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 living nightmare.
Disagree? Of course there are some who do. They are wrong – all of them – but that doesn’t mean they’ve always been wrong.
There was a time when using the internet (Google) or social media (Facebook) was a sure bet for small business marketing, and the reasons are as clear as the numbers.
During the Great Recession of 2008-09, more and more Americans began using the internet and social media on a daily basis. And with the release of the iPhone 4 on June 24, 2010, consumers could now carry the platforms on a mobile-friendly device wherever they went.
Easy small business marketing
If you owned a small business in 2010, and you were just friendly enough to share pictures and information with your Facebook network, you felt like you had the world at your fingertips. You didn’t need to buy expensive print or TV ads any longer. Instead, you just posted to your followers, asked them to share, and the phone immediately rang.
The correlation with the decline of newspaper revenue is astounding. In two years, from 2008 to 2010, national newspapers lost $5 billion in revenue. Guess where it went?
The same happened with Google. If you had a good website in 2010, and you understood a little bit about keywords, and if you had one of those easy-to-remember URLs, then you appeared somewhere near the top of Google in your business category.
The actual numbers
These numbers are almost too big to comprehend, but we can try anyway.
In 2008, Facebook says it had a total of 100 million users. By 2020, last year, it reported 1.69 billion users. Just between August 2008 and December 2010, Facebook added 508 million users.
If traffic isn’t your thing, maybe revenue is. In 2008, Google’s annual revenue was $21.8 billion. Last year, it was $181.7 billion. That’s annual revenue growth of about 72 percent a year.
How this impacts small business
When many small businesses made the switch to digital and social media marketing, shunning traditional outlets, they entered at a time when Facebook and Google revenue was on a slow incline. (Don’t forget, Facebook didn’t even become profitable until 2012.)
Here’s a real-life example: If you owned a tire shop in 2010, and you had a strong Facebook page, and you posted specials consistently, and you interacted with your followers, you were almost guaranteed to show up in feeds and be seen by plenty of people. There was no real expense to you – you weren’t buying ads or boosting posts. You just messed around on the site and caught plenty of attention.
Because you were one of a (relatively) small group active on the website, you got a lot of traction just by your consistent activity. Then, more and more people heard about your success on social media, right?
The supply-demand side of digital and social took over from there. More tire stores joined. They produced even better content than you, forcing you to improve yours yet again. They 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 came along.
And that’s when Facebook introduced boosted posting. Then they introduced Facebook advertising. They started to extract real money, and you paid them for the audience you reached (which, as you’ve learned by now, doesn’t usually convert into leads, much less sales).
It’s the same for Google. As more and more small businesses found better URLs and understood SEO and created more dynamic websites, the more you slipped in the rankings. That led you to spending more on your website until you finally broke down and bought some Ad Words. And then those Ad Words became more and more expensive.
And there’s the problem
If you want to know why small business marketing is not getting easier, that’s the reason. And if you don’t believe me, just consider some raw data.
In our company’s inaugural Small Business Sentiment Survey, we asked small business owners to select the area of business where they need the most help. Among five choices, “Marketing/Website” ranked first, with 40 percent.
A group called SEMRush published another survey earlier this year and, in regards to digital marketing, asked small businesses to rank their most important challenges. The top result was a “Limited Marketing Budget” – 67 percent gave that as the answer. The second-highest answer was “Organic traffic requires a lot of effort and patience,” and 60 percent gave that as the most important challenge.
In other words, small businesses are quickly learning that, in order to be successful in digital and social marketing, they need money and a lot of time. And it just so happens those are two things small business owners do not have.
Here’s even more evidence of the shift of small business marketing on digital and social channels. The National Federation of Independent Businesses releases a “Problems and Priorities” survey of small businesses every four years. Businesses are asked to rank the biggest problem (#1) down to the easiest problem (#75).
You won’t be surprised what ranks first: Health Insurance for Employees. That’s a nightmare in its own right.
But follow the trend of another category in the survey: “Ability to Cost Effectively Advertise.” In other words, they’re asking if small businesses can obtain new customers through advertising at a price that has 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
Here’s what those numbers show: For eight straight years, from 2008-16, small business owners felt advertising was getting cheaper and better. But in 2020, for the first time in 12 years, that number headed in the other direction, and businesses said it was now getting harder.
And here’s one more statistic from the same survey. Another category asks business owners to rank Using Social Media to Promote Business – a category they opened in 2012. Here’s how those rankings play out:
2012 – 70th of 75
2016 – 64th of 75
2012 – 57th of 75
In other words, every four years, social media promotion is getting harder and harder for small businesses.
The misnomer that small business marketing is getting easier because of technology is wrong. Every year, every month, it gets more and more difficult.
In the second part of this series, we’ll put real dollars to the problem and explain the world of changing algorithms, the cost of SEO, the brutal experience of losing social media ranking, and the amount of time it now takes to effectively use social and digital channels to promote your business.