Small businesses, defined as companies with less than 100 employees, are seeing a few noteworthy trends (BIA/Kelsey survey for Q3 2014):
1. 74.5% of small businesses use social media to advertise or promote their businesses - this is up from 71.7% last year.
2. Small businesses spend, on average, 21.4% of their total media budgets on social media - this is up from 18.9% last year.
3. Print and outdoor spend is down to 18.5% from 20.9% last year.
As shown in the chart below, we have now reached a point where small businesses are spending the highest share of their budgets on social.
Facebook pages are most frequently used (55% usage), followed by LinkedIn ads (31% usage). Facebook ads and Tweets/Retweets on Twitter tied for third (20% usage).
What is interesting to note, however, is that less than 1/3 of these small businesses say that social is "Extraordinary" or "Excellent" in terms of ROI. The top 3 channels providing the best ROI were:
1.Online banner or display ads containing video (59.3% of respondents giving "Extraordinary" or "Excellent" rating)
2. Streaming audio advertising (57.7%)
3. Offers distributed on smartphones or tablets (54.0%)
Looking at conversion rates on social, another study by Convertro and AOL Platforms suggests that paid social ads have much higher conversion rates than organic content. This may tell us why small businesses are spending a larger portion of their budgets on social. However, this varies depending on the platform as you can see below:
1. 74.5% of small businesses use social media to advertise or promote their businesses - this is up from 71.7% last year.
2. Small businesses spend, on average, 21.4% of their total media budgets on social media - this is up from 18.9% last year.
3. Print and outdoor spend is down to 18.5% from 20.9% last year.
As shown in the chart below, we have now reached a point where small businesses are spending the highest share of their budgets on social.
Facebook pages are most frequently used (55% usage), followed by LinkedIn ads (31% usage). Facebook ads and Tweets/Retweets on Twitter tied for third (20% usage).
What is interesting to note, however, is that less than 1/3 of these small businesses say that social is "Extraordinary" or "Excellent" in terms of ROI. The top 3 channels providing the best ROI were:
1.Online banner or display ads containing video (59.3% of respondents giving "Extraordinary" or "Excellent" rating)
2. Streaming audio advertising (57.7%)
3. Offers distributed on smartphones or tablets (54.0%)
Looking at conversion rates on social, another study by Convertro and AOL Platforms suggests that paid social ads have much higher conversion rates than organic content. This may tell us why small businesses are spending a larger portion of their budgets on social. However, this varies depending on the platform as you can see below:
Sources: http://adage.com/article/digital/small-businesses-spend-social-media/294988/http://www.emarketer.com/Article/Paid-Social-Ads-Convert-More-Customers/1011188
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