Social Marketing Fails To Reach Small Businesses

There are some current trends that are currently most at odds and this interests Coffee Marketing.

1) Online advertising expenditure continues to increase unabated. In 2008 $23.45bn was spent online, an increase of 10.5% (IAB PwC Ad Spend report full year, 2008).

2) The increasing amount of discussion around and rate of “social media marketing” adoption amongst practitioners.

3)  The low adoption rate of social marketing among SMEs.

Ok, so which is the odd one out?

A,  3) It’s the only options that doesn’t show significant growth

Some research into SMEs adoption of social marketing (, July 2009) found that 20 per cent of respondents regularly updated blog and 37 per cent actively managed their reputation online.  In contrast 91 per cent of respondents believe that brand perception online is important, with 66 per cent agreeing that tools like; Twitter and Facebook are effective at engaging potential customers.

Adoption rate amongst SME’s remains low for a variety of reasons, but I believe the primary suspects are;

1.  They are too busy running their daily business to be thinking of the ‘next generation of marketing’ and its benefits.

2.  Their regular spend in the Yellow Pages or local directory is safe and they are able to predict the return on investment accurately enough to avoid over spending too much. Why fix what ‘aint broke?

3.  The time social marketing practitioners (including SEM and SEO) quote to “achieve the right result” is often prohibitively long-term to get involved with.  I can’t spend money and hope it pays off in months and months time.

This discrepancy between believing in social media marketing’s value and adoption, shows that the barriers to entry for SMEs to get involved in social marketing are high.  This is quite a problem if social marketing can deliver what many people suggest, as it will leave SMEs behind.  Behind not simply in terms of understanding the concept and “how to do social marketing”, but in terms of the learning curve.

In 2004 I worked on a campaign for Proctor and Gamble, integrating one of their FemCare brands into a top teenage Virtual World.  This was an industry first for such a large company.  At the time the P& G philosophy was all about trying new media with a large focus on measurement vs expectation.  Now their “Being girl” community is producing 4 times the ROI that traditional advertising achieves.

The obvious problem here is that SMEs are often stuck in a chicken or egg situation with marketing budgets.  “Do I spend money to try and make more money and risk it, or wait for revenue to be able to invest” (which is less likely due to lack of investment).  In turn this means they are far slower at picking up the gains that social marketing can deliver, as P&G did.

This in turn concerns me as I think this will increase the distance between the performance of largest and smallest businesses.  The largest companies with greatest profit are able to learn how a social marketing approach can increase their profit margin and ROI, where-as SMEs don’t have the resource, both human and financial.

The one trend that might mitigate this is the increase of the performance payment model e.g. cost per click or cost per lead for example, as Coffee Marketing have done with our Cost per Lead product..  Hopefully this will throw SMEs a life line in today’s climate.

All I know is that marketers should be helping out the SMEs, as this will open the market up to the next 80% of the British industry and increase overall online marketing industry spend.  It will also provide SMEs the chance to capitalise on the Internet as a good business opportunity that will ensure they remain competitive online.

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