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SMB’s, Social Media and Reality




i2G LogoI 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.

  • http://www.goodies4free.net Neil Devlin

    I know I use social media to try to promote my websites and other ventures but I must say it isn’t free. I put in hours of work and although this time is dedicated to improving my output and income it is still time that is worth a lot more to me than the ‘nothing’ quoted.

    If people are willing to carry out the work for me for nothing then I ask them to contact me because I sure know I could spend the time I lose doing something far more enjoyable.

    • http://www.catchfirecoaching.com/index.html Dr. George

      There is companies out there that will handle your social media marketing for you. They are not free of course, but they will save you time.

      I have had much success suing social media for marketing. It does take time however to see results.

  • http://www.famefoundry.com FFcommunicator

    Maybe this article, “The No Duhs of Social Media” will help. http://www.famefoundry.com/646/the-no-duhs-of-social-media

    @FFcommunicator
    .-= FFcommunicator´s last blog ..Breaking Boundaries =-.

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  • http://www.blindedbymarketing.com Krim Stephenson

    Great post on a subject close to my heart. I’ve seen so many stats on small business social media adoption that gave me pause, it makes more sense now that I see the numbers broken down and how they really define “social media”. I also run a small business, and have for years also consulted with technology enterprises that are launching small business-focused products and services. None of my direct experience or past detailed research into the segment jibes with these “most SMBs are diving into social media” claims.

    Thank you for breaking the numbers down – it’s clear that while many/most SMBs do *something* that could be considered somehow social media related, a much smaller number have built it into a rewarding, sustained part of their business. My very non-scientific thoughts on four reasons why most SMBs fail or don’t even really get started with SM:

    1. They find technology hard to understand. This is getting better as SM goes so mainstream… but the vast majority of SMBs are not at all tech-forward, but in fact strongly tech-averse.

    2. They have little or no existing marketing behaviors. I saw a poll a few years ago that something like 60% of SMBs had no defined marketing practices whatsoever. It’s much easier to “get” that SM can help you reach customers if you’re already thinking about and trying to reach customers in a conscious way.

    3. They don’t have the time or, often, the skills for social media. Social media means creating content – which means steady, diligent focus on your blog, Facebook, Twitter. That takes rigorous application of time and also requires the ability to communicate and tell your story in an interesting, distinctive way, that fits your customers and the SM platform that you’ve chosen. Both resources are not broadly available in the small biz population.

    4. They are in a business type or have a customer base that is not ideally suited for social media. I know that many think that *every* business can be made better with social media; I don’t disagree. But some products and services can more easily be translated into the type of customer passion that leads to ongoing relationships. Would I follow the blog of my quirky, knowledgeable local wine merchant, or the pet store where I get my dog stuff? I might well. Would I follow the Twitter feed of the guys that change the oil on my car? Or my drycleaners? Probably not. If they created really great content, then obviously, but my baseline level of interest in that product type is just lower.

    Wonder what you or other commenters think? Do these reasons feel right to you?

    Krim

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  • http://www.mbagrrl.com allison

    I am actually more concerned with 79% SMBs spending less than $5,000 a year in marketing, which is probably the one thing typical about these respondents and all SMBs. This indicates they don’t believe in spending on marketing or marketing is worth the money.

    • http://www.frankthinking.com Frank Reed

      @allison – Great point. Just think how much of that is sunk into Yellow Page ads that are not tracked at all. I think there can be some great opportunities for SMB’s that are willing to step out but most do not have the spine, the time or the people to make it happen. Good time to be a progressive SMB but how many are there?
      .-= Frank Reed´s last blog ..Social Media Bait is Here =-.