Are small businesses chugging social media Kool-Aid?

In my in-box last week: "Citibank Survey Reveals Small Businesses Not Joining Social Media Conversation."

In my in-box on Thursday morning: "Survey: Nearly Half of Small Businesses Surveyed Have Profiles on Facebook and Twitter."

Um, do these add up?

Let's take a look. The first survey, conducted by Citibank and research firm GFK Roper, surveyed 500 small-business executives in the U.S. and found that 76 percent say they don't think social networks are helpful for "generating business leads or for expanding their business," and 86 percent "say they have not used social-networking sites to get business advice or information."

Yet the second survey, commissioned by research group Internet2Go and small-business networking site MerchantCircle, polled 2,000 small businesses in the U.S. and found that 45 percent already operate Facebook pages and 46 percent have either a business or personal presence on Twitter.

"We've known anecdotally that small businesses are using social media sites like Facebook and Twitter but these numbers are surprising," Internet2Go senior analyst Greg Sterling said in a release. "The conventional wisdom is that (small businesses) are unsophisticated but they're adopting social media tools en masse it appears, because there are fewer barriers to entry than other forms of online marketing."

Meanwhile, the Citibank survey: "Our survey suggests that small business owners are still feeling their way into social media, particularly when it comes to using these tools to grow their businesses," executive vice president of Citi's small business group Maria Veltre said in a release. "While social media can provide additional channels to network and help grow a business, many small businesses may not have the manpower or the time required take advantage of them."

The two, both of which classify "small business" as a company with fewer than 100 employees, really seem to serve up fairly conflicting results. But let's look a little deeper. The Internet2Go study, affiliated with a company (MerchantCircle) with an obvious interest in small businesses and social media, only polled existing MerchantCircle members. That means that those small businesses have already made at least one big leap toward trying to become more social-media-savvy.

Internet2Go senior analyst Greg Sterling told CNET News that the decision to only poll existing MerchantCircle members was made because it's difficult and expensive to pin down small businesses to survey them. The social network has "a large population of SMB users," he said in an e-mail.

That said, he admits the survey's results aren't totally random as a result: "These results should not be automatically generalized to the entire (small business) population," a blog post by Sterling explains. "They're qualified by the following: the survey targeted the most frequent content-publishers among MerchantCircle's small-business members. However, we believe these respondents may be a leading indicator of where the market is heading."

So it's more than likely that the Citibank survey shows the scenario closer to the current reality. Fine print, you know, can say a lot.

This post was updated at 10:52 p.m. PT with comment from Internet2Go's Greg Sterling.

[mjconver]

Thank you so much for following up. I read both of those reports, and that second one had the stink of poor sampling methods. My experience with the 287 clients in my company's portfolio is only 5 have a twitter presence, and they're either very large, or in the Web business, so my fairly decent random sample just didn't fit.

Lies, damn lies, and statistics...

[girlfridaycda]

In my experience most polls regardless of who they are done by are flawed.

How do you determine how many people to poll in a world with millions of people?

Companies/People choose what statistics to use and the demographic of who is going to be polled. If you want to show proof of something or discount something-take a poll-you can have the results show what ever you want:)

[acereporter73]

Small businesses dive into social media when they see their clientele do the same. I see consumer-driven businesses readily giving it a shot while b-to-b companies guaging the appeal within their industries before joining in.

And some pose the question "how do you make money through social media?" and expect immediate ROI for ever tweet.

I think the companies that get it right see social media as another layer of relationship management rather than a point of sale.

[cvaldes1831]

You're right. Social media is basically marketing/PR and thus is hard to quantify in terms of solid metrics. If your clientele uses social media, why not look into using it to communicate with them.

Many of the local trendy restaurants (SF) have chefs who tweet. Why not? Many SF diners are using Yelp, OpenTable, foodie blogs, etc. to make decisions on where to eat.

[lovethegadget]

Drinking the social networking Kool Aid . . . who isn't these days. Speaking of Kool Aid - I've been drinking the Netgear WNDR3700 Router Kool Aid. it has made such a difference in my office. Now we can all spend our days on Facebook and Twitter with super fast results!!

[MCircleKevin]

Hi Caroline, definitely, very valid points. We do state in the release that the sample size surveyed comes from the most engaged merchants out of our network of 925,000. We only surveyed a subset of our top 5% most active members who use MerchantCircle to create blogs, coupons, and newsletters, amongst other criteria.

So, inherently, this sample size is already predisposed to adapting social media. Because many of our merchants don't previously have a website or web presence, we believe the survey of our most engaged merchants shows they are quickly learning the nuances of effectively using social media to market themselves. On average only 15% of our entire base uses social media -- we believe this survey of super active members are the vanguards of a new way of smb marketing.

[robbinblock]

I've been teaching small businesses in Seattle about how to strategically apply social media for about 3 years now. I also give Marketing 101 and Internet Business classes, so I get a pretty good cross-section at the micro end, from startups to companies with about 20 employees. The shift has been from very few people understanding what it is; some were on LinkedIn and Biznik. With all the hype recently, they're also familiar with the mainstream sites, like Facebook and Twitter, but they're confused by what they do and how it will benefit their businesses. For the more established who are a bit afraid of it, I work with a lawyer when we talk about SM's risks and rewards.

My experience is that with little understanding of business, and marketing in particular, these owners are always looking for a magic bullet of sorts. Before SM came along, SEO was the snake oil -- it's still perceived that getting to the top of search engines should be their most important marketing activity. At the end of the day, there are always new ways to communicate, and small business owners need to catch up or hire the right expertise to help them use them appropriately. SM isn't a magic bullet, but if used appropriately, just like PR, it can be effective. And just like PR, there are ways to measure that effectiveness, if not its precise ROI.