Small Business Social Media Usage Booms

A study finds that almost one of every five small business owners now actively uses social media for their business.

Benjamin Tomkins, Contributor

February 19, 2010

4 Min Read

A study finds that almost one of every five small business owners now actively uses social media for their business.Though small business owners still have concerns and reservations about social media, the numbers of businesses using social networking platforms for their business is growing fast. The latest wave of results from the Small Business Success Index (SBSI) report that small businesses social media adoption has zoomed from 12% to 24% in the past year. That includes investments in applications, blogs, and profiles on Facebook and LinkedIn.

Marketing and customer engagement are the main drivers for small businesses combined with the perceived cost-effectiveness of social media. With the current economic climate, cost containment may have driven more business to social media. Commenting on why he uses social media for his business, Dr. Alan Glazier, CEO and Founder, Shady Grove Eye and Vision Care, said, "In order to meet the growing challenges of a tough market last year, I was forced to consider alternative options to keep my business visible. With a very small investment in social media marketing, I was able to generate new business opportunities. Our Google ranking is consistently number one for many of the phrases people use to search for eye doctors in and around my city, and we have received a 'bump' in terms of new visitors to the site. My blog has been picked up by different news sources and led to media interviews. I am now recognized as a thought leader in social networking within my profession and lastly but most importantly, my marketing budget has been reduced by more than 80 percent."

With economic malaise still top of mind for business owners, the SBSI research sought to unearth positive effects of the downturn. The findings include the following:

  • 72% of small businesses have found ways to operate more efficiently

  • 47% have been led to find new products and services that benefit customers

  • 43% have become better teams as hard times force people to work together

Tight belts or no, maintaining a strong online presence continues to be important for small business as evidenced by these findings:

  • Company Web sites are a top technology investment in the next two years, with small businesses either adding new features/functionality to their existing Web sites or building one from scratch.

  • The ability to showcase their products and services online to attract new customers is second in the hierarchy of technology investments small business owners plan to make in the next two years.

  • Social media investments rank third in small business investments to be made in the next two years.

Getting back to that growing social media investment, customer acquisition is the main priority for small businesses using social media. According to the SBSI findings, here's where those business are putting their efforts:

  • 75% surveyed have a company page on a social networking site

  • 61% use social media for identifying and attracting new customers

  • 57% have built a network through a site like LinkedIn

  • 45% expect social media to be profitable in the next twelve months

That profitability expectation within 12 months may not pan out and hints at the gap between social media and previous online paradigms -- establishing a traditional ROI and maintaining lockdown control of the message aren't realistic expectations for social media. Underscoring the reluctance to accept social media as a fundamentally different playing field are the second and third of the following concerns that small business owners have about social media.

  • 50% of small business social media users say it takes more time than expected

  • 17% express that social media gives people a chance to criticize their business on the Internet

  • Only 6% feel that social media use has hurt the image of the business more than helped it

As an aside, it's notable that social media security didn't surface as a leading concern.

Though the adoption rate for social media is exploding for small businesses, the pursuit of customer acquisition as the top priority may be misguided. In commenting on the SBSI findings, Janet Wagner, director of the Center for Excellence in Service at the University of Maryland's Robert H. Smith School of Business, a sponsor of the study, suggested an alternative goal. She said, "Social media levels the playing field for small businesses by helping them deliver customer service. Time spent on Twitter, Facebook, and blogs is an investment in making it easier for small businesses to compete."

Get more InformationWeek SMB social media coverage NOW.

Follow Benjamin Tomkins on Twitter @ Follow InformationWeek on SMB Twitter @ Get InformationWeek SMB on your mobile device @

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights