Small Businesses Embrace Social Media

MacPhersonWhat began with businesses carving out communities in large social networks like Facebook, MySpace and LinkedIn has evolved into a growing number of tailored online communities catering to even the smallest sectors.

Indeed, Forrester Research predicts that adoption of social networking technology by small businesses will grow by 20% to 33% this year alone.

"The concept of networking sites provides an opportunity for individuals to communicate quickly and efficiently via a convenient online platform," explained Duncan MacPherson, co-founder of My8020.com, a networking site for business professionals to communicate and collaborate with like-minded individuals, associates, clients and staff. "As the concept matured, business professionals realized that such a forum could be used beyond keeping in touch if applied to business as an indispensable tool that can actually help to produce measurable results."

Rick Singer is CEO of RaiseCapital.com, a free online community, where entrepreneurs with startup or existing businesses can display their ideas and capital needs to a vast array of investors. "The trend is part and parcel of what the Internet can provide--namely, an alternate, more broad-based interface with like-minded individuals," Singer said. "When you couple that with the failure of traditional support systems for small business, the burgeoning of our community is not surprising."

Research released last month by Deloitte found that 47% of members within business-sponsored online communities are using them for business-to-business purposes.

According to Deloitte's "2008 Tribalization of Business," enterprises have begun to more effectively use social media tools and online communities to engage with customers and employees for brand discussions, idea generation and product discovery.

Ideally, online communities recruit talent, create content, partnerships, and open innovation--all while policing themselves with a minimum of external oversight, according to Deloitte.

For the study, Deloitte employed an online methodology among more than 100 companies that have created and maintain online communities, which ranged from fewer than 100 members to more than 10,000 members.

Signaling growth for the future, Nearly 60% of business-sponsored communities will have their budgets increased in the next year, Deloitte found.

"Anyone striving to narrowcast to a high-caliber group of decision makers in the business community can effectively reach their target audiences by way of this very captive space," said MacPherson. "Brands are able to garner more bang for their bucks through online ads and marketing, especially as print media continues on the decline."

Added RaiseCapital's Singer: "These communities provide marketers and advertisers with direct access to a specific definable and desirable demographic."

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