Merchants Investing in Social Media to Lower Marketing Costs

Research companies continue to publish their findings on the social media explosion. Because that marketing channel is so new, it's unusual to discover a study with a 3‑year trend. The Social Media Examiner recently published its annual report for the 3rd year in a row and the data in the report shows where marketers of all sizes are headed with social media, what questions they have and where they are making cuts in traditional advertising as a result of  their investment in outlets such as Facebook.

One key trend uncovered in the 2011 Social Media Marketing Industry report is that less than half of marketers have been using social media for at least a year. This is because so many marketers have been jumping into the media format, perhaps worrying that they’ll be left behind. In addition, the amount of time a company spends on social media weekly seems to correlate to the length of time staffers have been using the format. Currently, 58% of merchants commit about 6 hours a week to social media. After typical companies use social media for 3 years, over 63% spend 10 hours a week on this activity.  Not surprisingly, younger business owners, between the ages of 20–29, spend the most time on social media – 41% spend at least 11 hours a week on this format.

Here’s what businesses say they are getting in return:

  • Increased business exposure: 88%
  • Increased traffic/​subscribers 72%
  • Improved search rankings 62%
  • New business partnerships: 56%
  • More qualified leads 51%
  • Reduced marketing expenses 49%
  • Improved sales 43%

In this survey, Facebook continued to reign as the most popular platform with a 92% use rate. Both Twitter (84%) and LinkedIn (71%) lost market share between 2010 and 2011.  Smaller businesses noted a preference for LinkedIn while larger businesses have gravitated toward YouTube likely because it’s an easy way to post previously produced TV ads.

It may come as no surprise that the top unanswered social media question for most marketers relates to measuring ROI. But that’s not the only concern. Marketers currently feel scattered as they allocate resources to manage all of their social media accounts and wonder if there’s a better way to integrate these activities.

Nearly 60% of  self-​employed and small business owners say that they made cuts to their marketing budgets once they started using social media.  In tomorrow’s post, I’ll present the rest of the survey findings as they relate to which media formats businesses plan to cut and by how much.

[Source: Stelzner, Michael. 2011 Social Media Marketing Industry report. Social Media Examiner. 2011. Web. 20 Apr. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.