Social Media, Mobile Marketing Use Rises Among Small Businesses

Facebook and mobile Websites are a growing focus of small businesses, though overall marketing spend remains flat year-over-year.

Small businesses are focusing more of their budgets on Websites and other Web properties, such as social networks and mobile optimized sites, according to research firm BIA/Kelsey’s Local Commerce Monitor, an ongoing tracking survey of small and midsize businesses (SMBs) conducted with research partner Ipsos. The report found SMBs spent, on average, $1,190 in these media and marketing areas during the previous 12 months, up from $876 in an earlier report conducted during the fourth quarter of 2011.

Local Commerce Monitor Wave 16 was conducted in August 2012 through an online survey of 600 SMBs, consisting of two samples of 300: LCM: Core (no minimum annual advertising and promotion spend) and LCM: Plus Spenders (minimum annual spend of $25,000). Social media, propelled by Facebook, appears to be rapidly evolving into a core medium for SMB advertising and promotion. Among LCM: Core respondents, 63 percent said they now use social media.

Small businesses are also turning more to mobile platforms and the advertising and promotion formats that ride on them. In the latest survey, 14.7 percent of respondents reported having a mobile Website, with another 22 percent saying they intend to add one within the next 12 months. That figure represents a healthy rise in the percentage of SMBs that reported having a mobile Website during the Q4 2011 survey (8.7 percent).

“While total annual spending on advertising and promotion remained flat at around $3,000 for the previous 12 months, SMBs are locating more of their marketing dollars to digital presence assets,” BIA/Kelsey Research Director Steve Marshall said in a statement. “From Web presence and mobile Websites to social media, small businesses are building deeper and broader engagement with customers across a range of digital presence platforms.”

In addition, more than half (55.3 percent) of the SMBs surveyed report they use (34 percent) or plan to use (21.3 percent) customer loyalty programs, defined as “offering discounts or special promotions to frequent customers.” However, 43.3 percent of respondents said they do not have and do not plan to employ customer loyalty programs. “Total spend on advertising and promotion is fairly stable, at about $3,000 annually. Spending intentions for the next 12 months are robust,” the report noted. “SMBs continue to diversify the media they use for advertising and promotion, now using 5.8 different media on average—a large increase.”

An August report from the SMB Group found that while the overall use of social media has risen year-over-year to 53 percent from 44 percent among small businesses (with 1 to 99 employees) and grown to 63 percent from 52 percent among midsize businesses (100 to 999 employees), the gap is widening among SMBs that are using social media in an informal, ad hoc manner and those taking a more planned, strategic approach.