SMB’s, Social Media and Reality

I have followed the SMB market for a little while now. I am considered an SMB myself and I certainly was when I had a small Internet marketing agency / practice as recently as a year ago. As a result, I know the small and medium business market pretty well. I find the typical small business owner / marketer equal parts fascinating and frustrating and a puzzle that seems to want to be solved but never likes to give you all of the pieces to solve it. That is why I see surveys that claim 45% of SMB’s are using social media with a slightly skeptical eye.

A recent survey by Internet2G Into and Merchant Circle revealed some interesting insights via a survey. Internet marketing consultants want to address this segment because it is the vast majority of businesses in the US. While many claim to have answers the actual analysis of the SMB when “in the wild” vs. captivity (i.e. a survey like this one) are often quite different and very dependent upon the conditions specific to that SMB. Before we get into the results, though, let’s tell you how the data was gathered. The press release for this survey describes the methodology.

The survey was fielded online (September 8 – 18, 2009) and sent to MerchantCircle’s active member base. An incentive was offered to complete the survey (additional services from MerchantCircle worth approximately $50). There were 2,591 total survey responses, with 2,403 qualifying as “small business” defined as having fewer than 100 employees. Active MerchantCircle members are those that have done one or more of the following: created an enhanced profile, uploaded pictures, created a blog, coupons and newsletters and/or connected with other merchants through the MerchantCircle website.

As a result of seeing the above criteria the findings now make more sense. Here are some of the highlights.

• 45 percent of those surveyed use social media (including Facebook and Twitter) to promote their business
• 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.

So while it makes for great headlines to say that 45% of SMB’s use social media it can be a bit misleading. The folks conducting this research tell us that this group represents a more engaged segment of the SMB market. If that is so (and based on the survey methodology) this number of 45% is actually a bit disappointing. If an SMB has gone through the trouble of completely engaging with Merchant Circle but only 45% of those who are that far along the curve have said they use social media (like Facebook and Twitter) to promote their business then what about the millions of other SMB’s who still think the Yellow Book is the most effective spend of their precious marketing dollars? I would say that the last point in the above list is the most telling of them all.

My experience with SMB’s that are not engaged (which I will very unscientifically peg at the very large majority of the total SMB marketplace) is that they are light years away from getting involved with social media for real. The folks at MerchantCircle state the following

“We believe the behavior exhibited by these small business owners is a pre-cursor of things to come – that small business owners will increasingly forgo expensive advertising options and embrace publishing their unique content across various social media outlets,” said Darren Waddell vice president and MerchantCircle. “While MerchantCircle typically focuses on helping businesses get online for the first time, we are excited to be an important part of the social media strategies employed by this new segment of merchants.”

So obviously, I am a skeptic of the number of SMB’s that are engaged in social media overall. I believe that part of my job as a blogger at Marketing Pilgrim is to make sure that research is seen in real terms and not just in statistical terms. We are often far too ready to look at any survey and deem it as a trend without looking critically at the numbers and what they may really be telling us.

So until this number changes, I am going to remain leery of anything saying that the adoption rate of SMB’s in the social media space is picking up. Heck, they don’t even seem to get that social media isn’t really free at all unless of course they don’t value their own time which is the biggest investment it requires for success. There’s a long way to go with this one for sure.