Facebook Marketing up 40 Percent among Local Businesses

Feb 18th, 2011 | By | Category: Marketing

40 percent more local businesses are using Facebook marketing to promote their services than a year ago, according to research released Tuesday by MerchantCircle. Search engine marketing using Google is also on the rise, the study found, but business owners still lack confidence in mobile marketing and group coupon services like Groupon, despite evidence of effectiveness.

M13 Social Networking 300x240 Facebook Marketing up 40 Percent among Local Businesses

Social Networking: Ninjacam by DaveFayram, on Flickr

MerchantCircle’s based its analysis on its quarterly Merchant Confidence Index survey of over 8,500 small and local business owners across the US.

The survey revealed that local merchants on limited budgets are increasingly seeking to lower their marketing costs by using high-tech tools like social media, search engines, and email.

Over 50 percent of local merchants are spending less than $2,500 a year on marketing, and 60 percent have no plans to raise their budgets this year. 26 percent cite high costs as their chief complaint about online marketing, and 37 percent say they lack of time and resources to effectively test new online marketing tools like group coupons.

Local merchants have now adopted social media as their main marketing tool. 70 percent of merchants now use Facebook, overtaking Google at 66 percent as the most widely used marketing method amongst local merchants, at 70 percent to 66 percent. Google search is still considered slightly more effective by merchants, with 40 percent ranking Google as among their top three most effective marketing methods, compared to 37 percent for Facebook. Use of Twitter and Foursquare is also up.

Social media, search engines, and email remain more popular marketing tools than newer methods like mobile marketing and group coupon services. Less than 15 percent of merchants report doing any mobile marketing, and more than 50 percent have no plans to do so in the near future.

Similarly, only 11 percent of local merchants have used a group coupon service like Groupon or LivingSocial, and only 20 percent planning to do so in the coming months. 55 percent of those who have used such a service say they would not do so again.

With both mobile marketing and group coupons, lack of understanding about how to effectively use these tools appears to be a barrier, along with lack of time to learn how to use them.

Online marketing services are promoting themselves aggressively, with 51 percent of local merchants reporting at least one online marketing sales call a week, and 10 percent receiving calls on almost on a daily basis.

Meanwhile use of traditional offline marketing tools like Yellow Pages and direct mail continues to decrease, though analysts do not expect these methods to disappear anytime soon, since they continue to deliver results for local merchants. 24 percent of merchants say that coupons or direct mail remain among their top three most effective marketing tactics, 23 percent place print Yellow Pages ads in their top three, and 20 percent rank print newspaper ads in their top three.

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