The Role of Social Media in Small Business Marketing Spending

By Tiffany Simms

Increasingly, small business managers are noticing the changing tide of internet marketing heavily rooted in social media and email. Not only does this medium offer greater exposure to a customer base, but it’s also much cheaper than traditional means of print, television, and radio advertising. To illustrate just how businesses of every size are capturing the social media revolution, Swedish furniture giant IKEA, launched a highly successful low-cost photo-tagging promotion on Facebook due to a limited advertising budget for the opening of their store in Malmo, Sweden.

By allowing Facebook friends to compete for first place in tagging furniture in uploaded pictures (and thus win the item), the company built a viral marketing campaign that generated tremendous advance buzz for the new location.

Research Proves Change

According to eMarketer.com, “Campaigner and Hurwitz & Associates studied small businesses with 20 employees or fewer in July 2009 and found 28% of those that used e-mail marketing considered it an inexpensive and effective way to reach new customers.”

Coupled with the research cited in our earlier blog post “The Best Marketing May Be the Cheapest,” where it was noted that consumers spend 23% of their time consuming media online, business owners’ affinity for cheap and functional social and email marketing campaigns has led the reallocation of marketing dollars. Even in a slow economy, the chart above from eMarketer.com shows more than 70% polled plan to increase their email and social media spending.