Smaller Businesses See Big Returns From Social Media
A new study from LinkedIn reports a strong correlation between smaller businesses that are increasing social media spending in areas such as content marketing and lead generation and those achieving what it calls 'hyper growth.'
Thu, February 13, 2014
CIO — Small- and midsized businesses (SMBs) are routinely lauded for their big contribution to the U.S. economy. Now that social media has gained favor among these companies, their marketing efforts are adding social elements with increasing regularity and efficiency.
A new study commissioned by LinkedIn reports that 81 percent of SMBs are currently using social media to drive business growth and 94 percent are meeting marketing objectives through social media.
Nearly half of respondents say they use social networking to learn and glean insights about their industry. The study surveyed 998 SMBs in the United States and Canada and was conducted by market research firm TNS on behalf of LinkedIn.
Getting Social Brings New Business
Almost three out of every five SMBs surveyed say social media helps their business gain new customers. Collectively, these companies with revenues between $1 million and $50 million accounted for a 10.7 percent year-over-year increase in marketing budgets last year, according to local advertising research and consulting firm Borrell Associates. LinkedIn's "Priming the Economic Engine" study also highlights a strong correlation between SMBs that have increased social media spending and those that achieved "hyper growth."
Hyper-growth companies with significant year-over-year increases in revenue -- one in six of the companies surveyed -- are among the most active in social media marketing. Of those in hyper-growth mode, 73 percent reported an increase in social media spending. Branding, word-of-mouth, content marketing and lead generation were each widely identified as the most effective use cases for social marketing.
"Through the study, we found that SMBs that are in growth mode rely heavily on social media for multiple activities in their value chain, including finding and researching financial service providers," Jennifer Grazel, category head for financial services at LinkedIn, noted in a blog post.
[Related: 5 New LinkedIn Tips for Power Users]
"Given their willingness to market their businesses and seek knowledge within social networks, financial marketers with an eye on SMBs should invest time and resources meeting them where they are. Hearing or reading about a financial services product or service on social media is likely to trigger SMB decision-makers to take further action, whether that means educating themselves, engaging in discussion or purchasing a product," Grazel says.