Social Media Usage By SMBs Often Ad-Hoc

Many small and midsize businesses are using social media without any formal strategy or budget, according to a study by SMB Group.

Kevin Casey, Contributor

April 20, 2011

5 Min Read

Top 20 Apps For Managing Social Media

Top 20 Apps For Managing Social Media


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Top 20 Apps For Managing Social Media

Small and midsize businesses are using social media for a wide range of purposes, but often without any formal strategy or budget, according to a recent study by The SMB Group.

The move to use social channels for business purposes is clear: 44% of small companies (1-99 employees) and 52% of midsize firms (100-1,000 employees) surveyed said they've already made social media a part of their operations. Quite a few more respondents--25% of small businesses and 22% of midsize companies--said that while they're not currently using social sites, they plan to start within the next 12 months. SMB Group partner Laurie McCabe highlights the fairly close adoption rates between the small and midsize segments, which she attributes in large part to social media's accessibility.

"Small businesses usually really lag medium businesses in adoption of technology, and in this case they're not very far behind," McCabe said in an interview. "Getting involved in social media, at least at an ad-hoc level, there are very few barriers. It's a pretty friction-free way to start to do certain things for your business. That's really in evidence here."

That bears out in another of the study's key findings: Many SMBs are using social sites on an ad-hoc basis--that means they have no formally defined plan for their social business activities. McCabe allowed InformationWeek to take a closer look at data collected by the SMB Group for its 2011 Impact of Social Business in Small and Medium Business Study. Its survey, conducted in February, included 750 SMBs across 18 different industries and non-profits.

Small businesses in particular often play social media by ear: If you break down the 44% adoption pie piece, 20% said they do use social sites without any formal plan, while the other 24% reported doing so in a "strategic and structured way." Midmarket companies are more likely to have a defined program in place for social media--one in three midsize businesses takes a structured approach, compared with 19% operating on an ad-hoc basis.

"That doesn't surprise me, because the small businesses are flying around, a lot of people are wearing several hats. It's hard for them to structure anything," McCabe said. "But I think the small business uptake is significant." Structured social media programs at SMBs of all sizes are more likely to have an actual budget associated with them. They're twice as likely to spend money on social media compared with ad-hoc users, and they spend more. The biggest gap is among midsize firms, where the average social media budget is $41,500 (excluding salaries) for structured programs compared with $18,000 for ad-hoc use. Social media budgets across the board aren't especially big: 62% of structured small businesses earmark less than $10,000 per year, while 59% of structured midsize businesses spend less than $50,000 each year.

Regardless of whether or not they take a structured or informal approach to social media, SMBs in general are not using many tools--such as TweetDeck or HootSuite--to manage or measure their social activities. Just 12% of SMBs use any such service, free or paid.

McCabe pointed out another of the study's interesting findings: Responsibility for social media is spread across quite a few different departments at SMBs. "That's as it should be, because you can use social media for everything from marketing to HR," McCabe said.

Sure enough, survey respondents reported a correspondingly wide variety of business uses for social media. The list includes some relatively unsurprising business reasons for using social sites, such as lead generation, brand awareness, and customer service functions. But there also appears to be a significant increase in other uses, too. At midsize businesses, for example, 21% of respondents said they're using social media for internal collaboration, which compares favorably to generating new leads (26%). In the product development arena, 17% of midsize firms reported using social sites to solicit customer feedback. And one in five companies in the midsize segment said they've added a social component to their employee recruitment.

"Social media is starting to be used in non-marketing functions to a pretty high level," McCabe said, noting that ad-hoc users tend to use social media for a much narrower band of purposes. "The businesses, as they get a little more sophisticated and a little bigger, they're definitely seeing the value beyond just this whole marketing thing."

Facebook--and specifically Facebook Pages--stand atop the heap of social channels in terms of penetration, according to the SMB Group study. It rated the highest in terms of usage across all segments. But depending on the specific segment, other channels sometimes rated higher in perceived benefit. Among structured small business users, for example, a company blog was ranked highest in terms of satisfaction. Ad-hoc social media users--both small and midsize--reported the most benefit in coupon sites such as Groupon or LivingSocial. Structured midsize users were happy with their Facebook Page, company blog, and industry-specific communities. The latter is something of an unsung hero in social media, according to McCabe.

"These are big," McCabe said, adding that industry-specific communities tend not to become households names because of their particular focus. But just because they don't have Facebook's brand recognition, doesn't mean they should be overlooked. "[SMBs] are getting a lot of value out of them."

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About the Author(s)

Kevin Casey

Contributor

Kevin Casey is a writer based in North Carolina who writes about technology for small and mid-size businesses.

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