the lines of the Internet in the late 90's and for those who can remember, personalized business forms in the 1960's Remember when most news about the Internet used to be about why small business should use the Internet. Today we take the Internet for granted. As social media continues to come of age, the stories about why small business should use social media will also subside. Small business desperately needs social media, just as it needed websites and stationery so it can be seen, legitimized, sought after and in demand.

  • Michelle Salater

    Ha, very true. The sad thing is that many people will think that a few tweets or Facebook posts every day are all they need to do to market.

  • CEO Game

    The results of the survey are not surprising since social media marketing offers the today's cheapest and most effective way to reach the masses.

  • Jeremy Campbell

    Social media promotion is the fastest, easiest, and lowest cost way to promote your business. It's a lot of work but it's very worthwhile especially if your budget is low and you have some time to work with.

    Just remember to listen, respond, and engage. Social media marketing isn't all about outgoing tweet and link campaigns, you need to directly interact with your consumers and customers as well.

  • Oscar Del Santo

    Small businesses are truly missing out if they ignore the enormous possibilities on offer to them through the social media and the social web.

  • Lou

    The problem for many companies is time and knowledge. Social media takes time to figure out for most people. Setting up a Facebook business page or customizing a decent Twitter page takes time. Then someone has to dedicate time to posting useful information on these pages to see results. Most small businesses don't have staff to dedicate to such endeavors. Moreover, what's the next big thing? Sure Twitter is big now, but what about a year from now. Staying on top of the latest and greatest way to communicate limited information is a challenge for most small businesses.

  • sazbean

    From a web strategy viewpoint, I thought the following two points, concerning the “biggest complaints” were very interesting: “too costly” (26%) and “there’s not enough time to do it well and still run a business” (15.9%). The costly part is interesting because internet advertising is usually more cost effective than other types of advertising. Of course, this may just be due to the general penny-pinching that many SMBs do. The time factor is interesting too because I hear that all the time. I think that we, as consultants, may have some more work to do in terms of educating SMBs on the advantages of advertising and marketing online. It sounds like we also need to provide them with some tools and information on how to make things easier for them to use. Thanks for the post!

  • ducttape

    It's funny how people seem to find time to do all kinds of things once they realize one of two things a) I get a ton of benefit when I do it or b) I'll go out of business if I don't.

  • richardbuettner

    Nice post – thanks!
    However there are a lot of different research about SMBs and social media going on at the moment. This one (…) says the adoption is rather low and three-quarters say they have not found social media helpful for generating business leads or expanding business in the past year.
    Taking into consideration that social media is still very young (e.g. 75% of all Twitter users joined 2009) and not even the big corporations have fully embraced it, considerable adoption for SMBs will take at least one more year.

  • Dr. Len Schwartz

    I enjoyed reading this article. I think part of the reason why small businesses use sites such as Twitter and Facebook, despite being low cost, is to find other professionals to share information with and become an expert in the field. Some of the blogs displayed on Twitter offer useful information and allows for professional advice or opinions if warranted.

  • Dr. Len Schwartz

    I enjoyed reading this article. I think part of the reason why small businesses use sites such as Twitter and Facebook, despite being low cost, is to find other professionals to share information with and become an expert in the field. Some of the blogs displayed on Twitter offer useful information and allows for professional advice or opinions if warranted.