The evolution of social media as a marketing tool for entrepreneurs.
Geho, Patrick R. ; Dangelo, Jennifer
INTRODUCTION
Entrepreneurs face many daunting tasks in the operation of their
businesses, not the least of which is maximizing the marketing potential
of social media while at the same time being able to measure cost
benefits. According to the 2011 Q3 Nielsen State of the Media: The
Social Media Report (NMincite, 2011), "60 percent of people who use
three or more digital means of research for product purchases learned
about a specific brand or retailer from a social networking site"
(para. 1). This statistic, and a host of others, serves to prove that
tried and true social networking sites like Twitter, Facebook,
Foursquare, LinkedIn, and newcomers Google+ and Tumblr are here to stay.
Furthermore, they are influencing the way consumers buy products and
services. To encourage business owners, large and small alike, to use
social media as a marketing platform, several social media companies
have developed business-specific tools or made it possible to brand an
online profile to a business.
The number one deterrent of social media for small business has
always been the time commitment required to keep profiles active and the
almost impossible task of calculating the return on investment (ROI).
Advances in the social media scene like Hootsuite, a social media
dashboard and scheduler, allows scheduling and posting content to all
online profiles simultaneously. Facebook Pages Insights, which allows
tracking the number of visitors to a Facebook Business Page, helps close
the gap between big brand experts (i.e., Coke and Apple) and average mom
and pop businesses at leveraging social media.
INTERNET GROWTH AND CURRENT SMALL BUSINESS SOCIAL MEDIA LANDSCAPE
In 1995 statistics indicated 0.4% of the world population used the
Internet. The latest figures show that number has grown to 32.7% or some
2.2 billion users (Internet World Stats, 2012). With this incredibly
fast evolution of the Internet and social media, it is evident from
everyday media that big businesses are making use of every social media
outlet available today; but are small businesses doing the same? An
industry study in 2011 published in the Social Media Examiner surveyed
3,342 marketers, and just under half of those were self-employed or
small business owners (Stelzner, 2011). The results of that survey are
summarized below:
* Overall, 90% of the marketers surveyed agreed with the statement
"Is social media important to your business?" and 66% of small
business owners strongly agreed with the statement.
* 80% of marketers indicated social media use generated more
exposure for their business.
* An increase in search engine rankings was seen by almost
two-thirds of marketers.
* Spending as little as six hours weekly generated leads for 52% of
marketers, with small business owners more likely to strongly agree to
the lead generation question.
* 59% of small business owners saw a reduction in marketing costs
when social media were implemented.
* Facebook, Twitter, LinkedIn, and blogs dominated usage stats,
with 92%, 84%, 71%, and 68% respectively, with 78% of small business
owners indicating they were more likely to use LinkedIn.
APPROACHES USED TO DEFINE AND MEASURE SOCIAL MEDIA ROI
While some social media strategies, such as offering Facebook- or
Twitter-specific deals and coupons, can be directly traced to a
traditional form of ROI like generating a sale, it is important to note
that other facets of social media interaction also constitute ROI and
can be important indicators of the health of a social media campaign. As
Gangemi (2011) of Fox Business says:
It's no secret that for marketers--particularly small business
marketers-- that social media is now the price of admission to reach a
mass audience. Not to mention its impact is more measurable than just
about any other marketing technique: The number of re-tweets, clicks and
mentions that content receives online are the new ways to measure
success (para. 5).
Social media marketing campaigns can be tracked more efficiently
today, but what methods should the entrepreneur use and how is one to
decipher all that data? Traditional business ROI calculations are based
upon the benefit or return of an investment divided by the cost of the
investment (including employee time). It is not that straight forward
when calculating ROI from a social media marketing campaign. A more
sophisticated approach is needed. One approach when measuring ROI is to
consider the difference between social media and social networks.
Determining precise numbers for the ROI from social media is difficult,
yet social networking's ROI is a bit more obvious (Hartshorn, 2010;
Hoffman & Fodor, 2010; Wilfong, 2010). Calculating social networking
ROI is more difficult because it requires a new set of measurements that
begins with tracking the customers' investments, not the
company's.
Handling the measurements this way makes much more sense. It takes
into account not only short-term goals such as increasing sales in the
next month via a social media marketing campaign or reducing costs next
quarter due to more responsive online support forums, but also the
long-term returns of significant corporate investment in social media
(Hoffman & Fodor, 2010, para. 4).
So are social media marketers approaching the issue the wrong way?
Should they abandon the traditional method used to measure ROI?
Social media is hard work and it takes time in which you can't
automate individual conversations; whereas, social networking is direct
communication between the user and the people that he chooses to connect
with. Despite the fact that in social networking people can write blogs
or discuss anything, social media does not allow users to manipulate
comments, correct errors or other data for personal or business benefit
(Edosomwan, Prakasan, Kouame, Watson & Seymour, 2011, para. 22).
Once the focus of ROI with regard to social media has been
broadened, small business owners can begin to consider the "Impact
of Relationships" (IOR). This approach focuses on analyzing the
social media interactions between a business and its fans/followers and
then determining how that relationship can be cultivated and if it is
worth cultivating (Leggio, 2008).
Instead of emphasizing their own marketing investments and
calculating the returns in terms of customer response, managers should
begin by considering consumer motivations to use social media and then
measure the social media investments customers make as they engage with
the marketers' brands (Hoffman & Fodor, 2010, para. 3).
TOP SOCIAL MEDIA OUTLETS OVERVIEW
Although various social media lend themselves to marketing, some
have become more popular than others. Facebook Business Pages, Facebook
Insights, and Twitter are three receiving widespread use today.
Facebook Business Pages
Facebook Business Pages allows businesses to create a profile
separate from the owner's profile, giving "fans" of the
business a legitimate place to interact without having to see the
owner's personal Facebook posts. Pages work much like the rest of
Facebook; that is, users "like" business pages and then
everything that the business posts vies for a spot in the user's
News Feed. Facebook Pages can be a powerful marketing tool when
leveraged correctly. Pages are much more likely to show up higher in
organic listings on search engines simply due to the large number of
daily visitors to Facebook. Pages can also help boost a business's
website because linkbacks from a business's Facebook Page or
Twitter profile are a part of both Google and Bing's algorithm for
search results (Fishkin, 2010). This translates to a way small
businesses can break into the search market without paying for expensive
search engine optimization (SEO) services.
With the addition of tabs and iframes apps, Facebook Business Page
users can now create an entire website within Facebook. This can be a
cost-effective way to put their business on the virtual "map."
Facebook finished 2011 with an impressive round of stats, boasting a
total number of active users at over 800 million and reaching the status
of being the most visited website in the United States (NMincite, 2011).
For the small business world, that provides opportunities for at least a
few thousand potential customers, just in the immediate business locale.
Thus, not being listed on Facebook Pages is something small businesses
can no longer afford.
Facebook Insights
Calculating ROI on a Facebook Business Page became easier with the
addition of Pages Insights, an analytics type report that Pages users
could view at any time to see a snapshot of how their page was doing.
"By understanding and analyzing trends within user growth and
demographics, consumption of content and creation of content, Page
owners and Platform developers are better equipped to improve their
business with Facebook" (About Facebook Insights, 2012). With the
update to Insights in late 2011, users can now track measurements by the
unique visitors to the page, which is much more accurate than simply
measuring how many times a page was visited. Insights measure content
viewed (reach), posts clicked (engaged users), content being
"talked about," and total "likes" for the page. It
also reports on how many friends your page's fans have. All of
these measurements give businesses an idea how many potential customers
they have available to them on Facebook (Hamid, 2011).
Twitter
Telling potential customers about the business and explaining to
them why they should care using only 140 or fewer characters can be
problematic. However, this is the challenge that businesses on Twitter
face and try to perfect each time they post. The
"micro-blogging" phenomenon that is Twitter has grown by leaps
and bounds since its creation. In 2009 Quantcast.com (a statistics
website) reported an average of 23.5 million monthly users on Twitter.
Today, that same website reports 87.4 million monthly users.
Nevertheless, simply being on Twitter is not enough for today's
entrepreneurs. They must be seen amid the thousands of hourly tweets by
celebrities, comedians, and random users, which accounts for 40% of all
Twitter traffic being "pointless babble" (Kelly, 2009).
To stand out, business users must become proficient in the language
of Twitter and learn to utilize hashtags, retweets, and mentions to
expand the reach of their brand. It is much more than being able to
measure the ROI; it is about entrepreneurs building relationships with
customers who use Twitter. This is a time-consuming task. Empirical
research conducted in 2009 indicated the time commitment to Twitter was
not viable for small businesses at that time. Use of social media
provides opportunities for entrepreneurs but also presents unique
challenges for small business marketing.
When small business owners start a Twitter account, they have a
responsibility to monitor it and develop a solid following and do so
without the human capital, infrastructure and financial capacity
available to large companies engaged in a social media marketing
campaign. An inactive Twitter account with dwindling followers and
unanswered customer messages would obviously be contrary to a
business's social media marketing objectives and one reason why
small business owners are not embracing Twitter as a marketing tool
(Geho, Smith, & Lewis, 2010, para. 41).
However, since this research finding, programs have been developed
to monitor Twitter. In addition, the rise of mobile applications and
smartphone users has changed the landscape of how people access Twitter,
which reduces the time commitment for entrepreneurs leveraging Twitter
as a marketing tool.
With 63% of Twitter users accessing social networks via mobile
phone, tweets are now seen more in real-time as opposed to being looked
at hours after they are posted. This means that entrepreneurs can still
be competitive without needing to post every five minutes for fear of
being lost in a barrage of tweets. Applications like Tweetdeck and
Hootsuite, which give a "dashboard" view of the user's
Twitter account, help small business owners easily identify and sort
tweets, retweets, mentions, and direct messages, cutting down on the
time commitment. Websites like Hashtags.org give users the ability to
search keywords related to their business and gain valuable information
about when those topics are "trending" and how popular they
are, which helps users determine when tweets with certain hashtags can
have the most impact.
BRINGING IT ALL TOGETHER
The number one rule of social media is: Stay active. For small
business owners, devoting the time and effort to post on their social
media outlets every Tuesday and Thursday at 9:00 a.m. is not reasonable.
This issue has proven to be more than most small business owners can
overcome; and as a result, many simply give up on their dreams of
leveraging social media to take their business to the next level. To
remedy this situation, Hootsuite was introduced in 2008.
Hootsuite is a social media dashboard and scheduler that allows
users to link their social media profiles to the program and manage
their entire social media suite from one easy to navigate program.
Hootsuite did not gain widespread popularity and emerge on the small
business scene until late 2010. Hootsuite has several tiers of service,
including one which can appeal to any size business--it is free. The
major programs the free tier of Hootsuite will post to are Facebook
(profiles and pages), Twitter, LinkedIn, Foursquare, Wordpress, Ping.fm,
MySpace, and Mixi. However, the free version does limit users to five
social networks. For each post scheduled the user can choose any or all
of the linked social networks to receive the post. The scheduler portion
of Hootsuite enables users to manage and minimize the time they spend
posting to their social media networks. It is far easier for most small
business owners to carve out two hours on a Sunday afternoon than to
remember to post to all of their social networks several times a week.
Hootsuite also offers built-in apps like Trendspotter, which can be
utilized to search keywords associated with a user's business or
industry and post relevant links straight to a user's social media
campaigns from within the apps. This minimizes the time users must spend
trolling the web for useful content to post.
Posting is only half of the social media equation. Monitoring the
networks is critical for any entrepreneur. The dashboard function of
Hootsuite provides another time-saver for businesses, and it serves two
main purposes. First, it allows users to see the entirety of social
media interactions in one place. Second, it gives users insights into
how often content is being mentioned and re-tweeted. This information is
crucial to small business owners for interacting with their customers
and beginning to see some ROI on their social media activity. Hootsuite
also offers simple reports that can be emailed to users on a scheduled
basis. These reports look similar to Google Analytics reports and give a
quick, easy review of the activity of the account.
CONCLUSION
When social media were first introduced to the small business
marketing scene, the learning curve and time needed for implementation
made it too cumbersome to be a viable marketing platform for most
entrepreneurs. Many entrepreneurs had difficulty equating social
marketing with ROI. More recently, social media have become the norm for
big and small businesses alike; and analytic tools and marketing
approaches better define ROI. As a result, entrepreneurs can no longer
afford not to be listed on mainstream social networking sites.
Fortunately, social media avenues have matured to the point that mom and
pop businesses can utilize them without having to hire someone to
dedicate to the cause. This growth in social media can be partly
attributed to the use of Twitter and other social outlets for consumers
to connect over popular media programs such as American Idol and major
sporting events such as the Super Bowl. During the 2012 Super Bowl,
Twitter broke a record with over 12,000 tweets per second after the
Giants' victory (Eadicicco, 2012).
Although tools have been developed to minimize time commitments and
learning curves, entrepreneurs should still proceed with caution when
implementing social media marketing campaigns. They must keep in mind
that social media are not a one-size-fits-all kind of marketing. An
outdated Twitter feed or stagnant Facebook page can be detrimental to
the overall marketing brand of a small business. Social media must still
be implemented with a content and marketing strategy that first and
foremost builds upon the existing brand of the company.
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Patrick R. Geho, Middle Tennessee State University
Jennifer Dangelo, Tennessee Technological University