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The evolution of social media as a marketing tool for entrepreneurs.

INTRODUCTION

Entrepreneurs face many daunting tasks in the operation of their businesses, not the least of which is maximizing the marketing potential of social media while at the same time being able to measure cost benefits. According to the 2011 Q3 Nielsen State of the Media: The Social Media Report (NMincite, 2011), "60 percent of people who use three or more digital means of research for product purchases learned about a specific brand or retailer from a social networking site" (para. 1). This statistic, and a host of others, serves to prove that tried and true social networking sites like Twitter, Facebook, Foursquare, LinkedIn, and newcomers Google+ and Tumblr are here to stay. Furthermore, they are influencing the way consumers buy products and services. To encourage business owners, large and small alike, to use social media as a marketing platform, several social media companies have developed business-specific tools or made it possible to brand an online profile to a business.

The number one deterrent of social media for small business has always been the time commitment required to keep profiles active and the almost impossible task of calculating the return on investment (ROI). Advances in the social media scene like Hootsuite, a social media dashboard and scheduler, allows scheduling and posting content to all online profiles simultaneously. Facebook Pages Insights, which allows tracking the number of visitors to a Facebook Business Page, helps close the gap between big brand experts (i.e., Coke and Apple) and average mom and pop businesses at leveraging social media.

INTERNET GROWTH AND CURRENT SMALL BUSINESS SOCIAL MEDIA LANDSCAPE

In 1995 statistics indicated 0.4% of the world population used the Internet. The latest figures show that number has grown to 32.7% or some 2.2 billion users (Internet World Stats, 2012). With this incredibly fast evolution of the Internet and social media, it is evident from everyday media that big businesses are making use of every social media outlet available today; but are small businesses doing the same? An industry study in 2011 published in the Social Media Examiner surveyed 3,342 marketers, and just under half of those were self-employed or small business owners (Stelzner, 2011). The results of that survey are summarized below:

* Overall, 90% of the marketers surveyed agreed with the statement "Is social media important to your business?" and 66% of small business owners strongly agreed with the statement.

* 80% of marketers indicated social media use generated more exposure for their business.

* An increase in search engine rankings was seen by almost two-thirds of marketers.

* Spending as little as six hours weekly generated leads for 52% of marketers, with small business owners more likely to strongly agree to the lead generation question.

* 59% of small business owners saw a reduction in marketing costs when social media were implemented.

* Facebook, Twitter, LinkedIn, and blogs dominated usage stats, with 92%, 84%, 71%, and 68% respectively, with 78% of small business owners indicating they were more likely to use LinkedIn.

APPROACHES USED TO DEFINE AND MEASURE SOCIAL MEDIA ROI

While some social media strategies, such as offering Facebook- or Twitter-specific deals and coupons, can be directly traced to a traditional form of ROI like generating a sale, it is important to note that other facets of social media interaction also constitute ROI and can be important indicators of the health of a social media campaign. As Gangemi (2011) of Fox Business says:

It's no secret that for marketers--particularly small business marketers-- that social media is now the price of admission to reach a mass audience. Not to mention its impact is more measurable than just about any other marketing technique: The number of re-tweets, clicks and mentions that content receives online are the new ways to measure success (para. 5).

Social media marketing campaigns can be tracked more efficiently today, but what methods should the entrepreneur use and how is one to decipher all that data? Traditional business ROI calculations are based upon the benefit or return of an investment divided by the cost of the investment (including employee time). It is not that straight forward when calculating ROI from a social media marketing campaign. A more sophisticated approach is needed. One approach when measuring ROI is to consider the difference between social media and social networks. Determining precise numbers for the ROI from social media is difficult, yet social networking's ROI is a bit more obvious (Hartshorn, 2010; Hoffman & Fodor, 2010; Wilfong, 2010). Calculating social networking ROI is more difficult because it requires a new set of measurements that begins with tracking the customers' investments, not the company's.

Handling the measurements this way makes much more sense. It takes into account not only short-term goals such as increasing sales in the next month via a social media marketing campaign or reducing costs next quarter due to more responsive online support forums, but also the long-term returns of significant corporate investment in social media (Hoffman & Fodor, 2010, para. 4).

So are social media marketers approaching the issue the wrong way? Should they abandon the traditional method used to measure ROI?

Social media is hard work and it takes time in which you can't automate individual conversations; whereas, social networking is direct communication between the user and the people that he chooses to connect with. Despite the fact that in social networking people can write blogs or discuss anything, social media does not allow users to manipulate comments, correct errors or other data for personal or business benefit (Edosomwan, Prakasan, Kouame, Watson & Seymour, 2011, para. 22).

Once the focus of ROI with regard to social media has been broadened, small business owners can begin to consider the "Impact of Relationships" (IOR). This approach focuses on analyzing the social media interactions between a business and its fans/followers and then determining how that relationship can be cultivated and if it is worth cultivating (Leggio, 2008).

Instead of emphasizing their own marketing investments and calculating the returns in terms of customer response, managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers' brands (Hoffman & Fodor, 2010, para. 3).

TOP SOCIAL MEDIA OUTLETS OVERVIEW

Although various social media lend themselves to marketing, some have become more popular than others. Facebook Business Pages, Facebook Insights, and Twitter are three receiving widespread use today.

Facebook Business Pages

Facebook Business Pages allows businesses to create a profile separate from the owner's profile, giving "fans" of the business a legitimate place to interact without having to see the owner's personal Facebook posts. Pages work much like the rest of Facebook; that is, users "like" business pages and then everything that the business posts vies for a spot in the user's News Feed. Facebook Pages can be a powerful marketing tool when leveraged correctly. Pages are much more likely to show up higher in organic listings on search engines simply due to the large number of daily visitors to Facebook. Pages can also help boost a business's website because linkbacks from a business's Facebook Page or Twitter profile are a part of both Google and Bing's algorithm for search results (Fishkin, 2010). This translates to a way small businesses can break into the search market without paying for expensive search engine optimization (SEO) services.

With the addition of tabs and iframes apps, Facebook Business Page users can now create an entire website within Facebook. This can be a cost-effective way to put their business on the virtual "map." Facebook finished 2011 with an impressive round of stats, boasting a total number of active users at over 800 million and reaching the status of being the most visited website in the United States (NMincite, 2011). For the small business world, that provides opportunities for at least a few thousand potential customers, just in the immediate business locale. Thus, not being listed on Facebook Pages is something small businesses can no longer afford.

Facebook Insights

Calculating ROI on a Facebook Business Page became easier with the addition of Pages Insights, an analytics type report that Pages users could view at any time to see a snapshot of how their page was doing. "By understanding and analyzing trends within user growth and demographics, consumption of content and creation of content, Page owners and Platform developers are better equipped to improve their business with Facebook" (About Facebook Insights, 2012). With the update to Insights in late 2011, users can now track measurements by the unique visitors to the page, which is much more accurate than simply measuring how many times a page was visited. Insights measure content viewed (reach), posts clicked (engaged users), content being "talked about," and total "likes" for the page. It also reports on how many friends your page's fans have. All of these measurements give businesses an idea how many potential customers they have available to them on Facebook (Hamid, 2011).

Twitter

Telling potential customers about the business and explaining to them why they should care using only 140 or fewer characters can be problematic. However, this is the challenge that businesses on Twitter face and try to perfect each time they post. The "micro-blogging" phenomenon that is Twitter has grown by leaps and bounds since its creation. In 2009 Quantcast.com (a statistics website) reported an average of 23.5 million monthly users on Twitter. Today, that same website reports 87.4 million monthly users. Nevertheless, simply being on Twitter is not enough for today's entrepreneurs. They must be seen amid the thousands of hourly tweets by celebrities, comedians, and random users, which accounts for 40% of all Twitter traffic being "pointless babble" (Kelly, 2009).

To stand out, business users must become proficient in the language of Twitter and learn to utilize hashtags, retweets, and mentions to expand the reach of their brand. It is much more than being able to measure the ROI; it is about entrepreneurs building relationships with customers who use Twitter. This is a time-consuming task. Empirical research conducted in 2009 indicated the time commitment to Twitter was not viable for small businesses at that time. Use of social media provides opportunities for entrepreneurs but also presents unique challenges for small business marketing.

When small business owners start a Twitter account, they have a responsibility to monitor it and develop a solid following and do so without the human capital, infrastructure and financial capacity available to large companies engaged in a social media marketing campaign. An inactive Twitter account with dwindling followers and unanswered customer messages would obviously be contrary to a business's social media marketing objectives and one reason why small business owners are not embracing Twitter as a marketing tool (Geho, Smith, & Lewis, 2010, para. 41).

However, since this research finding, programs have been developed to monitor Twitter. In addition, the rise of mobile applications and smartphone users has changed the landscape of how people access Twitter, which reduces the time commitment for entrepreneurs leveraging Twitter as a marketing tool.

With 63% of Twitter users accessing social networks via mobile phone, tweets are now seen more in real-time as opposed to being looked at hours after they are posted. This means that entrepreneurs can still be competitive without needing to post every five minutes for fear of being lost in a barrage of tweets. Applications like Tweetdeck and Hootsuite, which give a "dashboard" view of the user's Twitter account, help small business owners easily identify and sort tweets, retweets, mentions, and direct messages, cutting down on the time commitment. Websites like Hashtags.org give users the ability to search keywords related to their business and gain valuable information about when those topics are "trending" and how popular they are, which helps users determine when tweets with certain hashtags can have the most impact.

BRINGING IT ALL TOGETHER

The number one rule of social media is: Stay active. For small business owners, devoting the time and effort to post on their social media outlets every Tuesday and Thursday at 9:00 a.m. is not reasonable. This issue has proven to be more than most small business owners can overcome; and as a result, many simply give up on their dreams of leveraging social media to take their business to the next level. To remedy this situation, Hootsuite was introduced in 2008.

Hootsuite is a social media dashboard and scheduler that allows users to link their social media profiles to the program and manage their entire social media suite from one easy to navigate program. Hootsuite did not gain widespread popularity and emerge on the small business scene until late 2010. Hootsuite has several tiers of service, including one which can appeal to any size business--it is free. The major programs the free tier of Hootsuite will post to are Facebook (profiles and pages), Twitter, LinkedIn, Foursquare, Wordpress, Ping.fm, MySpace, and Mixi. However, the free version does limit users to five social networks. For each post scheduled the user can choose any or all of the linked social networks to receive the post. The scheduler portion of Hootsuite enables users to manage and minimize the time they spend posting to their social media networks. It is far easier for most small business owners to carve out two hours on a Sunday afternoon than to remember to post to all of their social networks several times a week. Hootsuite also offers built-in apps like Trendspotter, which can be utilized to search keywords associated with a user's business or industry and post relevant links straight to a user's social media campaigns from within the apps. This minimizes the time users must spend trolling the web for useful content to post.

Posting is only half of the social media equation. Monitoring the networks is critical for any entrepreneur. The dashboard function of Hootsuite provides another time-saver for businesses, and it serves two main purposes. First, it allows users to see the entirety of social media interactions in one place. Second, it gives users insights into how often content is being mentioned and re-tweeted. This information is crucial to small business owners for interacting with their customers and beginning to see some ROI on their social media activity. Hootsuite also offers simple reports that can be emailed to users on a scheduled basis. These reports look similar to Google Analytics reports and give a quick, easy review of the activity of the account.

CONCLUSION

When social media were first introduced to the small business marketing scene, the learning curve and time needed for implementation made it too cumbersome to be a viable marketing platform for most entrepreneurs. Many entrepreneurs had difficulty equating social marketing with ROI. More recently, social media have become the norm for big and small businesses alike; and analytic tools and marketing approaches better define ROI. As a result, entrepreneurs can no longer afford not to be listed on mainstream social networking sites. Fortunately, social media avenues have matured to the point that mom and pop businesses can utilize them without having to hire someone to dedicate to the cause. This growth in social media can be partly attributed to the use of Twitter and other social outlets for consumers to connect over popular media programs such as American Idol and major sporting events such as the Super Bowl. During the 2012 Super Bowl, Twitter broke a record with over 12,000 tweets per second after the Giants' victory (Eadicicco, 2012).

Although tools have been developed to minimize time commitments and learning curves, entrepreneurs should still proceed with caution when implementing social media marketing campaigns. They must keep in mind that social media are not a one-size-fits-all kind of marketing. An outdated Twitter feed or stagnant Facebook page can be detrimental to the overall marketing brand of a small business. Social media must still be implemented with a content and marketing strategy that first and foremost builds upon the existing brand of the company.

REFERENCES

About Facebook Insights. (2012). Retrieved February 4, 2012, from http://www.facebook.com/help/?page=122407381175085

Eadicicco, L. (2012). Super Bowl 2012 Twitter statistics: Two new records set after Giants vs. Patriots. Retrieved February 9, 2012, from http://www.ibtimes.com/articles/293952/20120206/ super-bowl-twitter-recordsgiants-patriots.htm

Edosomwan, S., Prakasan, S., Kouame, D., Watson, J. & Seymour, T. (2011). The History of Social Media and its Impact on Business. The Journal of Applied Management and Entrepreneurship, 2011, Vol. 16, No.3

Fishkin, R. (2010). Google + Bing confirm that Twitter/Facebook influence SEO. Retrieved January 18, 2012, from http://www.seomoz.org/blog/google-bing-confirm-twitter -facebook-influence-seo

Gangemi, J. (2011). When it comes to social media, how much is too much? Retrieved January 16, 2012, from http://smallbusiness.foxbusiness.com/technology-web/ 2011/06/30/tips-for-automating-your-social-media/

Geho, P., Smith, S., & Lewis, S. (2010). Is twitter a viable commercial use platform for small businesses? An empirical study targeting two audiences in the small business community. Entrepreneurial Executive, Vol 15.

Hamid, S. (2011). Behold Facebook's new 'page insights' dashboard. Retrieved January 18, 2012, from http://www.seoptimise.com/blog/2011/11/behold-facebook's-new- 'page-insights'-dashboard.html

Hartshorn, S. (2010, May 4). 5 differences between social media and social networking. Retrieved February 11, 2012, from http://www.socialmediatoday.com/SMC/194754

Hoffman, D. L., & Fodor, M. (2010, October 1). Can you measure the ROI of your social media marketing? Retrieved February 15, 2012, from http://sloanreview.mit.edu/ the-magazine/2010-fall/52105/can-youmeasure-the-roi-of- your-social-media-marketing/

Internet World Stats. (2012). Internet Growth Statistics: Today's road to e-commerce and global trade. Retrieved February 16, 2012, from http://www.internetworldstats.com/emarketing.htm

Kelly, R. (2009). Twitter study reveals interesting results about usage--40% is "pointless babble". Retrieved January 18, 2012, from http://www.pearanalytics.com/ blog/2009/twitter-study-reveals-interesting-results40-percent- pointless-babble/

Leggio, J. (2008). Social media marketers can--and must--prove ROI. Retrieved January 18, 2012, from http://www.zdnet.com/blog/feeds/social-media-marketers-can-and -must-prove-roi/ 321?pg=2

NMincite. (2011). State of the media: The social media report Q3 2011. Retrieved January 20, 2012, from http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/ 2011-Reports/ nielsen-socialmedia-report.pdf

Stelzner, M. (2011, April). 2011 Social Media Marketing Industry Report. Retrieved January 16, 2012, from http://www.socialmediaexaminer.com/SocialMediaMarketingReport2011.pdf ?9d7bd4

Wilfong, J. (2010, April 12). Talent culture. Retrieved January 14, 2012, from http:// www.talentculture.com/innovation/social-roi-intuition-metrics-and -social-network-analysis/

Patrick R. Geho, Middle Tennessee State University

Jennifer Dangelo, Tennessee Technological University
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Author:Geho, Patrick R.; Dangelo, Jennifer
Publication:Entrepreneurial Executive
Article Type:Report
Geographic Code:1USA
Date:Jan 1, 2012
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