The limitation of Social Media Marketing for small business: is it worth or worthless?
Believe it or not, I was a content writer. Back in the lovely, beautiful, COVID-free days in Melbourne, I was still an 18-year-old young, ambitious and curious girl who was in her first year of college, looking for an internship where I could explore the dynamic world of business. I was lucky enough to be accepted in a small SME, where I was a Marketing & Information Systems intern. Given the responsibility to plan, create the content pillar for the business social media channels, along with managing and analyzing the analytics of these platforms, I must say I had pretty deep insights into how they benefit the company. And that, was when I realized the sad reality of social media marketing for these small businesses.
The overall situation
Most businesses have high hopes in their social media platforms. People are not only using social media to express their personalities and sharing hobbies anymore, they are actually making money out of it. There are more than 3.5 billion active social media users globally, which is around 51% of the world's population and 83.36% of internet users. Needless to say, if a social media marketing campaign is done right, how many people it can reach?
And that is why companies around the world, regardless of big or small, are using social media marketing as a form of promoting their business. Statistically speaking, more than 50 million small businesses are using Facebook to connect with their customers. From the biggest names like Shopee to my best friends' brand new restaurant, it feels like almost every business is utilizing the social media marketing strategy. Research from Asset Digital Communication pointed out that 71% of small-to-medium-sized businesses are using the method the market themselves, and 52% of them post daily. The numbers speak for themselves on how seriously SMBs take social media marketing.
The question is, is it REALLY effective?
Recently, I went through this one blog from Jackie Owen, where he mentioned a concept called "Social Business Loop", and I must say I wholeheartedly agree with it. It is the problem where businesses, especially small ones, "rely too heavily on social media to promote their company, while ended up generating little to no leads by attracting non-target audiences". And this, is what I also call the limitations to social media marketing for SMBs.
The limitations
Social media marketing might do you good, but social media marketing might also bring you nothing. Here are the reasons why I think the strategy might just be an overhype.
1. It barely generates ROI
Let's be frank, at the end of the day, all business cares about is money, money, money. And unfortunately, social media marketing is the lowest strategy to bring ROI according to researches. For a small, early-stage company, they barely have any reputation or a firm position in the market. That is what they seek to gain from social media: to develop their brand awareness and gain a certain number of loyal followers. However, reality strikes differently. For a business to draw users' attention and engagement, it must put constant time, attention, and effort into its social presence. This means it must post and engage with the followers on a daily, regular basis for them to not leave. Even so, if they are not related or interested in the content, they will not stay either. Firms need to be aware of the targeted users that may convert to leads, then focus on them and them only. But to do this as a brand new, obscure business, it is extremely time-consuming to create this kind of audience.
Unless a business has already established its own name, the chase of followers is going to be an endless process. And probably that is why only 48% of marketers agree that social media gives them any ROI.
2. It is time-consuming
When I was managing the social media channels, I was circled around creating content, posting, engage with customers, analyze the numbers, then back to creating content. Although it may sound simple, it is an endless loop that involves so many questions and issues to be discussed before any action is conducted. The process really took a great deal of time, because I had to continuously learn and be consistent with every single post.
For a business to understand how it works best on social media, it has to implement. Not once, but multiple times. And even then it must not stop to continue innovating to best attract targeted audience. Businesses may use free social media platforms like LinkedIn, Instagram, or Facebook and have great social media marketing tools to assist like Canva, AdsReport, or Loom, but they still need to invest in so much time, labor, and effort to figure out how things work. And time and labor are not free.
It is probably best to spend those resources to find a more effective way to generate leads. Or better, a more effective marketing method.
3. Heavily depends on paid promotion - but the business will not pay!
As hard as it may to accept, organic reach is dying. According to Hootsuite, Facebook's organic reach is on the decline by the end of 2020, with the average reach down to 5.2%, compared to 5.5% in 2019 and 7.7% in 2018. The engagement rate dropped to 0.08% for those with less than 100K followers, which is the majority of small businesses. For Instagram, the percentage fell down to 1.60% from 1.9% just within a year. Sure, businesses might argue that hashtags can help them draw potential customers, but I hardly believe a paid ad from a similar company will appear after your post does.
This means that yes, businesses need to pay. My old workplace did not pay. Most partners of that old place did not pay. My friend's business does not pay either. Yellow Social Media Report 2020 pointed out that only 37% of SMBs say they use paid advertisements for their social media, and only 6% of those use social media influencers. The report also showed that only 61% of SMBs said that the paid tactic was successful. So is the method really effective?
As a small business, all the expenses have to be carefully considered. Not all types of business will be suitable for paid advertisement, so unless the firm already has a strong financial base, I would say the method is not recommended.
The last few thoughts
Friendly reminder: Traditional Marketing is not dead
This is the last thought. From now on, stay safe.
Hang Nguyen
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