Study: Small businesses may not fully understand social media

Although many small businesses have jumped on the social bandwagon by creating profiles or even branded microsites, it seems many still may not fully understand how social marketing is different from traditional marketing. According to a recent CitiBank/GfK Roper survey three-quarters of small businesses find social networks are not working for them.

by Kristina Knight

The businesses report that they aren't finding valid leads via social sites such as Facebook, LinkedIN and Twitter. Instead, 61% of these businesses report that search engines still funnel more valid leads and in-market consumers to their businesses.

The survey also found:

• 42% of small businesses are using the Internet more to grow the business
• 57% are utilizing company websites in additional ways
• 86% report they are not in the social space at all
• Email marketing (28%) and online advertising (25%) are two leading ways small businesses are generating revenue

The question has to be, however, do these small businesses understand just how different the social space is from online, mobile or traditional advertising.

For example, consumers may 'friend' a brand or company they like, but this may not result in instant purchases. Despite this, it is important for small businesses to make regular status updates, Tweet daily specials/deals or even create circulars which can be shared through widgets. That way Consumer A can share the information with Social Friend B. In turn, this could net the brand a 'sale' from Social Friend B which doesn't seem to have come from the social network.

Finally, there are the social consumers who make recommendations, Tweet purchases or blog about new products. This one consumer could push twenty or more sales, but the social network hosting the recommendation, Tweet or blog won't appear to have had an effect.

Tags: CitiBank, GfKRoper, social marketing, social networks, social payoff, social profile pages, social spending