Very-Small Businesses Use Social Media, But Spend Little

Very-small businesses, especially those with one to 10 employees, do not spend much money on their social media efforts. In fact, perhaps 42 percent say they spend nothing additional to support their activities, and perhaps 17 percent spend $100 or less on an annual basis, a survey by Zoomerang suggests. As many as 74 percent of respondents further say they do not employ anybody to manage social media programs.

None of that should be terribly surprising. One of the attractions of using social media is that, while it takes time, it does not necessarily require incremental spending.

Nearly half of the surveyed SMBs use social media to market to customers; of those, an overwhelming majority (86 percent) have Facebook accounts.

The top three favorite features used by both SMBs and consumers are photos, messages and status updates. At the same time, the reported "most effective" tactics for businesses to reach customers are wall posts and direct messages.  Zoomerang SMB survey:

The top three reasons SMBs use social networks are: connecting with customers, visibility and self-promotion. In other words, SMBs use social media for a mix of reasons, including lead generation and branding, loyalty and customer acquisition.


The top three things businesses want to know from customers on Facebook are customer satisfaction with products, customer satisfaction with service provided, and ideas for new business promotions. In other words, "how do you like our products," "how do you like the experience of buying" and "what can we do to convince you to buy more?"

How Do You Market an Intangible Product?

Some products, especially intangible products such as legal or health services, marketing advice, crisis management and other services, are very hard for buyers to evaluate, in advance of purchase. There is no physical object to inspect, so a potential buyer has to try and determine value some other way.

That's why credentials, furniture, street address, references and "experience" become proxies for value and competence where an intangible product is concerned. Even tangible products such as fashion items or vacation resorts have a huge and similar problem, namely creating a brand or mystique that helps potential buyers evaluate the product, which either is a means to another end, or an "experience."

Those are reasons why content marketing can be effective. Content marketing can help establish credentials, provide evidence of experience and knowledge and thereby reduce the "risk" a prospect faces when buying an intangible product they might not ever have used before, or which gets used infrequently.

By creating great, valuable content you are setting up your brand as a trusted expert, someone your target audience can count on. They learn that your company is one of the real experts in your industry. This helps builds your authority and trust level. Those are proxies for the product attributes potential buyers otherwise evaluate directly, in the case of tangible goods.

Content Marketing Tip: Focus on Educating Your Target Audience

Consumer Ratings, Reviews are Preferred Product Information Sources

Consumers are spending more time than ever using social media, according to Nielsen and NM Incite, a Nielsen/McKinsey company. And social media seem to be quite  influential. In fact, 63 percent of survey respondents say their "preferred" way of learning about products and services is from consumer ratings. 


Some 62 percent say their preferred method of learning about products is from consumer reviews. 


About 60 percent of consumers researching products through multiple online sources learned about a specific brand or retailer through social networking sites, Nielsen says. 


Active social media users are more likely to read product reviews online, and three out of five create their own reviews of products and services. Women are more likely than men to tell others about products that they like (81 percent of females vs. 72 percent of males). Overall, consumer-generated reviews and product ratings are the most preferred sources of product information among social media users.

How Social Media Impacts Brand Marketing

Coca Cola "Rules" Social Media

Coca-Cola ranked as the world’s top brand, with a following on Facebook of 34 million fans, growing at a monthly rate of nearly three percent, posting seven times a month, each garnering more than 235 comments and nearly 1,750 “likes,” according to Covario.

The top 100 leading brands on Facebook includes Hyundai, Disney, Bayer, HP, Victoria’s Secret, Best Buy, Samsung Mobile, Dr. Pepper and Macy’s among the top 10 brands using Facebook effectively.

Perhaps significantly, 35 percent of respondents say “driving sales” is the number one priority for social media programs, but 47 percent see the goal as driving engagement and driving brand awareness, and another 14 percent say they are “driving friends.”

Overall,  65 percent are using their social media programs, and their Facebook pages, to drive “soft” conversions, not explicit sales. Those results point up the fact that social media programs can have multiple goals. But the findings also illustrate the tension posed by social media. To the extent that the purpose is “community” or “socializing” or “fun,” does lead generation interfere with those purposes? If not, how can lead generation be reconciled with the other values? 

The study also has other implications. Traditionally, media efforts by brands have come in clear buckets: paid media (advertising), earned media (public relations, media relations, press relations) and owned media (brands acting as publishers and content creators on their own sites). 

The Covario study suggests top brands fund social media programs partly out of advertising budgets, partly out of PR budgets and partly out of new budgets. Both in terms of practice and internal thinking and budgets, social media is a new mix of outbound communications, marketing and sales promotion.

In many ways social media is a replacement for traditional advertising, public relations and marketing. In other ways it is a new blend of tactics. The rather clear implication is that competencies and skills also will have to change, both on the part of brands and other practitioners in the ecosystem.

At one level, the changes are "merely" about the ways brands spend money. At another level, the changes also reflect and contribute to a change in our understanding and practice of media. 

Historically, the growth of media has been fueled by advertising. If advertising support changes, so will media. In simplest terms, if traditional media has been supported by advertising, and advertising spending shifts to social media, there will be less traditional media and more social media.

Facebook users are “active” users, or using the application  more than four times per week. Less than 40 percent of Twitter users are considered active users, by way of comparison.

Facebook counts nearly 50 percent of its user base as power users (use the site at least once per day). A study done by comScore last year showed that Facebook occupies nearly 10 percent of the user time online globally. Users were spending an average of 450 minutes per month on the platform, compared to 230 minutes on Google, for example.

Facebook users number 800 million as of the time of the writing, more than any other social media platform. Twitter is estimated at 245 million users and LinkedIn, the key professional social platform, 120 million users.

Facebook tips for brands

95% of Marketers Increasing Social Media Investments

Marketers routinely use multiple social media platforms, about 4.6 on average, according to a study by Buddy Media and Booz & Company. Facebook and Twitter are the two platforms used most frequently.

Perhaps significantly, “softer” success drivers were cited, compared to budgets. About 94 percent of respondents said ability to react fast was important. Some 93 percent said a clear champion was key. Just 53 percent said a “dedicated budget” was a key success factor, while just half indicated that a “head of social media” company-wide was a key element for success.

Some 96 percent of respondents said they use social media for advertising and promotions, while 86 percent use it for public relations. About 75 percent use social media for customer service.

Fully 90 percent of respondents see social media as most useful at the top of the sales funnel, to drive branding. Just 46 percent saw social media as most useful for generating leads or sales.

And 95 percent of respondents plan to increase social media spending.







Booz & Co Buddy Media Campaigns to Capabilities Social Media and Marketing 2011

Social Media Drives Restaurant Spending

A study of restaurant consumers by Ogilvy and ChatThreads shows that individuals exposed to social content are significantly more likely to increase their spending and consumption than those who aren't exposed.

There was a 2-7 times greater likelihood of higher spending or consumption depending on the media encountered by the study group. The sales impact was most pervasive when social content was combined with other types of media such as press releases, out-of-home media and TV advertising.

Additionally, out of over 20 channels studied, social content exposure was associated with the largest shift in brand perception during a seven-day period.



Despite these strong social content impact findings, consumers are seeing relatively little branded social content during their daily routine. Only 24 percent  of the study group reported exposure to social content, compared to a 69 percent exposure rate to TV ads.

The final report is available  here.

Ogilvy ChatThreads Social Media Sales Impact Study 2011

View more documents from 360 Digital Influence, Ogilvy PR Worldwide

Social Media Revenue $29 Billion in 2015

Worldwide social media revenue is on track to reach $10.3 billion in 2011, a 41.4 percent increase from 2010 revenue of $7.3 billion, says Gartner. Global social media revenue is forecast to reach $14.9 billion in 2012 and $29.1 billion in 2015.



Advertising revenue is, and will remain, the largest contributor to overall social media revenue. Social media advertising revenue is forecast to total $5.5 billion in 2011, and grow to $8.2 billion in 2012. Advertising revenue includes display advertising and digital video commercials on any device including PCs, mobile and media tablets.
            
Social gaming sales will reach $3.2 billion in 2011, growing to $4.5 billion in 2012.

Social media subscriptions will conribute a modest $236 million in 2011 and total $313 million in 2012. Social media revenue

Social Media Statistics

It's good to quantify, when thinking about mobile social media.

 

Social Media Can Drive 20% to 40% Higher Spending

A recent survey of more than 3,000 consumers by Bain & Company found that customers who engage with companies over social media spend 20 percent to 40 percent more money with those companies than other customers. They also demonstrate a deeper emotional commitment to the companies, granting them an average 33 points higher Net Promoter score, a common measure of customer loyalty.

Up to this point, a disproportionate share of those results appear to have been reaped the big early adopters.

The gap between the early adopters and those waiting to take the plunge has actually widened. While the average billion-dollar company spends $750,000 a year on social media, according to Bain & Company analysis, some early adopters such as Dell, Wal-Mart, Starbucks, JetBlue and American Express invest significantly more. In some instances, the investment is tens of millions of dollars.

Bain argues that social media can create value at virtually every stage of the sales funnel, from awareness to retention.

Putting social media to work

Consumers Want to Know What Others Think about Brands

New research by NM Incite, a Nielsen/McKinsey Company shows that the number-one thing consumers use social media for as it relates to their favorite brands is to find out what others are saying about brands and services.

Perhaps the surprising finding is that the top reason for using social networks, in relationship to brands, is not to get coupons or discounts, or to get information about new products or even to provide feedback of their own, be it postive or negative.

Consumers use social media to read reviews

Advertising is Revenue Model for Most Social Networks, So Far

Observers used to worry about how social networks such as Facebook, LinkedIn, Twitter and now Google+ would create a sustainable revenue model. So far, the answer has turned out to be "advertising." But there are some additional questions that arise from such asnwers. 


Sometimes it is hard to precisely figure out what business social networks are part of. 


Sure, at a high level, every business has the primary task of creating a customer. At a fundamental level, that's the "business" every business must master, with profits being the price of continuing to create and sustain those relationships. Beyond that, every discrete business can be categorized by its products, revenue models, technology approaches, geographies served, revenue and customer segments, among other potential taxonomic approaches. 


Google is a hard firm to characterize, for example. It makes its money from advertising. Normally, if you ask what sort of company makes its money that way, the answer is "media." But Google always says it is a technology company, not a media company.


There are reasons. Valuations of media companies carry lower multiples than technology companies. The content Google wants to index comes from content and media companies that aren't comfortable with the idea that Google is a competitor. So Google has a couple of good financial reasons for positioning itself as a technology company, not a media company. 


But Google is the biggest technology company you've ever heard of that makes its money from advertising rather than hardware or software. It's just hard to categorize. The issue isn't exclusive to Google. Is Apple a media company because it sells music, video and games? 


Is Amazon "just" a retailer now that it creates and sells Kindles, and sells magazine, newspaper, book, music and video content? 


Back to the original question, what is a social network? Social networks make their money on advertising. And what sorts of companies historically do that? Media companies. 

Social media revenue 

Facebook Dominant Social Network for SMBs

Among the 44 percent of SMBs using social media, more than half (59 percent) spend less than $100 on social media marketing, however. As we often say, social media in some ways does not take lots of money, but it can take lots of time.
Where it comes to online marketing, small and medium-sized businesses have their work cut out for them.

Time- and money-strapped, SMB marketers often receive light budgets and minimal staff to help them promote their business and generate leads across a variety of formats ranging from social media to search marketing.

As a practical matter, according to Zoomerang, the first priorities are the company website and email marketing.

Social media, however, is gaining in momentum: 44 percent
of U.S. SMB decision-makers have used or are using social media in 2010, up 10 percentage points from 2010.

SMBs are sticking predominantly to the three main social networking sites: Facebook, Twitter and LinkedIn. 


However, SMBs were twice as likely to turn to Facebook (86%) as they were Twitter (33%) or LinkedIn (41%).

Facebook Dominant Social Network for SMBs

Small, Mid-Size Business Embrace Social Media

In 2011, 80 percent of U.S. businesses with 100 or more employees will use social media marketing, according to eMarketer. In 2008 42 percent of companies marketed using social

Nearly half of mid-sized businesses are using Facebook, Twitter and LinkedIn to find new customers, according to the American Express OPEN “Small Business Monitor.” Some 35 percent of U.S. small businesses reported using online social networking for marketing, up from 15 percent in fall 2009, that report suggests.

In addition, 12 percent of respondents were using blogs, nearly double the figure from fall 2009.

New Data: Social Media More Important to Small Businesses

Social Media, Mobile Marketing Top Emerging Channels Used by Enterprise Marketers

Social media remains a key area of activity among enterprise marketing executives using emerging marketing channels, the latest survey of enterprise marketing execurtives by Unica has found.

About 53 percent of respondents are using social media now. But marketers’ enthusiasm is less intense than in 2010, suggesting that many have passed the peak of inflated expectations caused by the hype around social media, and that practitioners now are focused on finding the value that social channels can yield.

Mobile marketing is the other emerging channel.

Some 43 percent of respondents say they currently use the tactic, with another 23 percent planning to do so within a year.

Adoption of emerging channels increased over 2010, in large part because marketers are under intense pressure to accomplish more with less, and the new channels are viewed as lower cost ways to achieve objectives.

More importantly, when the emerging channels are backed with systems for capturing, managing and distributing crucial data regarding customer and prospect behavior, they become golden opportunities for personalizing marketing campaigns and reaching individual customers with more timely, more relevant messages.

The online and direct marketers who responded to the survey represent a wide range of industries, 60 percent from from North America and 40 percent from Europe.

The report is based on a survey of about 300 respondents All responding companies report more than $100 million in annual revenue; the largest block (54 percent) reporting $1 billion or more per year.

read the study here

Content or Context? Both, but Context Might be More Important than You Think

(Graham Brown mobileYouth) #Trends: Content vs Context

View more presentations from Graham Brown

10 Essential Twitter Stats

10 Essential Twitter Stats

View more presentations from HubSpot Internet Marketing

Social Media Marketing by the Numbers

Social media marketing now represents about $1.7 billion in expenditures. Facebook gets 53 percent of that. Twitter gets only about three percent. But I'd watch Twitter.

Social Media Marketing by the Numbers L2: A Think Tank for Digital Innovation

63% of Millennials Use Social Media to Engage with Brands

About 63 percent of Millennials use social media to engage with brands, a new study by McKinsey & Company has found.

A Majority of the the Emerging Affluent Uses Social Media to Engage with Brands

Email, Social Media to Get More Spending by Enterprises

According to a November 2010 survey of business executives around the globe by StrongMail, nearly two-thirds of companies will increase spending on email marketing, and 57% will put more dollars toward social media marketing. Search took a distant third place with 41% of respondents indicating they would spend more.

Email and social will continue to get closer as more marketers integrate the two channels with each other. More than a quarter of respondents said they had already formulated and implemented a strategy for making email and social work together, and another 43% plan to make efforts toward integration in 2011, though some are more prepared than others.

Email, Social Media to See More Marketing Dollars in 2011 - eMarketer

3 Metrics to Prove Social Media Marketing is Working

Ultimately, all marketing channels must prove their worth. Right now, social media are in their infancy, and so are being widely nurtured despite clear evidence of return, simply because some investments initially are strategic, and only later are tactically justifiable.

At some point, though, social media will have to demonstrate return on investment in the somewhat imprecise way all other channels must: on lead generation and customer acquisition, even though those metrics are hard to attribute to any specific channel when multiple channels are used.

In the near term, people can use proxy measures, such as traffic growth, but that ultimately is a just a proxy for the other measurable outcomes any business has to rely on. 

read more here