If consumers are spending more time online and the bottom line of small businesses keeps getting squeezed, many owners are drawing the same conclusion: Marketing via social media makes sense. The findings of the Small Business Success Index™ (SBSI), jointly carried out by Network Solutions® and the Center for Excellence in Service at the University of Maryland’s Smith School of Business indicate that the rate of social media use in the small business arena doubled between 2008 and 2009. Currently, nearly 1 in 4 small businesses uses social media.

Here are specific study findings associated with small businesses that currently use social media:

  • Maintain a company page on a social networking site: 75%
  • Social media is used to identify and attract new customers: 61%
  • Maintain a network through a site like LinkedIn 67%
  • Monitor feedback about the business 54%
  • Expect social media to be profitable in the next year 45%

Early participants in social media are achieving near celebrity status in some professions. For example, survey participant Dr. Alan Glazier, CEO and Founder, Shady Grove Eye and Vision Care says, “I am now recognized as a thought leader in social networking within my profession and lastly but most importantly, my marketing budget has been reduced by more than 80%.”

As more small businesses turn to social media in the next year, they may encounter some of the negative aspects of this new form of marketing. Here’s what the survey participants outlined as the drawbacks of social media:

  • Takes more time than expected 50%
  • Allows people to criticize their business 17%
  • Negative comments have hurt, not helped their business 6%

Despite the negative aspects of social media, more small businesses are expected to begin using tools like Facebook and LinkedIn because this form of marketing requires a minimal cash outlay during a time of continued financial duress.

[Source: Social Media Adoption by U.S. Small Businesses Doubles since 2009, Robert H. Smith School of Business, University of Maryland, 2.16.10]