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Seven in 10 small businesses plan to use social media in the next 12 months, even though many of them are unsure what they will gain by doing so, according to Techaisle.
The research firm recently polled 406 U.S. small businesses with between 1 and 99 employees. Some 70% said they're very or somewhat likely to use social sites for promotional purposes during the coming year. Yet, 45% listed "We are not sure how these technologies would help our business" as a reason to skip social media in their marketing plans. In spite of the apparent disconnect between adoption and return on investment, smaller firms are still going social. Techaisle found that 42% of respondents currently use Facebook, Twitter, or both for their business. That stat jumps to 55% when LinkedIn is included in the mix.
"It's become the 'in' thing," said Techaisle CEO Anurag Agrawal in an interview. "You have a Facebook Page, but these small businesses really do not know how to monetize it." While Agrawal said that some small businesses do a good job of deploying various social sites to create revenue opportunities at a local level, most try to figure it out on the fly only after they've launched a presence. "The majority are creating it and they are learning about how Facebook can actually complement what they have on their Web site or how they can evolve it over the next year or so."
Facebook Pages are the most common tactic of businesses currently using social media, with more than one in three respondents in Techaisle's study employing the tool. LinkedIn follows closely on the heels of Facebook Pages; around 34% of small businesses use the professional networking site. Facebook Events have a similar foothold -- 31% reported using it. Techaisle found that 28% of small companies are blogging.
Roughly 84% of firms that already use social media said it has increased awareness of their business; that closely correlates to the 86% that said their own Web site has done the same thing. But just 68% of small businesses said social media has helped them make more money, compared with 81% that attributed revenue increases to a company-owned Web site.
Twitter lags Facebook and LinkedIn in small business usage -- roughly one in four smaller firms are tweeting. "One of the key reasons here is that Twitter is more personal than Facebook," Agrawal said. By that, he means that he believes Twitter is better suited to individual personalities rather than organizations. He gave as an example following Walt Mossberg's feed rather than all of The Wall Street Journal, in part to avoid being inundated with too many updates. Agrawal notes that SMBs often don't have well-known personalities that customers can seek out on Twitter.
The gap could be closing, however. Research firm eMarketer said on Monday that Twitter usage among small and midsize businesses (SMBs) doubled between Q3 2009 and Q4 2010 to 19%, based on data from BIA/Kelsey and ConStat. That said, eMarketer's report likewise found that tweeting is still not nearly as common among SMBs as some other social avenues: Nearly half of respondents in the study reported using Facebook for their business. eMarketer also reported that one in three SMBs have increased their social media advertising, and 46% said they're planning further increases in the next 12 months.
Agrawal's Techaisle found a lower rate of small businesses advertising on social sites -- roughly one in four. The CEO said that the decision to buy advertising rather than just creating -- and maintaining -- a social media presence through free applications is often a challenging one for small businesses.
"The next problem [SMBs] grapple with is: Am I better off creating an ad in Facebook, and promoting my business through the ad?" Agrawal said. "How does that ad compare with Google AdWords? Those are the questions which nobody has an answer for [yet]."
