Cost-conscious small businesses turn to social, search marketing: survey

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A growing number of local businesses, facing tight marketing budgets, are turning to search engine marketing and Facebook to promote themselves, according to a survey from MerchantCircle, a social networking site for local business owners.

Asked to name the top three most effective marketing methods they use or have used, 42% cited search engine marketing, while 36.7% reported creating a profile on a social network and 35.8% cited e-mail marketing. More than one third (34.4%) said they use “other online methods,” while “coupons or direct mail” ranked fifth at 23.9%.

“What we've seen is a steady decline in traditional advertising methods and a real uptick in the adoption of free online marketing avenues,” said Darren Waddell, VP of marketing and product management at MerchantCircle. He added that local business owners “are much more interested in either things they can really measure the results of like e-mail marketing, or things that cost little to nothing and are simple to use.”

Facebook also beat Google as the top website or online service that local businesses use for marketing, with more than 70% of local merchants turning to the social network and 66.2% saying they use Google.

“The appeal of Facebook pages for small business owners is that they're so cheap,” said Jake Wengroff, global director of social media strategy and research at Frost & Sullivan. He added that because of the cost effectiveness and the relative ease of setting up a Facebook page, “I'm surprised that the number is not higher than 70%.”

More than half (55.8%) of merchants surveyed said they have annual advertising and marketing budgets of less than $2,500. Only 6.8% said they expect to increase their advertising and marketing expenditures in the next three months.

The survey received 8,456 responses from US local business owners between January 22 and February 3.

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