Small Businesses Use Facebook, Twitter for Promotion

Are you a small business owner using Facebook and Twitter to market your products and services? Forty-five percent of small companies with fewer than 100 employees said they use Facebook and Twitter to promote their businesses, Internet2Go analyst Greg Sterling found after conducting a survey of 2,400 small business owners. However, Sterling also said that while many businesses use Facebook and Twitter for marketing, they don't know how to measure how effective their promotions are on those social sites.

The high-tech world already knows that marketing and sales workers from large companies like Dell and PepsiCo are using Twitter to promote products. Their businesses may be strikingly different, but they are commonly linked by the viral, worldwide word of mouth Twitter affords them.

Few people, though, look at how small businesses are using public-facing social network tools such as Twitter and Facebook, whose Pages section enables individuals, organizations and businesses to promote themselves or their products.

Internet2Go analyst Greg Sterling recently conducted an online survey and found that 45 percent of 2,400 business respondents with fewer than 100 employees said they use Facebook and Twitter to promote their businesses. The survey targeted the most frequent content publishers who are members of local business social network MerchantCircle.

Sterling told eWEEK that while he expected some businesses to leverage Facebook and Twitter, the high percentage surprised him, showing a level of marketing sophistication for the companies that don't have a lot of money to spend for promotion.

"For these guys, costs was a big factor," Sterling said. "They either need to hire a dedicated person or need more resources and don't have it."

Indeed, 80 percent of the respondents had four or fewer employees, and 79 percent of those surveyed said their annual marketing budgets were less than $5,000. Forty-four percent of small businesses said they actually spend less than $1,000 on advertising and marketing.

Expensive online marketing plans is one of the factors that drove small companies to Facebook and Twitter, as 26 percent of the respondents said online marketing is too expensive for them. Another 16 percent said they don't have "enough time to do it well and still run a business." Again, Facebook and Twitter loomed large here because they are easy to set up and use.

Sterling also found that three-quarters of the businesses he spoke with go to local sites such as Yelp, Yahoo Local and CitySearch to see online reviews about their businesses. Most of these folks went to review Websites and conducted vanity searches on their business names.

What does all of this mean? The analyst said more small business owners will devise social media-driven campaigns as an alternative to more expensive or challenging promotional practices, such as the mature search engine marketing sector, which is intensely competitive and boasts a high barrier to entry.

"We are going to see more and more of this behavior from other small businesses because it's free and you don't have to have expertise to set up these pages," Sterling said.

Not all is roses, however. Sterling said that while many small businesses use Facebook and Twitter, they don't know how to measure how effective their promotions are on those social sites.

"How do you measure whether someone is coming to your Facebook page? A lot of people don't have anything in place to measure that," Sterling said.

Clearly, there is room for low-cost social media marketing measurement tools. One thing is certain: If Facebook and Twitter continue to build out their social functionality, they will make their Web services more attractive to business users.