Study: 70% of small businesses don’t see social media ROI
A recent study by online small business service directory Manta determined that 70% of businesses don’t see social media ROI from their social presence (I included the cohort that said they got $100 or less as well because it’s such a minuscule amount).
So let’s lay it on the line: why are most small businesses not seeing return on their social media investment? Why are nearly all of them committed to the channel (to the tune of 25% of budget to digital and social media)?
Why are small businesses not seeing positive social media ROI?
One statistic from the study that stood out was the fact that 4% of all businesses used all employees for their social media presence. This probably explains why the most challenging network to manage by the respondents is Facebook. In my recent profile of Maersk Line’s social media presence, I pointed out that a high percentage of the people engaging each post were Maersk Line (or affiliated) employees. While Maersk Line is able to leverage their employees and employee networks to gain influence with weak tie connections and with popularity algorithms (like Facebook’s EdgeRank). Most businesses aren’t leveraging that organic resource.
The typical small business in this survey had one person responsible for social media and participated for five hours each week. And despite their lack of tangible success on these platforms, they were willing to continue to commit their resources to social. Why are businesses so committed to a platform that they admit makes them little, if any money?
What is social media ROI to small businesses?
“They’re not doing it right.” – every other comment or social note that I get nearly every time I write an article on social media ROI.
Rather than trying to answer serious questions with cliches and braggadocio (and duly acknowledging that any company not seeing social media ROI simply needs some consultation): what is it that compels businesses to repeat the same behavior expecting greater results?
Could it be lottery psychology? Could the promise of reaching one billion users obscure how difficult and costly it is to reach people on Facebook(both in time and budget)? Do businesses have an incorrect understanding of risk and reward?
Could it be web 1.0 / Field of Dreams mythology? Could the “if you build it, they will come” mentality be true for social media profiles? Are unrealistic expectations for social media ROI predicated on the belief that social media users are scouring the interwebs looking for deserving companies to Like and patronize?
Could it be that social media ROI isn’t the endgoal? Could it be that social care or the esteem of having social media profiles is more valuable to small businesses than social’s value as an acquisition tool? A lot of studies that ask about social media ROI are asking for KPIs (or are misunderstood to mean KPIs) – do you think this is the case for this study?
What do you think? I’m very curious to understand why small businesses aren’t achieving positive social media ROI, and why they continue to carry on if they are unsuccessful in that space? And in your response, remember that every time you use a cliche to explain social media marketing an angel loses its wings.