The social media message is still yet to sink in with the majority of SMEs, with a survey from Council of Small Business of Australia and Optus showing 56% of small and medium businesses have no intention of using social media in their companies.
The survey, based on interviews with 340 SMEs, shows 28% of SMEs are currently using social media, with the accommodation and catering, marketing and media, and cultural and recreational services sectors among the biggest users.
Medium-sized businesses are more likely than small companies to have a social media strategy, while the vast majority of active users are investing 20% or less of their marketing budget into social media (the most common marketing budget is $10,000 or less).
Not surprisingly, Facebook, YouTube, Twitter and LinkedIn were ranked as the most popular social media sites.
However, the most surprising finding from the survey concerns the huge group of SMEs who are clearly not interested in pursuing social media marketing strategies.
While 52% of this group said social media was not appropriate for their industry, and a further 32% said it was not appropriate for their specific business, 25% said they believed there was “no clear way to build a business case for any investment we may make”.
A further 14% labelled social media a fad.
The report argues that some one of the big issues in this failure to make the business case is the problem of measuring the return on social media effectively.
While the social media “laggards” said more information about customer satisfaction measures, sales data or the quality of friends and family would make them more likely to become involved, current measurement methods appear to be quite crude.
Just over 60% of active social media users judged their return on investment through the numbers of friends or followers they had attracted, while 53% judged their success on customer service measurements and “repeat communication”.
Just over half said sales data was a key determinant of success, while one in 10 said they did not specifically measure their social media efforts.
Phil Offer, marketing director for Optus Small and Medium Business, said the survey shows just how immature the use of social media is among SMEs.
“Our research shows that many small to medium businesses are keen to embrace social media as a means to drive sales by reaching new prospects and engaging loyal customers but are holding back until they can justify the return on investment.”
“Social media is still perceived as the ‘digital wild west’ so many SMEs are still learning and experimenting to determine how social media can help them achieve measurable business benefits.”
While 16% of SMEs surveyed said they would become active on social media sites in the next 12 months, the survey also suggests enthusiasm for social media wanes over time.
For example, 77% of users who have been on social media for less than three years have posted a picture on a social media site, while just 44% of users who have been those have been on social media for more than three years have done the same.
“Newer users are typically more enthusiastic than those that have been involved for more than three years. This may reflect disillusionment with the results of social media activity, or an inability to dedicate the resources required to achieve long-term success,” the report says.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
