USA Today
Alice and Donald Murray of Bangor, Pa., use social media, such as Facebook, left, to promote their ribbon business, Over the Moon Ribbons.
SAN FRANCISCO — A surge in social-media use by small businesses reflects a shift in how they operate and their comfort with increasingly easy-to-use technology.
In growing numbers, small-business owners are adopting social-networking services, location-based services, Twitter and online video to promote products and services, according to a new study by MerchantCircle, a social network for small businesses. It polled a fraction of its more than 1.3 million members.
The survey results are the strongest evidence yet that small businesses — which account for more than 90% of all U.S. companies and fuel the economy — are accelerating their use of social media at the expense of traditional media such as newspapers, the Yellow Pages and radio. Even e-mail messages have taken a beating.
Businesses with fewer than five employees "see Facebook and others as a way to reach targeted consumers" while saving marketing expenditures during a rough economy, says Darren Waddell, vice president of marketing at MerchantCircle.
For the first time, social media has become the most visible way for small businesses to promote their products and services. More than half of nearly 10,000 respondents nationwide say they plan to create or maintain a social-networking presence in the next three months, compared with 41% in the first three months of this year.
That is the highest figure since the survey started a year ago.
At the same time, adoption of location-based services has grown rapidly — 32% of merchants familiar with Foursquare use it, compared with 25% in March. Twitter is gaining favor, too: 8% more merchants intend to use it now than in the first three months of the year. The University of Maryland's Smith School of Business says social technology adoption rates in the U.S. doubled in the past year, to 24% from 12%.
Still, business' embrace of social media does not necessarily translate into profits, says HipChat, a group chat and messaging service for companies. More than 90% of the 2,000 small businesses it works with use social media, but few have seen a business benefit. A Compete Online Shopper Intelligence study suggests some consumers are slow to accept social media as a shopping resource.
Yet tens of thousands of small businesses advertise on Facebook, up three times from a year ago. More than 1 million small businesses have Facebook profiles reaching hundreds of millions of customers. Many small-business owners used Facebook for personal use before they started their companies, according to Facebook.
"People are familiar and comfortable with Facebook," says Tim Kendall, director of monetization at Facebook. "Regardless of your business, many of your customers probably are already on Facebook."
"We're seeing a (recent surge) in the use of Facebook by local businesses," Kendall says.
Social media's allure
Small-business owners are gravitating to social networks in large part because technology has evolved to the point where anyone — no matter what age or tech background — can turn their personal passion into a thriving online business.
Alice and Donald Murray acquired Over the Moon Ribbons, a maker of discount ribbons, in 2004 after Alice retired. The tech newbies, who have been married for 49 years, initially sold ribbons at flea markets before their daughter Sharyn persuaded them to sell online.
They began using Facebook, Twitter and software from e-commerce company BigCommerce this year. In six months, they've grown the business to more than $1,000 a month. The software they use makes it easy to design and run an e-commerce site, with built-in search engine optimization services and marketing functionality. The program will soon let small merchants integrate Facebook "Like" buttons and other functions. "The online stuff has a far reach without losing the personal touch," Alice Murray says. "We do a lot of communication, still, on regular e-mail."
Online sales at Southern Jewlz have doubled in six months since recent college grad Randa Yezak, 23, started using Twitter and e-commerce software. Her 2-year-old business also has 8,000 fans on Facebook.
"The value of Facebook is that it gives you efficient ways to retain current customers and reach out to and find new customers," Kendall says. "It is happening on a scalable, digital way among you and your friends."
In growing numbers, small-business owners are adopting social-networking services, location-based services, Twitter and online video to promote products and services, according to a new study by MerchantCircle, a social network for small businesses. It polled a fraction of its more than 1.3 million members.
The survey results are the strongest evidence yet that small businesses — which account for more than 90% of all U.S. companies and fuel the economy — are accelerating their use of social media at the expense of traditional media such as newspapers, the Yellow Pages and radio. Even e-mail messages have taken a beating.
Businesses with fewer than five employees "see Facebook and others as a way to reach targeted consumers" while saving marketing expenditures during a rough economy, says Darren Waddell, vice president of marketing at MerchantCircle.
For the first time, social media has become the most visible way for small businesses to promote their products and services. More than half of nearly 10,000 respondents nationwide say they plan to create or maintain a social-networking presence in the next three months, compared with 41% in the first three months of this year.
That is the highest figure since the survey started a year ago.
At the same time, adoption of location-based services has grown rapidly — 32% of merchants familiar with Foursquare use it, compared with 25% in March. Twitter is gaining favor, too: 8% more merchants intend to use it now than in the first three months of the year. The University of Maryland's Smith School of Business says social technology adoption rates in the U.S. doubled in the past year, to 24% from 12%.
Still, business' embrace of social media does not necessarily translate into profits, says HipChat, a group chat and messaging service for companies. More than 90% of the 2,000 small businesses it works with use social media, but few have seen a business benefit. A Compete Online Shopper Intelligence study suggests some consumers are slow to accept social media as a shopping resource.
Yet tens of thousands of small businesses advertise on Facebook, up three times from a year ago. More than 1 million small businesses have Facebook profiles reaching hundreds of millions of customers. Many small-business owners used Facebook for personal use before they started their companies, according to Facebook.
"People are familiar and comfortable with Facebook," says Tim Kendall, director of monetization at Facebook. "Regardless of your business, many of your customers probably are already on Facebook."
"We're seeing a (recent surge) in the use of Facebook by local businesses," Kendall says.
Social media's allure
Small-business owners are gravitating to social networks in large part because technology has evolved to the point where anyone — no matter what age or tech background — can turn their personal passion into a thriving online business.
Alice and Donald Murray acquired Over the Moon Ribbons, a maker of discount ribbons, in 2004 after Alice retired. The tech newbies, who have been married for 49 years, initially sold ribbons at flea markets before their daughter Sharyn persuaded them to sell online.
They began using Facebook, Twitter and software from e-commerce company BigCommerce this year. In six months, they've grown the business to more than $1,000 a month. The software they use makes it easy to design and run an e-commerce site, with built-in search engine optimization services and marketing functionality. The program will soon let small merchants integrate Facebook "Like" buttons and other functions. "The online stuff has a far reach without losing the personal touch," Alice Murray says. "We do a lot of communication, still, on regular e-mail."
Online sales at Southern Jewlz have doubled in six months since recent college grad Randa Yezak, 23, started using Twitter and e-commerce software. Her 2-year-old business also has 8,000 fans on Facebook.
"The value of Facebook is that it gives you efficient ways to retain current customers and reach out to and find new customers," Kendall says. "It is happening on a scalable, digital way among you and your friends."
