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Last month, both Forbes and USAToday ran stories on how social media isn’t working for small businesses. The Forbes piece was titled, “Why Small Businesses Are Losing On Social Media.” The USAToday piece was a bit stronger, “Study: Social Media a Bust for Small Businesses.”
Both were in response to a survey recently released from Manta revealing that most small businesses (over 60%) don’t see any return on investment (ROI) on their social-media activities. That bares repeating – most small businesses don’t see any return.
When I came up with the title for this I was not yet aware of any of this. As a business owner myself who’s done extensive research with years of direct personal experience with social media, I feel the need to share my perspective with fellow business owners trying to decide the best way to spend their marketing money.
The Problem With Social Media
The Manta study was not a surprise. Despite the social media hype, I know that many small business owners are having a hard time justifying the expense of a social media marketing effort – and for good reasons. For one, it’s hard to be certain what a social media marketing effort even means. Talk to four social media experts and there’s a good chance you’ll get four answers. Assuming you get an answer you like, it’s then hard to interpret the results.
Not a strong case for investing a ton of money, or time, in social media.
No one likes to be unclear about what they’re paying for and that’s especially true with small business owners. It’s hard to spend hundreds, or thousands, on something you can’t show or cleary explain to your spouse. While we know there’s no guarantee on ROI (Return on Invesment), we like to see what we’re paying for and have a good sense of its value.
You’d think things would be different from 100 years ago when John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” If he were commenting today, referencing social media, it wouldn’t be, “Half the money I spend is wasted”, it’d be “60%.”
Social Media experts will argue that it’s not working for 60% of small business owners because they don’t truly understand it, they’re going about it wrong. They’re not working with the right people and they’re not giving it enough time. All of those things may be true, and all of those things can be said about all marketing.
While some liken social media, and social media experts, to the necessary evil of auto maintenance and auto mechanics, journalist B.J. Mendelson takes it a bit further. He calls social media BS. In his new book, “Social Media Is Bullshit,” Mendelson examines popular tales of social media “success” and reveals some unsettling truths behind the surface.
While I appreciate Mr. Mendelson’s perspective, it seems harsh. Anything that provides a platform to present our product, service or perspective to our target audience and potentially engage them, isn’t BS.
Confusing? Yes. Over-hyped? Probably.
However, Mr. Mendelson is right about one big BS aspect of social media: Facebook “Friends” and Twitter “Followers.” As we all now know, most Facebook Friends aren’t really friends and most Twitter Followers don’t follow. Adds Regina Hartt of Hartt’s Pool Plastering: “No amount of Facebook Likes is going to sway a prospective customer to spend 5 to 40k on a pool plastering job.”
So, that’s the problem I see with social media.
Even social media rock star, Gary Vaynerchuk, admits it’s a confusing landscape. I just returned from a Digital Summit where Vaynerchuk spoke and stated that “Marketing in 2013 has never been harder.” He then added, “But you have no choice. You have to do marketing.”
He’s right, we have to market. There just may be better ways to do it than with social media.
Thumbs Down Photo via Shutterstock
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Anita Campbell
Hi john,
Hmmm, you missed our write-up about that Manta study. I did not come to that conclusion — at all. The USA Today article was lazy reporting. The person reporting it didn’t understand diddly about small businesses, and looked at one number and didn’t dig deeper. Everyone else just parroted what the first writer wrote. Not their best moment as journalists.
Here’s my set of conclusions, and I think they are much more realistic:
https://smallbiztrends.com/2013/04/return-on-investment-from-social-media.html
It’s a case of small businesses getting results, but not being able to pin an actual dollar amount to it. But that doesn’t mean it is worthless or a waste of time. That’s simply a fact of life of what it takes to track and measure. In a perfect world, we’d all be able to track everything perfectly and measure it down to the penny. But we don’t live in a perfect world, with unlimited resources to track and measure everything.
If you read this recent Harvard Business Review Article, it becomes clear that the picture is much muddier when it comes to ROI for marketing, than previously believed. Marketers tend to overstate the value of direct response marketing, search and pay-per-click. They understate the contributions delivered by other forms of marketing. Why? Because some forms of marketing are not as easy to measure. If you just count “last click” without taking into account what led up to that click, you can get a skewed view of the value of certain types of marketing:
http://hbr.org/2013/03/advertising-analytics-20/ar/1
– Anita
john Follis
Thanks for the comment, Anita. And I did see and enjoy reading your write up.
john Follis
A big part of the problem is the incredible hype which, I’m afraid, has caused many false expectations.
Anita Campbell
Yes, some people hype social media, and that’s too bad. It has value, for sure. It’s not a silver bullet for everything, though.
C.Orris
Thanks, for confirming something I’ve thought was true….we’ve been talking about facebook vs. twitter for awhile now. It feels like we need to just have one person deal with the internet, while the rest of us are dealing with “live” in-store customers?!
trent
Thanks John!
I read a recent study that said 90% find social ads irrelevant.
Therein lies a bit part of the problem.
Context is King! – might have stolen that one from Gary Vee 😉
Indeed, in Facebook’s last earnings call, Sandberg said their challenge was making ads seem like ‘content from a friend’.
I believe the biggest fault of this whole Social Commerce movement has been trying to bring commerce elements into the world of social. What we should be doing is bring social elements into the world of commerce.
Commerce can still work fine (infact will probably flourish) with elements of social. Social becomes anti-social if it’s flooded with commerce messages.
Word of Mouth is still #1 when it comes to marketing & promotion.
In today’s hyper-connected world, Word of Mouth is happening 24/7 on the social networks.
Finding a way for biz to generate meaningful word of mouth across the social networks might just be a winner.
What do you think?
Cheers!
Trent!
Gavin Hudson
Thanks for the thoughtful article. I will read Anita’s too. One quote struck me as the epitome of wrong thinking in the article: “No amount of Facebook Likes is going to sway a prospective customer to spend 5 to 40k on a pool plastering job.” Of course I won’t buy a plastering job solely because a company has lots of Facebook fans. It might increase my opinion of the company and mean that they are ready to respond quickly to my questions on Facebook, but it’s the content they offer (not only on Facebook) that will make me choose them. Lets assume I want a plastering job. I’ll do research about which companies are better. Plastering companies can give me useful information in blogs, show me humanizing pictures of their company or clients on Facebook or impressive pictures that relate to plastering. Appeal to me as somebody who appreciates (and is looking for) a good plastering job and wants do business with a good company. More likely, I’m one step above the “ready to buy” phase and I’m the target audience to consider a plastering job. Write blog posts about the benefits of plastering or the risks of not or 6 things I should know if I’m considering plastering. I’ll trust you as a source of information and want to know more from you.
Anita Campbell
Hi Gavin,
I agree with what you’re describing, because it treats social media as an element in a broader, multi-faceted marketing plan. Not as something to make a sale.
What bugs me is that people have a tendency to swing to one end of the pendulum or the other when it comes to social media. Either they’re hyping it as the latest thing since sliced bread, or calling it a “waste of time.” And the reality is closer to what the Harvard Business Review article discusses — that social media gives an assist. It’s more complicated than “you get a sale or you don’t” kind of thinking.
It’s the same sort of thing I’ve heard for years about display advertising. People claim “banner ads don’t work.” HELLO! I’ve built an entire business based largely on offering display advertising. People who make such black-and-white claims simply show themselves to be dreadfully uninformed.
– Anita
john Follis
Sometimes I think that the more things change, the more they stay the same. Bottom-line thinking CEO’s and CFO’s will always be asking for measurable ROI and “deliverables” and us marketing folk will always be trying to explain why you can’t always look at it that black and white. It often fosters and inherent distrust and a contenious relationship which explains why so many businesses burn through marketing “experts” and firms.
I go back to what I said in my piece. No one likes to be unclear about what they’re paying for, especially when ever dollar counts. It’s hard to spend hundreds, or thousands, on something you can’t show or clearly explain to your spouse. And while enlightened clients realize there’s no guarantee on ROI, they still like to be able to see what we’re paying for — to have a sense of the value. Which is why I started Big Idea Video.
Anita Campbell
Thanks, John. We appreciate your point of view!
Ron
I agree to the pendulum style hype, so many tools, so little time.
Ron
Enjoyed the article. I work with retailers in market populations of less than 10,000 and a number of your comments are quite familiar. My strategy has boiled down to have the retailers location/information correct in at least one of three search engines; Google, Yahoo or Bing and updating/responding to their Yelp or Foursquare posts. This has become my first tier social media marketing plan for small small businesses in rural areas. One community has engaged with the local 4-H club to take the photos and videos to post to search engine sites….pretty great opportunity.
Ocha
You have to realize that there is a good number of people who will see your efforts on social media sites but are not active in the discussions. That doesn’t mean they won’t come to your site directly and poke around and my even make a purchase. Sometimes, silence is golden.
SerryJW
I am in IM and have had online businesses. I lean to the BS. There is only so much time in a day for a small business owner. We all need a immediate ROI, that includes TIME. Most SBO don’t even have a USP. As a consumer, are you going to drive 25 miles for a good philly cheese sandwich?
I authored my opinion as follow:
Social Media is like kissing a bunch of frogs hoping to get laid!
Hi,
My feeling is that just because it’s sometimes “confusing” doesn’t mean that it can’t work.
Sometimes, ROI isn’t direct. Sometimes, the ROI happens in the future. Way into the future.
Social media marketing is super-important these days.
There’s so much noise out there. Social media marketing can help companies cut through it with smart, creative approaches.
Some of the people out there that say that “it doesn’t work,” are working with the wrong people.
The Franchise King®
john Follis
I made the same point: “Social Media experts will argue that it’s not working for 60% of small business owners because they’re not working with the right people…” The problem is, as with a car mechanic, it’s very hard to know who the right people are.
I have owned my small business for 40 years. What I am willing to pay for
is results that can be measured. “Advertising as an investment” like any other
investment I make. Like any other tool if I can’t prove that it works, it doesn’t
work. If your product has value please show it to me. Don’t wast both our time
trying to make a case that it works its just that you can’t prove it.
I am a real buyer of real results.
Anita Campbell
I am not a social media consultant and don’t sell social media services, so I have no ax to grind. In fact, as far as I’m concerned, the fewer competitors who figure out social media, the better. 🙂
I just know that some things are easy to quantify in dollars and cents, some are not. When I owned an art gallery, I couldn’t quantify the dollar value of a building sign or high-end lighting — but I knew we needed those things.
In my current business, publishing, I can’t quantify the value of spending money on an editor who edits for typos, punctuation and grammar, and who creates great titles. But I know those things make a difference in our traffic and revenues.
– Anita
Martin Lindeskog
Anita: I am curios to learn more about your fine art days. I have friends in California, owning a gallery (Quent Cordair). It is funny that you mention the building sign. Yesterday I went to a BNI meeting and one of the participants owned a sign business. His 10-minute presentation explained the importance of his knowledge in a context. It was a real eye-opener to learn about his special skills. Marketing should be taken in a context (“is Queen” – Gary Vaynerchuck) and that includes traditional media, social media, and an integrated business philosophy through the whole organization or if it is a solo entrepreneur, a mind and body integration.
I am so glad that Small Business Trends is on the “internets”… You are learning great stuff all the time and you could continue the conversation in many ways. This is SOCIAL in the true sense!
Steve Lawyer
Wow, how refreshing. Finally… the kool-aid is wearing off. Social media may have a place after exhausting every other possible marketing avenue on the planet. I take that back… probably won’t happen. At least social “marketing” gives spammers and unqualified college grads jobs.
john Follis
Ha. Thanks, Steve. Regarding your comment that SM may only have a place after exhausting every other marketing avenue, there’s one marketing avenue that seems to be benefiting from the confusion and frustration surrounding SM … Promotional web video.
Social Media Examiner reported that “76% of marketers plan to add video to their sites, making it a higher priority than Facebook, Twitter and blogs.” And that was reported over a year ago. I’m guessing the number is even higher now.
Martin Lindeskog
I don’t see the problem with social media, I see the opportunity! 😉 Last week we have the last study social media circle (Got a Mac user group, Gothenburg, Sweden) for the season and we looked at future trends and discussed how much social media has enriched our lives. My take on the so called problematization of social media by the mainstream media, is that they “honeymoon period” is over for new media.
Here is Gothenburg we now have a case in court called “Instagram case” with two teenagers that used Instagram for spreading rumors and “immodest” pictures. The whole thing turned into a mob frenzy with plenty of kids running around in the central of the city, destroying stuff and fighting. The mainstream media blamed the incidence on Instagram and had several articles on the bad things with social media.
First mainstream thought social media was a fad, then they got curious and wrote pieces about it and now they are creating stories on how bad it is. Next phase will be an acceptation of new media and it will be a natural way of conducting business. Many of the old media companies have invested plenty of money in new media ventures. They are afraid of the costly newspaper distribution supply chain and the decreased interest in reading only the paper version of the news.
For the record: I am a social media evangelist and I want to spread better ideas regarding business philosophy and new media. I have had presentations on the opportunities and threats with social media and could help organizations with figuring out their strengths and weaknesses then it comes to conversational marketing and ask the tough “why” question… 😉
Thanks, Martin. No question that there are many positives about social media. The web is over-flowing with them. I just thought it was time to point out some of the negatives.
Very interesting articles and comments… There are a lot of true points here, even if they seem contradictory.
But this is such an important topic to small business owners that I want to bring everything together:
John is right in that no one likes to be unclear about what they are paying for, particularly cash-strapped small business owners. He’s also right that social media is harder to measure, appreciate, and understand than many other “off-line” marketing tactics. This is part of a bigger a challenge for small business owners: they don’t know what to measure, how to measure it, or even what their overall goals with social media should be. This, in essence, is the real problem.
Keep in mind that big businesses are also failing in these areas, as well. It just hurts smaller companies more.
But, while social media may be harder to put a finger on, there are most certainly ways to measure the effectiveness of your campaigns. Many people use revenue per email subscriber and there is a whole assortment of robust analytics to keep track of user engagement. There are also very, very specific goals and conversion paths that business owners working under various business models can (and should) strive for in their social media campaigns. If your online marketing help can’t explain this to you in a clear, understandable, and measurable way, then move on to someone else. (I recently wrote a post on this topic to help small business owners find competent online marketing professionals: http://growingyourbiz.co/2013/05/hiring-help-for-your-online-marketing-6-signs-youre-wasting-your-money/ )
Like Anita pointed out, people tend to go to extremes when the topic of social media comes up. Mostly, it’s from people who just don’t “get it” or it’s from those looking to capitalize on the confusion.
To sum everything up: online marketing is an essential part of doing business today. But, successful campaigns are highly specific to the business itself. What’s missing for many business owners is that they just don’t get it, they don’t understand how it could apply to them, they don’t understand their customers’ online choices and behavior, and the idea of context is also lost. These are big, fundamental problems that need to be addressed for any real change to happen.
Thanks for sharing and enjoyed your article. Your comment that “For every competent online marketing expert and website developer there are about a hundred buffoons” is true, and it’s true with all marketing-related services. So, qualifying true professionals is the challenge. Hence my article: “5 Ways to Qualify Marketing Help” https://smallbiztrends.com/2012/03/5-ways-to-qualify-marketing-help