Jonathan McElvy
Editor’s Note: This is Part I of a three-part series on Marketing for Small Businesses.
The digital and social media revolution has made small business marketing a nightmare.
Disagree? Of course there are some who do. They are wrong – all of them – but that doesn’t mean they were always wrong.
There was a time when using the internet (Google) or social media (Facebook) was a safe bet for small business marketing, and the reasons are as clear as the numbers.
During the great 2008-09 recession, more and more Americans were using the internet and social media on a daily basis. With the release of the iPhone 4 on June 24, 2010, consumers could now carry the platforms anywhere on a mobile-friendly device.
Easy Marketing for Small Businesses
If you owned a small business in 2010 and were just kind enough to share pictures and information on your Facebook network, you felt like you had the world at your fingertips. You no longer had to buy expensive print or TV spots. Instead, you just posted to your followers, asked them to share, and the phone rang immediately.
The correlation with the decline in newspaper revenue is astounding. In two years, from 2008 to 2010, national newspapers lost $ 5 billion in sales. Guess where it went
The same thing happened with Google. If you had a good website in 2010 and understood a little about keywords, and had one of those easy-to-remember URLs, you came up somewhere on the top of Google in your business category.
The real numbers
These numbers are almost too big to understand, but we can try anyway.
According to its own information, Facebook had a total of 100 million users in 2008. By 2020, last year, 1.69 billion users were reported. Between August 2008 and December 2010 only, Facebook added 508 million users.
If traffic isn’t your thing, maybe sales are. In 2008, Google had annual sales of $ 21.8 billion. Last year it was $ 181.7 billion. That is an annual sales growth of around 72 percent per year.
How this affects small businesses
When many small businesses switched to digital and social media marketing and avoided traditional outlets, they came at a time when Facebook and Google revenues were only slowly increasing. (Don’t forget, Facebook didn’t get profitable until 2012.)
Here’s a real-world example: if you owned a tire store in 2010, had a strong Facebook page, posted specials regularly, and interacted with your followers, you were almost guaranteed to show up on feeds and be seen by a lot of people. There was no real cost to you – you didn’t buy ads or boost posts. You have just been messing around on the website and getting a lot of attention.
Since you belonged to a (relatively) small group that was active on the site, your consistent activity alone gave you a lot of traction. Then more and more people heard about your success on social media, right?
From there, the supply and demand side of digital and social took over. Other tire shops have joined. They produced even better content than you did and forced you to improve yours again. You spent more time on the site so you spent more time there too.
Pretty soon, Facebook had you in a posting match with your competitor until another dozen competitors caught up.
And it was at this point that Facebook introduced increased posting. Then they introduced Facebook advertising. You started extracting real money and you paid them for the audience you reached (which, as you’ve since learned, doesn’t usually convert into leads, let alone sales).
This also applies to Google. The more small businesses found better URLs and understood SEO and built more dynamic websites, the more they slipped up the rankings. That led you to spend more on your website until you finally collapsed and bought some AdWords. And then these AdWords got more and more expensive.
And there is the problem
If you want to know why small business marketing isn’t getting easier, this is why. And if you don’t believe me, just look at some raw data.
In our company’s first Small Business Sentiment Survey, we asked small business owners to select the business area where they needed the most help. Among the five options, “Marketing / Website” came first with 40 percent.
A group called SEMRush released another survey earlier this year asking small businesses to rate their top digital marketing challenges. The top result was a “limited marketing budget” – 67 percent gave this as the answer. The second highest answer was: “Organic traffic requires a lot of effort and patience,” and 60 percent said this was the most important challenge.
In other words, small businesses are quick to learn that they need money and time to be successful in digital and social marketing. And it just so happens that these are two things that small business owners don’t have.
Here is even more evidence of the shift in marketing from small business to digital and social channels. Every four years, the National Federation of Independent Businesses publishes a survey on “Problems and Priorities” of Small Businesses. Companies are asked to rank the biggest problem (# 1) to the easiest problem (# 75).
You won’t be surprised which comes first: employee health insurance. This is a nightmare in itself.
However, follow the trend of another category in the survey: “Ability to Advertise For Low Costs.” In other words, ask if advertising can bring small businesses new customers at a price that generates a good return on investment. The lower the number, the harder it is for small businesses.
2008 – 28th of 75
2012 – 37th of 75
2016 – 46th of 75
2020 – 40th of 75
These figures show that: For eight years from 2008 to 2008, small business owners believed that advertising was getting cheaper and better. But in 2020, for the first time in 12 years, that number went the other way, with companies saying it was getting tougher.
And here is another statistic from the same survey. In another category, business owners are asked to rank. Using Social Media to Promote Business – a category they opened in 2012. This is how these rankings play out:
2012 – 70th of 75th
2016 – 64th of 75th
2012 – 57th of 75
In other words, every four years, promoting social media for small businesses is getting harder and harder.
The misnomer that technology makes marketing easier for small businesses is wrong. It gets more difficult every year, every month.
In the second part of this series we will give real dollars to the problem and explain the world of changing algorithms, the cost of SEO, the brutal experience of losing social media rankings, and the time it takes now to use it effectively social and digital channels to promote your business.