Most Local Merchants Unfazed by Facebook Controversies, Though Some Signs of Trouble

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Most local merchants aren’t changing their Facebook marketing plans, despite the controversies surrounding the social network, according to a brand new Street Fight survey. There are hints that marketers’ ardor for social media is cooling a bit, but they still regard it as their most effective local marketing tactic.

I’ll be presenting highlights from our latest annual survey of 300 small businesses at this week’s Street Fight Summit 2018 in Brooklyn. I’ll also be comparing some results with those of our supply-side survey of execs in the local tech and marketing services space, to see if supply and demand are still in alignment, what’s hot or not in R&D, and where there might be untapped opportunities.

By now, consequences of the negative aura surrounding Facebook’s role in customer info abuse, fake news, and Russian political meddling should have started to take hold. So, one of the questions we asked in our May survey was: given these controversies, “how, if at all, has this affected your attitude towards Facebook as a marketing platform?” The result? Well over half of local merchants we polled said they would continue to use Facebook as they had previously, as shown in the figure below.

There’s some damage. If you strip out the respondents that were not using Facebook for marketing, one in five (22%) of the ones that were using Facebook say they’ll either be re-examining their use or not using it any more. But, of course, that means almost 80% are staying the course.

According to our survey, customer acquisition is the primary objective of social media marketing for local merchants. Nearly half (44%) listed that in their top two goals, with generating sales or raising their company’s brand awareness also popular. In fact, more of the bigger local SMBs—those with more than 10 employees—tabbed generating sales than acquiring new customers. And, overall, the survey respondents rated social media as their most effective marketing tactic, similar to what we saw last year.

However, when comparing the new survey with 2017’s, we are detecting some hints that local small businesses may be backing off a little from their Facebook enthusiasm. Last year ,we intentionally over-sampled larger local merchants, but when we controlled for that, we found that use of paid Facebook ads appears to be down. About one-fifth of local merchants (22%) that use social media marketing said they used paid Facebook ads, and far more said their free company page was their most effective social media marketing program. Free Facebook company pages remained the top social tactic overall, and indeed, Facebook has dramatically improved company page features, with robust review and messaging integration.

Over three-quarters of all the 2018 respondents said they would either maintain or increase their social media marketing budgets, making it the top category for spending increases among the six we asked about, just like last year. Just under one-third (28%) said they would increase social media spending significantly.

We’ll continue to monitor these patterns, and we’ll be surveying multi-location brands shortly, to see what’s important and effective for their own local social media marketing.

Meanwhile, it appears that most local marketers continue to embrace social media and Facebook in particular. Suppliers of marketing technology and services should find ripe opportunities in helping local merchants improve the effectiveness of their social efforts with reputation and review management, and ROI and/or attribution measurement. Since customer acquisition still outpaces marketing objectives that are lower on the funnel, like conversion, retention, and service, suppliers can assist SMBs in integrating social media programs with other tactics like email marketing and local website operation.

David Card is Street Fight’s director of research.

Click here for a free copy of this year’s State of Hyperlocal report.