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As Local Businesses Become ‘Social Media Mavens,’ Reliance On Mobile Ads Rises

More than half of local social media mavens buy geotargeted banner ads, but just 33 percent of them use mobile advertising, according to Borrell Associates.

Over the last five years, social media has gained a strong foothold among local businesses who view the immediacy, ROI/analytics access, and relatively low cost versus traditional ad forms as the best way to generate leads.

As those trends have become permanent, a Borrell Associates survey of  7,564 local U.S. businesses shows a clear impact on ad and marketing strategies even as some disconnects remain among some brand categories.

For example, while 85 percent of respondents say they have a presence on at least one social media channel (i.e., Facebook in the majority of cases), 44 percent consider those sites to be a significant driver of new customers — and as a corollary, 56 percent said they do not consider social media to be a major pathway for attracting new shoppers.

Health Care At The Crossroads

To put all that in context, social media is considered third most important driver of new business after referrals (66 percent identified it as the number one way to pull in new customers) and a company website (47 percent).

When it comes to unpacking that 85 percent stat on social media presence above, 95 percent of auto dealerships and franchisees both say they maintain a profile on one or more sites, while 91 percent of restaurants and retailers say the same.

About 84 percent of healthcare businesses have a social media profile. It’s this area that seems most primed for growth — if social media platforms and vendors can convince them of the efficacy of a social media presence. In a sign of how  healthcare businesses may be outliers among other local marketers, wellness providers were the least likely to buy social media advertising, with 29 percent not participating at all, Borrell says.

It’s hard to say what’s held healthcare local marketing back, but one reason could be the changing nature of the landscape amid the Affordable Care Act, which has upended the way doctors and other providers reach new patients. Aside from that, healthcare providers are also plagued by a lack of listing accuracy online, a problem that is likely at the top of these businesses’ list of things to tackle before embarking on a social media strategy.

Local Social Media Mavens Emerge

As part of its study, Borrell zoomed in on the 3,293 businesses (44 percent of all respondents) who selected Social Media as being among their “best sources of new customers.”

Social media mavens spend roughly 11 percent more on advertising ($117,519 annually) than the average local business ($105,595). Interestingly, Borrell finds that businesses that are heavily invested in social media activity tend to be “smaller, older, independent companies with less than $1 million in gross sales.”

They’re more likely to have a single location or be home-based than have multiple locations, and slightly more likely to cater to consumers (B2C) versus only businesses (B2B).

At the moment, these businesses tend not to rely on mobile ads — just 33 percent say they buy mobile banners — but that could be about to change. As 40 percent of these businesses expect to cut yellow pages and newspaper ads, 68 percent plan to start buying or increase mobile ad spending.

“Social Media is transitioning quickly from being a mostly free to mostly purchased marketing tool,” Borrell’s study notes. “Two types of news stories will emerge: Advertisers who realize Social Media works best as part of a media mix (not solo), and advertisers who begin to realize that a large percentage of those views, likes, and shares are coming from people who would never be customers.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.