Commentary

Just One Third of Small Biz Uses Social Media

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Advertisers and marketers are obsessed with social media, but large parts of the U.S. business world remain hesitant or uncertain about using sites like Facebook and Twitter, according to a survey by RatePoint, which found that just 36% of small business owners are using social media to reach consumers. That's about half the rate among larger businesses: earlier this year a survey by KingFishMedia of 457 marketing executives found 72% of respondents said their company had a social media strategy, and the majority of the rest said they will have one in place by next year.

The RatePoint findings were especially interesting because they frankly seemed to suggest that a fair number of small business owners are out of touch with current trends in American society -- namely, the wide popularity and explosive growth of social media. 20% of small business owners said they didn't think that their customers spend time on sites like Facebook or Twitter, and 27% said they weren't sure.

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This is almost certainly not true, considering that there are currently 139 million U.S. Facebook users, representing 62% of the U.S. adult population of 225 million. I can also imagine some skeptic pointing to the example of mom-and-pop stores serving geriatric neighborhoods, but the fact is social media now reaches into all demographics: according to the Pew Internet & American Life Project, social network use among Internet users ages 50+ increased from 22% in April 2009 to 42% in May 2010, while the proportion of Americans ages 70-75 who were online in general increased from 26% in 2005 to 45% in 2009.

Among small business owners who are using social media, one of the key selling points seems to be its low cost, with fully 70% of the utilizing cohort saying they engaged with social media because it is inexpensive. At first blush, this makes sense for a small business with a small budget. But if a start-up has aspirations to become a national brand, taking a casual, low-cost approach to social media risks a bad user experience, or even blowback, if the brand should suddenly become broadly popular (or, heaven forbid, unpopular) but lacks that personnel to manage it social media presence.

5 comments about "Just One Third of Small Biz Uses Social Media".
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  1. Juliette Cowall from Godwin Plumbing & Hardware, October 21, 2010 at 3:39 p.m.

    Maybe small businesses are heeding the advice: "Don't get in without a plan." Or maybe they lack the personnel - or time - to manage a social media presence. Or maybe they lack funds to hire professional help. Or maybe (likely) it's a combination of reasons.

  2. Jen Knoedl from JenChicago, October 21, 2010 at 4:14 p.m.

    If businesses aren't convinced that social media works, or don't think their customers are online, they probably aren't going to hire someone to manage it. And really, to do it well- someone needs to do it all the time, and they need a personality to shine through. They should have time to respond, create friendships and follow trends.

    I thought the number would be at least half of small businesses, but I guess we get caught in our little online circles, we think it's reflective of the world.

    Great post- I'm gonna forward it on.

  3. Jay Terauchi, October 21, 2010 at 5:32 p.m.

    The companies and businesses that I've talked to have no strategy in what they're doing. They feel that a Facebook page is good enough or have the wrong person administrating it. They don't see the value in communicating with their customers and fans. I have to give it to the small businesses, at least they're out there... Great post!

  4. Eric Broyles from megree, Inc., October 21, 2010 at 5:48 p.m.

    Small businesses will likely dip their toes in the social media waters with efforts in cause marketing as they can connect with local charities whose local supporters can also become their customers. There are a number of movements afoot to spur this activity.

  5. Rich Mistkowski from Proforma ROI Promotions, October 28, 2010 at 8:04 a.m.

    I had a meeting with one of my customers yesterday and it was consistent with other customers. This customer does about 45 million dollars in sales and they do not use social media. Their marketing department is extremely small and they think that there efforts are much better if they can connect with their customers directly.They are open to using social media, but were looking for ways to start to engage.

    What surprised me the most was that they were surprised at the mention of having a social media strategy and why it's such a powerful way to engage with existing customers and potential new customers.

    I think it's a combination of things that make small companies shy away from social media, but it's a big committment. Being a small company myself, I know the effort that it takes to handle your current marketing, sales, and production efforts. If you view Social Media as just ANOTHER thing to do, I think you're "dead in the water". I think you need to WANT to engage and then commit yourself and your company to doing it because you see the POWER in it.

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