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Study: 85% of SMBs Use Social, 44% Say It’s Top Driver of New Biz

In a number of Local Search Association (LSA) surveys social media is consistently perceived as one of the most critical marketing channels among small and medium-sized businesses (SMBs). For example, parallel surveys of industry professionals and SMBs found that the two groups agree that social is a top three channel for small businesses.

Reinforcing this point, a new Borrell Associates survey found that 85% of local advertisers — mostly SMBs but this isn’t clear in the study — now have a presence on at least one social platform. Just five years ago in 2011 this figure was only 57%.

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Despite this broad adoption of social media, only 44% considered social a significant driver of new customers (above). In other words, 56% of SMBs do not consider social media a significant driver of new customers. This suggests that SMBs are using social media for reasons other than customer acquisition (retention, customer service, etc.).

Paradoxically, a recent LSA and Camilyo report found that 72% of SMBs said their marketing was focused on attracting new customers. If SMBs want new customers and social media is seen as less effective, why would so many be using it? One explanation could be that SMBs see the value in engaging with customers on social platforms but have unrealistic ROI expectations, resulting in perceived inefficacy.

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Another interesting takeaway from the study was that very small businesses with 10 employees or less were bringing the average number of businesses with a Facebook page down (above). While some categories in the study showed 90% and greater Facebook adoption, only 77% of very small businesses had a Facebook page.

The very small business carries a lot of weight in studies like this given that the vast majority of businesses in the U.S. fall into that category. Limited marketing budgets, time and digital know-how remain the barriers to adoption for many of these businesses, but also represent a huge opportunity for providers that can crack the very-small-business-code.

As it relates to paid advertising, 62% of SMBs are paying for ads on Facebook. The study went on to say that in 2016 those who bought Facebook ads and boosted posts spent about $1,500 for the year. Facebook’s tremendous growth¬†as of late can be attributed to SMBs.

While small businesses are using social media for marketing, particularly Facebook, there remains some points of friction in this usage. How to use social and what to expect from these channels remain unclear for many of these businesses. Education and experience may be what is needed for social media to become more than a bandwagon trend and a real driver of objectives.

2 Responses to “Study: 85% of SMBs Use Social, 44% Say It’s Top Driver of New Biz”

  1. I’m highly skeptical of this data. Company website isn’t an exclusive channel like Direct Mail for example. All these channels drive traffic to the website, where customers usually convert. Yes, customers can call, email or walk-in but all those channels do drive website traffic no matter how small. This makes me question the entire dataset.

    Thoughts?

  2. Greg Sterling says:

    The larger point is that all these channels do directly or indirectly work in concert — as you say. The survey data say what they say. Questions: what’s the population responding? How are the questions phrased? Do the respondents understand what’s going on?

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