Anti(Small Business)-Social Media?

In the past decade social media has become a way of life for many Americans and indeed many people from almost every nation around the world. The average American adolescent can't make it through a single day without checking or updating his/her MySpace (MyWaste), Twitter (Fritter - as in fritter your time away), or the grand-daddy of them all Facebook. To be honest with you I am one of those people who can't keep up with my friends, family or current events without the use of some form of social media. So we have established that there is a built-in market just waiting to be snapped up by companies within the realm of social media. However, how much value does social media really add to businesses and contribute to what we really care about around here - PROFIT?

According to a Wall Street Journal article by Sarah E. Needleman in May of this year, social media has not been all that it is cracked up to be to the companies most tempted to utilize its seemingly never-ending potential - small businesses. Small businesses see social media as a way to compete with the grandiose marketing campaigns of larger companies. Facebook or Twitter provide a much cheaper and convenient marketing avenue for small businesses which can reach a mass market with a simple post on its Facebook page or an update by "tweeting". This is evidenced by the increase from 12% to 24% in the use of social media by companies with less than 100 employees according to a survey of 2000 U.S. companies in 2009. (University of Maryland's Smith School of Business and Network Solutions LLC, a Web-services provider in Herndon, Va.)

This significant adoption rate is however soured by the relatively poor results from another survey conducted with 500 U.S. small businesses from the same sponsors as the previous survey. According to the survey "just 22% made a profit last year from promoting their firms on social media, while 53% said they broke even. What's more, 19% said they actually lost money due to their social-media initiatives." This is staggering news to many I am sure. "The hype right now exceeds the reality," says Larry Chiagouris, professor of marketing at Pace University's Lubin School of Business. Mr. Chiagouris goes on to explain that social media "could harm you if you end up inadvertently saying something stupid, offensive or even grammatically incorrect."

The reality is as it was in the past and as it will always be in the future - without a great product, positioned in the right place, sold at the right price, and promoted in the right way, businesses will not succeed in its marketing function. Though many small businesses have benefited greatly from its use, social media has also consumed the time and effort of many others that were not as fortunate. As a result the use of social media cannot be and is not the be-all and end-all for small businesses wishing to break into a market or an industry. It needs to be incorporated with traditional marketing techniques in order to create value and ultimately add PROFIT!

But who am I kidding? Come on! You know about this.

Source: Sarah E. Needleman, Wall Street Journal, May 15th, 2010
http://online.wsj.com/article/SB10001424052748703909804575123691040422082.html