Only 28 per cent of SMBs currently active in social media according to Optus Business Social Media Index

A new national study surveying 380 Australian small and medium businesses (SMBs) has revealed that more than 50 per cent are not taking advantage of social media as a marketing tool to promote their business, calling for a stronger business case that demonstrates clear return on investment.

The Optus Business Social Media Index, released today in association with Council of Small Business of Australia (COSBOA), has found that only 28 per cent of SMBs currently use social media, investing on average over 6.6 hours per week, while 56 per cent do not use it at all nor have any near-term plans to start.

More than 50 per cent of SMBs not involved in social media believe that social networking is not appropriate for their industry, while 25 per cent believe there is no clear way to build a business case for an investment in the area. However, non-users cited customer satisfaction measures (44 per cent) and sales data (37 per cent) as the key measures of success that might convince them to use social media in the future.

In the next 12 months, a further 16 per cent of SMBs plan to use social media, although more than two thirds are still unsure of the exact benefits. Despite this uncertainty, 77 per cent of SMBs planning to use social media cite increasing sales by reaching more prospective customers as their primary motivation for getting involved.

Phil Offer, Marketing Director for Optus Small and Medium Business, said that while social media presents a powerful opportunity for SMBs to connect with prospects and customers, the survey results indicate that the majority of SMB decision makers are yet to be convinced it is worth the time and investment.

"Our research shows that many small to medium businesses are keen to embrace social media as a means to drive sales by reaching new prospects and engaging loyal customers but are holding back until they can justify the return on investment. Social media is still perceived as the 'digital wild west' so many SMBs are still learning and experimenting to determine how social media can help them achieve measurable business benefits.

"To assist SMBs along their social media journey, Optus has launched a comprehensive suite of 'how to' social media guides and case studies which are available for free on our www.bizthinktank.com.au advice portal," Mr Offer said.

Social media users landscape - benefits, usage and value
While the majority of SMBs are still uncertain about the value of social media, the 28 per cent of businesses that actively use the tool are embracing the medium. Encouragingly, 47 per cent of SMBs sold products or services through social media sites, with Facebook emerging as the tool of choice for 58 per cent of sellers, followed by YouTube, Twitter and LinkedIn.

• Success measures and benefits: 61 per cent of SMBs active in social media cite the number of followers/friends as the key measure of success, while 82 per cent cite increasing sales through loyal or engaged customers as the primary benefit, followed by networking at 78 per cent.
• Usage trends: Facebook is the number one social media site used by SMBs (53 per cent), followed by YouTube (30 per cent), Twitter (27 per cent) and LinkedIn (19 per cent). Setting up a profile on a social media site is by far the most common social media activity, with 77 per cent establishing a presence in this way and 68 per cent actively responding to posts. Only 27 per cent have set up a blog for their business.
• Marketing budgets: Despite nearly two thirds of SMBs having an annual marketing budget of less than $10,000, social media is yet to emerge as the marketing tool of choice. Nearly 80 per cent of SMBs currently allocate less than 20 per cent of their marketing budget to social media and only 5 per cent allocate more than 50 per cent.
• State trends: Social media usage is relatively even across Australia, with 30 per cent of SMBs in metropolitan Australia using social media versus 26 per cent in regional areas. SMBs in Victoria and Queensland lead social media usage at 32 per cent each, while South Australia and NSW follow suit at 28 and 27 per cent respectively.
• Industry trends: SMBs in the goods industry are the most active in social media (18 per cent), followed by retail (13 per cent), accommodation, café and restaurants (12 per cent), and marketing and media services (10 per cent) as these industries rely more heavily on word of mouth marketing. The information technology services and transport and storage sectors are the least active in social media at 3 per cent and 4 per cent respectively.

"Our research identified several SMBs across numerous sectors that are using social media successfully to grow their business, including Down to the Woods, Encompass Books, Matisse Art for Hair and Team Telecom Pty Ltd. These case studies demonstrate how social media provides SMBs with a low cost, efficient marketing tool to improve productivity, access new revenue streams, develop relationships and build brand awareness.

"With the explosion of Smartphones such as the BlackBerry and iPhone, SMBs also have the opportunity to manage their social media accounts on the go and to connect with prospects and customers whenever and wherever," said Mr Offer.

Peter Strong, Executive Director of COSBOA, said that while many SMBs are still learning the ropes with social media, the best attribute of social networking is that it is one of the few level playing fields that exist in the world of business.

"The research should start to influence the opinion of policy makers who need to ensure that there remains ease of access to the internet for all business, via a mobile device or PC, and that no barriers should be placed in the way of the most innovative and personable part of the Australian business community," Mr Strong said.

For more information, please visit www.bizthinktank.com.au/socialmedia

Media contacts:
Simone Bergholcs/Kasia Ciszak
Optus Corporate Affairs
Tel: (02) 8082 7850

Note to editors:
The Optus Business Social Media Index is the largest qualitative and quantitative research conducted by Optus SMB, in association with COSBOA. The study represents the insights and vision of over 380 small and medium businesses, from every state and territory. Of the businesses surveyed, 73 per cent were small businesses with 1-20 employees while the remaining 27 per cent were medium business with 21-199 employees. The research was conducted by Stancombe Research and Planning on behalf of Optus and COSBOA.

The Optus Business Social Media Index report is available on request.