Small Businesses Expect Social Media Usage to Become Profitable


Let’s face it, social media is more than just the buzz word of the moment.  Alexa.com, the traffic ranking web information company, highlights the top ten most used websites. 50% of them are social media sites with Facebook landing in the number two spot (Google is number one).  Others on the list include YouTube at number three and Twitter at number 10.

By nature humans are social offline.  That doesn’t seem to change once we get in front of a computer.  But what does it have to do with business?   Some still see social media as a toy for teenagers and others have discovered that it’s not but are uncertain as to how to engage.  Network Solutions highlights something interesting about business and social media in the fourth wave of their Small Business Success Index (SBSI) study.

In June of this year, they worked with the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business to survey 500 small business owners by telephone.

According to the Small Business Success Index (download PDF report here), 20% of businesses actively use social media.  The top 3 social sites they use are Facebook (82%), LinkedIn (38%) and Twitter (30%).

Of those who use or may use social media, it’s roughly a breakeven proposition for at least half of them today.  But they have positive expectations for the near future, when 57% expect to profit from their social media activities within the next 12 months, as this chart shows:

Social Media Profitability for Small Businesses

If you take the Success Index as any indication, there hasn’t been a big payoff from using social media — yet.  But small businesses are not put off, and expect social media to play a role in driving profits in their businesses.

This would suggest we can expect social media usage to grow among small businesses over the next year — given their   confidence that it will pay off.  This also suggests that social media is not a short term fad, but will be a key part of the online marketing mix for small businesses in the future.


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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

16 Reactions
  1. Anita,

    Yet. You said, “if you take the Success Index as any indication, there hasn

  2. Return on Investment(ROI) is a major concern regarding social media. If small business that engage in social media marketing have a clear social media strategy then it would be easy to measure the same. I have created a social media strategy for one of my client recently. Here is the presentation http://www.slideshare.net/cijoaj2003/socialmediamarketingstrategy

  3. Small businesses rely on WOM much more than large companies with large advertising budgets. Social media is just an extension (and potentially an amplification) of WOM, so of course SMBs would do well to continue their efforts.

  4. Interesting however, one thing I would question;

    How many small businesses actually have an accurate measure of true marketing ROI in any area?

    In my experience very few have the processes or systems in place to record and report on this well. It’s encouraging to see optimism, but I do wonder at the calculations done, i.e. what about scaling social media efforts what will the cost of that be?

  5. Small businesses can gain a huge advantage by using social media for marketing and service purposes.

    Social media give the small companies a great opportunity to beat the guys with deeper pockets.

    The use of social media to get in touch with the target audience is a cheap an effective way to build credibility and to find out what customers deserves and what competitors of each size are doing.

  6. Chances are these are the same businesses who have not written a business plan nor an overall social media strategy.

    My clients ask me often about “social media” and I prefer to discuss integrating “social marketing” into their overall communication strategy.

    Make sure your message, that clearly states the problem you solve for the buyers in your market, is found in the places your customers visit.

    But that too is difficult if you do not have a clear understanding of your market, buyers and buying process.

    When in doubt, dive deep into your market and listen.

    Mark Allen Roberts

  7. I don’t believe that social media usage for small businesses can immediately be measured in $. Social media is just a part of the overall marketing strategy. How can a restaurant really measure ROI in $ with social media. I may have seen their ad in a newspaper, saw a friend post something about them on facebook, and get the 411 on them through word of mouth, then I drive by the restaurant one day and decide to stop in for lunch. It is a combination of all those things that make me go there. How can that really be measured?

  8. @ Joleen

    If you mean a single tool to measure social media, than the answer is no! This kind of single tool does not exist now!

    And yes, it can be measured! Not 100% but it can be measured.

    Some metrics to measure impact of social media can be the level of social media site interaction of potential clients who talk about you, including click tracking and source analysis.

    To gain information if and how often your brand is mentioned in social media sites you need to do social media monitoring. Some media can be monitored with automated tools where you set keywords like your brand name, products and your name.

    Some need to be monitored through human eyeballs to simply read through posts and references.

    To bring this data together in a meaningful manner is the real challenge. This can and it is done out there from companies every day.

    When you bring all the necessary data together you are able to see correlation between the social media activities and mentions of a brand, brand awareness level, leads generation and sales.

  9. Though the successful use of social media if sometimes difficult to measure, the demographic behind social media grows daily. The basic formula is simple: More online exposure within social media communities potentially equals more customers!

    For a business to become successful at using social media, they need to identify how consumers are using social media and then get creative with their on-line marketing approach.

    Also, it’s important to note that social media for business is very much like a diversified investment portfolio. A business owner who isn’t using social media is esssentially the equivilant of someone purchasing a home, but not funding their 401K.

  10. It’s a given that social media sites are growing, and that users now mirror population demo’s, the challenge for small business is leveraging a select few social media sites and building a consolidated, well thought out plan to build, retain and grow their customer base.

    By understanding how all the components work, the job at hand is to architect the plan that works best for your business at a budget that works.

    Social media is all about providing content that motivates others to spread the word. However, business need to make sure they offer a level of service (no matter what their product or services are) that clearly differentiates them or outshines their competition…as this one key component allows social media to take it from there.

    SM4BIZ

  11. Social media ROI is not a sufficient enough indicator of the success of your marketing, customer support or service strategies. It is one variable in determining how effectively you are engaging your audience and driving them to action. The strategy you should be measuring, therefore, is an engagement strategy which will include social media, SEO/SEM, landing page optimization, and even traditional marketing channels.

    From there, it is much more credible to talk about social media’s contribution to the overall strategy as it places it in context with what the company is really measuring – revenue, costs, innovation and customer satisfaction. Social media alone will not move the needle on these in any systemic way, at least in terms that the c-suite will appreciate.

  12. I believe the social media has tremendous potential but requires skill and a delicate approach. You could get a lot of friends or enemies quickly.