INTRODUCTION KEY LESSON FOR 2016 IT S ALL ABOUT TIME SURVEY DETAILS

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1 INTRODUCTION In recent years, Internet marketing has replaced most other marketing efforts for businesses of all sizes. A wealth of research has emerged studying the use of digital marketing by large companies. However, as we looked into various studies, we found a lack of research on how it is used by small businesses. We decided to fill that void by conducting our own research. Starting in 2010, we ve run an annual survey of small businesses. In that time we ve seen dramatic shifts in how businesses incorporate Internet tools into their marketing, with an explosion of social platforms, a resurgence of marketing and the birth of inbound marketing. KEY LESSON FOR 2016 IT S ALL ABOUT TIME One of biggest changes this year was the impact of time. Less than 24% of the respondents indicated they spend an hour or more daily on social media. This reluctance to spend time seems to influence their preferred platforms, and we saw a dramatic shift away from time consuming Twitter to Facebook and LinkedIn which can be managed in just a few minutes a day. SURVEY DETAILS This study was conducted online from December 1 December 15, 2015 with small business representatives self-reporting answers. Links to the survey were shared via various social media outlets, as well as via and publicized on the Roundpeg business site at This year we received 244 responses from owners and managers of small businesses, which we define as a company with less than 100 Full-Time Employees (FTE). After you have read the study, share your questions or comments on our blog. We would love to know your thoughts, and how you think you compare to fellow small business owners. Copyright Roundpeg 2016 All Rights Reserved 1

2 REPORT CONTENTS Introduction... 1 Key lesson for 2016 It s all about time... 1 Survey Details... 1 It s All About Time... 3 Time Spent Declining... 3 Where is time Spent?... 4 What are Businesses Doing Online?... 5 General Marketing... 5 Measurable Marketing... 5 Research... 6 Operations: Engagement, Recruitment and Customer Service... 6 Advertising... 8 Where are they advertising... 8 What type of ads?... 8 Blogs and Blogs... 9 Newsletters Content Creation Business Owner or Key Manager in Charge Who Else is Involved? Return on Investment (ROI) What do you measure What they say VS what they do Conclusion Copyright Roundpeg 2016 All Rights Reserved 2

3 IT S ALL ABOUT TIME There is a popular misconception that social media is free marketing. It isn t. Social media takes time. How much time does it really take to manage an effective social media marketing program? Most experts agree one hour a day is more than adequate to create an impact with social media. In this year s study almost ½ of the respondents indicated they are spending less than 30 minutes a day. TIME SPENT DECLINING Since we began the study in 2010 we have seen the amount of time individuals are spending on social media decline almost every year. In 2010, 35% of the respondents in our survey said they were spending an hour or more each day interacting on social media. By 2013 only about 30% were spending that much time. This year only 24% of the survey pool admitted to investing an hour or more. The biggest decline is actually coming on the top end as the number of people willing to spend more than 2 hours a day fell to 7% of the total this year. WHY THE DECLINE? When we ask small business owners why they aren t more active on social media, they often tell us it is because they don t have the time. For small businesses, time is a precious commodity and this year they seemed less willing to spend the time than in years past. In general, we ve seen small business owners settling into a routine with their social media. They have moved past the feeling they need to be on every single platform. Instead, they are concentrating their efforts on fewer, more relevant platforms. At the same time, we have seen an explosion of productivity tools which allow savvy business owners to do more with less time invested. Copyright Roundpeg 2016 All Rights Reserved 3

4 FEELS LIKE MORE They may be spending less time using social media, but it feels like more. Almost half the respondents felt they were spending more time than a year ago. What makes them feel this way? Perhaps it is because the novelty of social media has worn off, and using it has become another facet of the job, making it seem more like work. WHERE IS TIME SPENT? When we conducted our first study in 2010, we simply asked if people had social media profiles on the most common networks, LinkedIn, Facebook, Twitter and Plaxo. Over the next few years we saw networks come and go. As they did, businesses raced to set up profiles on every emerging platform just to grab the name. After a short burst of activity, all but a few of the platforms were abandoned. We realized simply asking if a company had a profile was not a strong enough indication of their business activity. So starting in 2012, we modified the question to ask which network was their primary business account. LinkedIn, once the primary business network declined significantly in 2013 and has remained fairly constant after that. In contrast, Facebook has risen to within a point of LinkedIn. The new Facebook business manager tools clearly have many small business owners spending more time on that platform. Google+ now represents 4% of the total. Many business owners are beginning to see the SEO value of the G+ platform, but they are still not jumping in and trying to engage on this platform as their primary network. (Other) - As businesses become more sophisticated in their online practices, we are seeing a little fragmentation as niche sites like Houzz, Instagram, Pinterest and YouTube are grabbing 1 2% of the total. The biggest surprise was the dramatic decline of Twitter this year. While it has been falling since 2012 this is the first year it has fallen below 10%. Why? Twitter requires significantly more time than either Facebook or LinkedIn, with a lesser return for small businesses. As business owners look to manage their time, it is obvious they are giving up on this platform. Copyright Roundpeg 2016 All Rights Reserved 4

5 WHAT ARE BUSINESSES DOING ONLINE? So what are business owners doing with their time online? What do they hope to accomplish with the time invested? We divided the activities into four broad categories: General Marketing, Measurable Marketing, Operations and Research. GENERAL MARKETING Since we began studying social media marketing in 2010, this category which includes activities such as product launches, building professional networks, showcasing expertise and generally building brand awareness has been the primary category. The vast majority of respondents say they use social media to build brand awareness (73%). This has continues to be listed as the primary activity since we started conducting this study in Along with building a professional network (63%), which for many business owners simply means adding more fans and followers, these two nonmeasurable activities require very little strategy or planning. A little bit more thought needs to go into using social media to showcase expertise/portfolio or use the tools to launch new products. This may contribute to fewer respondents, just under half list this among their online objectives. Unfortunately, it is hard to measure the impact of these very general activities so business owners get caught in a lose lose situation. They invest time in something they can t directly measure and are then frustrated when they don t see results. MEASURABLE MARKETING In this category, we compared the level of focus around activities which could be measured including driving traffic to the website, lead generation and contests and promotions. Much like in the previous category, business owners seem to shy away from the more active choices. 48% expect to drive traffic and 43% expect to drive leads. In contrast only 16% of respondents are running contests and promotions. Copyright Roundpeg 2016 All Rights Reserved 5

6 Just as time on social media seems to be falling so does the amount of attention these measureable marketing activities are receiving. As you compare the responses in 2012 through this year, you see significant declines for all three actions. RESEARCH The internet was originally created to make it easier for scientists and researchers to share data. So are small business owners taking advantage of the tools? Not as much as they should. This category includes a broad range of activities including: Finding news, resources and tools, discovering industry trends, tracking competitive activity and conducting market research. As we have seen in other categories, the most passive activity, looking for news (40%), is the most common response. When you consider how open and accessible companies are online, it is surprising to discover only about ¼ of the respondents said they used social media to track their competitors or conduct research. With so many affordable web based survey and poll tools this is an opportunity small business owners are missing to gather information and take a pulse of the market. OPERATIONS: ENGAGEMENT, RECRUITMENT AND CUSTOMER SERVICE Social media is more than a marketing tool. It can actually be an integral part of your business operations, supporting customer retention, recruiting and customer service activities. As we look at this year s data it doesn t seem as if small businesses are really taking advantage of the tool. Copyright Roundpeg 2016 All Rights Reserved 6

7 ENGAGEMENT About 3/4 of the companies in the survey (73%) use social media and content marketing to stay in touch with clients. This number has remained fairly stable over the last few years. This correlates with the focus on the more passive uses of social media we see in the previous categories. RECRUITMENT Finding qualified employees is always a challenge for companies of any size so we continue to be surprised by how few small businesses take advantage of the opportunities to connect and learn about prospective employees or share job listings socially. Even more surprising is the fact that this percentage has declined from a high of 29% in 2013 to 23% this year. CUSTOMER SERVICE The drop in recruitment pales in comparison with what has happened with regards to customer service. While more than half of our survey respondents in 2013 were willing to use social media to respond to and resolve customer service issues only 10% included that in their responses this year. Why the Decline Social media has given customers a way to ask for help but it seems small businesses are not willing to take on the challenges which come with a public response policy. In conversations with business owners, they often express fear because of the open and free-form nature of these social media tools. They are concerned since they do not have a way to control the process. Many have had negative experiences with platforms like Angie s List or Yelp and they see more downside than benefit. So rather than enter a losing battle, they have for the most part opted out. Copyright Roundpeg 2016 All Rights Reserved 7

8 ADVERTISING Social media isn t free. In recent years Facebook, LinkedIn and Twitter have all beefed up their advertising offerings. Are small businesses jumping on the advertising bandwagon? About 50% of the respondents have spent money on advertising in the past or are currently spending money. Will more companies give it a try in 2016? It doesn t seem so, with only 23% indicating they have plans to spend next year. WHERE ARE THEY ADVERTISING With lots of choices available, where are they spending their money? Right now Facebook is the clear winner. It is interesting that companies are turning to Facebook more than twice as often as they turn to Google. WHAT TYPE OF ADS? Why? Perhaps it is an indication of the usability of the platform and the level of comfort most people have with Facebook. LinkedIn is a distant second falling somewhere between the two. We are also seeing a rise of niche sites like Houzz and Yelp attracting a small share of the advertising budget. Within each social media platform, particularly Facebook, there are multiple ways for businesses to spend money for promotion. We asked how businesses were spending their money between paid ads and sponsored content. We found a close to even split between mostly ads, mostly content and a mix of both. There has been a shift away from ads toward more sponsored content in general. As the tools continue to evolve, we assume small businesses will move in that direction as well. Copyright Roundpeg 2016 All Rights Reserved 8

9 BLOGS AND Small business owners have come to realize that Internet marketing is more than just social media. In order to get a broader picture of content marketing programs among small business owners as they have expanded their activities, we expanded the survey to include questions about blogging and . As in years past, a significant percentage of small companies are embracing these tools, with more companies than ever (71%) taking advantage of marketing. BLOGS It was surprising to see a decline in blogs usage this year. It seems counterintuitive for companies to back off blogging just as Google is putting more emphasis on the importance of content, but that is exactly what happened. The time and resources required to create long form content (blog posts of words) has to factor into the decision to back off blogging. BLOGGING LESS OFTEN While many companies have the tools in place it appears they are not using them with much regularity. Only 37% of the companies who have a blog indicate they are updating it at least once a week. While some blogging is better than none, it is hard to believe companies which blog once a month or less (33%) actually see much benefit from their content marketing program. This year 30% of respondents indicated they blog rarely, or simply on special events. This segment has grown significantly in the last few years. When you consider fewer companies than in years past are blogging at all this rise is more significant indicating a real shift away from the time consuming blogging activities. Copyright Roundpeg 2016 All Rights Reserved 9

10 NEWSLETTERS Newsletters are a more invasive type of marketing, invading the inbox of clients and prospects. Many business owners fear they will wear out their welcome, so they are more likely to send s less often than they publish blogs, with once a month being the most commonly mentioned frequency. There is however a smaller group of respondents who rely on the direct response an generates to drive sales so they send s once a week or more. WHAT TYPE OF CONTENT? The age old question, what do we write about? Companies are answering that question in a variety of ways. Businesses seem to be most comfortable talking about what they know. Product information (55%), company updates and informative how to articles (48%) top the list. They clearly see the benefit of positioning themselves as subject matter experts as a way to drive traffic to their website, increase inquiries and sales. Surprisingly only 27% of respondents indicated they use blogs or to share promotions, coupons or deals. This may be more of a function of business types, as we had more respondents from B2B companies than B2C. What else are companies talking about in their ? We had a number of comments about using these tools for customer/donor appreciation and employee recognition. While most of the categories have been fairly stable the last few years, two categories which require more time and planning have declined. Surveys have fallen from 19% to 11% and promotions from a high of 43% to 27%. Copyright Roundpeg 2016 All Rights Reserved 10

11 CONTENT CREATION Creating a profile on each network is easy. Creating a steady stream of interesting and engaging content isn t. So who is providing direction and who is doing the heavy lifting when it comes to content generation? When we conducted our first study in 2010, many businesses were relying on interns and part time employees to fuel the social media process. We no longer see much reliance on interns for strategy development. BUSINESS OWNER OR KEY MANAGER IN CHARGE WHO ELSE IS INVOLVED? Owners have consistently had a key role in strategy development and managing the program. We did see a decline in owner involvement this year. It dropped below 50% for the first time since we started the study. Since 2014 we have see a slight rise in reliance on interns and external firms, but the combined total is still below 20%. Beyond the management of the program there is the need for a lot of content to fuel blogs, newsletters and social media updates. We are seeing companies investing in people to power their social media. While owners are almost always involved, 44% of the companies indicated they have a dedicated staff member generating content. This is up significantly from just two years ago, when 33% of the companies indicated they had one staff member in charge. Across the board, media remains primarily an internal function, with only 13% of companies leveraging customers and prospects and even less soliciting content from their vendors or external consulting or content generation firms. Copyright Roundpeg 2016 All Rights Reserved 11

12 RETURN ON INVESTMENT (ROI) Why all the interest in social media and content marketing? Is it a powerful part of the marketing equation or a complete waste of time? Unless you are tracking performance you really won t know. One of the strangest things we learned when we started studying small business internet marketing activity was how few results were being tracked. In 2012 business owners indicated a loose set of tracking metrics and only 33% said they actually tracked the ROI of their social media, comparing the investment they are making in time and resources against the return. Today 43% of companies indicated they are measuring ROI. WHAT DO YOU MEASURE The most common metric is web traffic. It is also the easiest to measure by simply glancing at web analytics. Companies also seem more likely to measure behaviors furthest from the actual sale. 53%track the size of their social community (fans, friends and followers). 58%connect their web traffic to their activity. While early stage metrics are helpful, they are a long way from the sale. Few companies are tracking more actionable measures such as completion of a conversion form or requesting a download (22%). WHAT THEY SAY VS WHAT THEY DO As we take a closer look at the data over time we actually find a surprising discrepancy. Despite the fact that more companies indicated they are measuring the results, we see a decline in every measurement category except subscriptions. Similar to the discrepancy between time spent on social media and perceived time spent, small business owners think they are doing more than they actually are. Copyright Roundpeg 2016 All Rights Reserved 12

13 CONCLUSION What have we learned? Small business owners don t have a realistic picture of their online marketing. They believe they are spending more time than they actually are. They also seem to be spending time on activity, not productive activity, and they aren t tracking their results closely enough to really understand what is working and what isn t. The good news? There is always room for improvement. We hope you have found this study useful. After you have read the report please share your comments on our blog. We would love to know what you think about the study and how you compare to your fellow small business owners. And, if you need help with your internet marketing, give us a call! Copyright Roundpeg 2016 All Rights Reserved 13