Small Businesses Want to Get Social, Too

There has been lots of talk of social networking penetrating the enterprise, but what about the little guys? According to research from AMI-Partners and analyst Nikki Lamba, the uptake of social networking by small businesses is set to double over the next year. In fact, research shows that 600,000 small businesses, (companies up to 99 employees) plan to deeply integrate social networking services in the next 12 months. That number is up from 300,000, which is approximately five percent of the total number of small businesses (SBs) in the United States. Lamba's research on social networking is part of a larger AMI-Partners report entitled "U.S. Small Business Overview and Comprehensive Market Opportunity Assessment."

Lamba writes, "SBs form an emerging audience for social networking services. While the proliferation of these services among the general public has been extraordinary, SBs remain a largely untapped opportunity - what could amount to a small boon for those willing to seek them out during these troubled times." Social networking opportunities for small businesses come in several forms. For one, social networking services such as LinkedIn are beginning to cater to small businesses and entrepreneurs by creating network branches for small organizations. The designated social networks allow small business owners and employees to communicate, share knowledge, and collaborate on projects. A second opportunity for small business involvement in social networking rests in advertising. In fact, Lamba's research states that over the next 12 months, about 500,000 SBs will use social networking as a marketing resource and brand differentiator.

Interestingly, IDC Research recently issued a survey indicating that social networking users are not as apt to respond to marketing on social networks as they are on other Web sites. Lamba says, however, social network advertising still could be an area of opportunity for small businesses. "Although social networking as a resource for advertising and promotional activity is growing slower than people expect, it's still experiencing growth and will be an area to keep track of as social networking platforms evolve, and more specialized services emerge for SB owners," she says.

Given the state of the economy, Lamba writes that social networking is a relatively low cost solution that could help in fostering, "steady communication with existing partners, and clients as well as incubating new relationships" -- a function both desired by consumers networking with friends and with employees in the workplace. The aforementioned IDC social networking survey, in fact, indicates that the majority of social networking users list communication as their number one reason for usage of such sites.

The influence of the consumer Web on business adoption of Web 2.0 technologies is rapidly unfolding. Hence, even large CRM vendors are giving nod to consumer-oriented applications. Take, for example, Salesforce.com's November announcement of bringing together the Force.com platform with social networking site, Facebook. The consumer Web and the corporate Web continue to blend - and within the small business arena is no exception. "As consumers, many of these small business owners and managers themselves participate in social networking sites and are keen to use the technology for their own business growth," Lamba says.  

The analyst does point out that a small business is, more often than not, seeking a social networking solution that caters to its specific needs. The more tailored the solution, the better, she says - meaning that a small business provider of cat food is more likely to participate in a networking site about feline health than it is in a broader, and less-targeted social site.

Security issues are at the forefront as organizations look to social networking outlets for business usage. Although it is a concern to a certain extent, Lamba says, it does not affect smaller businesses the same as larger enterprises and should not prevent adoption. She points to different reasons as barriers to adoption: "Some of the factors preventing small businesses from adopting social networking include lack of awareness and finding a service that is relevant to their company's needs." In fact, Lamba states that an SB's decision-making process is much simpler than an enterprise. "They are also much less risk-averse than that of large enterprises," she says. "As a result, small businesses will adopt social networking much faster than large enterprises."

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