The Great Social Delusion – Are small businesses wasting their time on Social Media?

Are SMEs spending too much time & money on Social Media?

I recently conducted a survey of the digital marketing activity of 500+ small and medium-sized businesses in the UK. While there were many fascinating insights (to be posted at a later date) there was one particular set of data that stood out like a sore thumb.

 

When asked, “On which digital marketing activity do you spend the most time and money?“- the top answer (58% of SMEs) was “Social Media“.

 

 

 

In 20 years of working with businesses to help them drive sales and leads from their website, I have yet to come across a single business for which organic traffic from Social Media was the biggest contributor of sales, leads or qualified traffic.

 

Which digital channel is driving the most sales and leads?

To be sure that I wasn’t being swayed by my own personal biases, I examined the Google Analytics data from over 200 business websites to compare traffic and conversions (sales or leads) from all organic (non-paid) channels. The websites included in this analysis were from a mix of B2C, B2B and eCommerce businesses.

 

As you can see from the charts below, the single-most effective driver of traffic and conversions across all 200 sites was Organic Search.

 

 

 

 

The chart below combines each traffic source side-by-side for comparison:

 

 

Was most of this search traffic from branded search queries?

On average, only 15% of this organic search traffic was from searches that included the name of the business or brand in the search query.

 

 

Even excluding this traffic, the data clearly show organic search to be the most effective source of qualified sales and leads. Ironically, Organic SEO was the activity on which the survey respondents claimed to be spending the least amount of time and money.

 

Did Social Media perhaps contribute to these conversions?

Google Analytics attributes the most recent traffic source as the channel responsible for a conversion. As fewer than 2% of visitors make a purchase on their first visit, there was always a possibility that consumers were discovering the websites via Social Media and returning later to make a purchase via Organic Search. 

Thankfully, Google Analytics also provides the Assisted Conversions report which allowed me to evaluate what part Social Media had to play in all conversions. By analysing this data across all 200 websites, Social Media still only contributed to fewer than 11% of all conversions.

 

 

Why are SMEs spending so much time and money on Social Media?

It seems intuitive that a visitor who has just performed a Google search for a product or service that you offer, is likely to be a better prospect than someone who simply clicked on your post from Facebook.

Visitors performing product-related searches on Google are mostly doing so with the intention of making a purchase. Visitors browsing Facebook or Twitter are mostly doing so to connect with friends, be entertained or learn something new. Very few Social Media visitors are arriving on a website with a purchase in mind.

To try and understand why so many small business owners are spending their time on an activity that has such little impact on sales; I also asked them, “How confident do you feel about measuring the effectiveness of your digital marketing activity?“.

Business owners who spent most time and money on Social Media were, on average, 41% less confident about their ability to measure the effectiveness of their marketing compared to those who devoted their time to Organic SEO. This might explain why so many SMEs could be misallocating their hard-earned resources.

One of the key benefits of digital marketing is the ability to measure the results of your efforts and allocate your time and resources towards those that deliver the best results. Many small business owners still seem to be living in a pre-internet universe in which we had little choice but to accept John Wanamaker’s famous observation, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

 

Why are so few small businesses using SEO?

Another factor that may explain this behaviour is that most small business owners simply find Social Media much easier to understand than SEO. Many business owners still consider SEO to be confusing and constantly changing. They may mistakenly believe that Google shows only the largest brands in the highest positions.  While I would never describe effective SEO as “easy” (I would be redundant if it was!) it is this very attitude that allows your competitors to grab a bigger market share than you.   

At the very least, businesses should be making sure that the pages on their site look relevant for the search terms their prospective customers are using. They should also be regularly monitoring their Google rankings and Click through Rates in Google Search Console. Neither of these tasks are particularly difficult and are far more likely to drive qualified traffic to your site than posting endless content on Facebook that most of your followers will never even see.

 

Conclusion

I am fully aware of the benefits that Social Media can bring to a business. It can be a great tool for developing relationships, increasing brand awareness and promoting content to a highly-targeted audience. As a direct source of leads and sales, however, it rarely – if ever – compares favourably with visitors from organic search.

I would urge any business dependent on attracting leads and sales from their website to learn how to track Goals in Google Analytics. It is vital that you gain an understanding of where your time and money is best spent rather than simply assuming that Social Media is the answer to all of your prayers.

 

Special thanks to…

A special thank you to the following smart and generous people for their invaluable help with this post:

  • Phil Vallender

    Great article – thanks for doing this analysis. Your findings contain a very important message for SMEs.

    One the one hand, I think a lot of SMEs have been burned, as you say in your about me video, by SEO companies that furthered the idea that SEO is very complicated and absolutely requires specialist expertise, and then implemented rather simple strategies which soon got their clients penalised. I’ve seen it multiple times myself.

    On the other hand, social media is a tidal wave of confirmation bias. There is an endless supply of social media marketing advice (and self styled gurus), on social media channels, and SMEs are vulnerable to having the wool pulled over their eyes as to its effectiveness. Perhaps if there were more checks and balances, like their are in the google ecosystem, social wouldn’t be the bottomless time and money pit it is.

    Like you say, SMEs should use social media, for sure, but their understanding of and investment in it should be in proportion to that of organic search, which has far higher measurable impact.

    Thanks again.