New research from LinkedIn found that the majority of small and medium-sized businesses (SMBs) are turning to social media for growth.
Roughly 81% of SMBs are using social media, according to a LinkedIn study released Thursday, and of those that use social, 94% do so for marketing purposes.
Social media is even more important to “hyper growth” companies, or those that self-reported “significant” year over year revenue growth. Of the hyper growth companies surveyed (about 16% of the entire group), 91% said social media helped “increase awareness” of their brand, while 82% said it helped them generate “new leads.” Nearly three quarters of the hyper growth companies increased their social media budgets last year.
“We know that for SMBs the greatest challenge is attracting and retaining customers,” says Lana Khavinson, a senior product manager at LinkedIn who oversees the company’s SMB initiatives. “Here is a really clear indicator of the value that social media is providing to companies that are rapidly growing.”
The data is important to LinkedIn, which has “millions” of members who are small business entrepreneurs, says Khavinson. LinkedIn also announced a new website dedicated to helping SMBs better utilize LinkedIn for growth and marketing purposes.
However, the data may be equally reassuring to other social networks that are competing for company ad dollars, most notably Facebook and Twitter.
Facebook, for one, has a lot to gain by attracting small business advertising. The platform has more than 1 million advertisers, but 25 million businesses have active Facebook pages, which means a lot of untapped potential ad revenue. In November, Wedbush Securities analyst Michael Pachter described it to Mashable as “a goldmine waiting to be exhausted.”
Twitter expanded its self-serve advertising platform overseas last quarter to try and entice SMBs in Canada, the UK and Ireland. The expansion was further evidence that the company sees value in reaching smaller advertisers.
LinkedIn partnered with market research firm TNS for its study, which gathered information from 998 SMBs in the United States and Canada. Not all those surveyed were LinkedIn users, according to a company spokesperson. The report defines a “small business” as having revenue between $1 million and $9.9 million; a “medium business” has revenues between $10 million and $49.9 million.