social media researchAre you wondering how other businesses are allocating their social media activities in relation to other marketing tasks?

This article reveals the findings of a few new research studies. What they found might surprise you.

Small Business Focusing Big Time on Social Media and Blogging

Small businesses are spending three times more on social media and blogs than larger businesses.

In HubSpot’s 2011 State of Inbound Marketing Report, researchers discovered that small businesses plan to spend 29% of their lead generation budget on social media and blogs. Asked the same question, medium to large businesses only plan to spend 9% on the same categories.

cost per lead

HubSpot‘s conclusion: all marketers are increasing their lead generation budgets for social media and blogs. In fact, the average company increased their spending from 9% to 18% between 2009 and 2011.


The HubSpot report has many more important insights on acquisition rates and comparative data on various industries. Check it out here.

Social Media Spending Trending Up

64% of all marketers plan to increase their social media budget in 2011 according to Target Marketing’s Fifth Annual Media Usage Report. Email marketing is the only area where more marketers will increase their spending.

target marketing

Email and social media are becoming rivals for acquiring new customers and customer retention:

  • Email – 85% of marketers use it for acquisition; 90% for retention
  • Social media – 75% use it for acquisition; 65% for retention

No-one belittles our current economic crisis. That’s what makes these trends even more interesting.

In a day where many marketing budgets are frozen, marketers are allocating an increasing portion of the pie to social media. Some might say they are panning for gold, but I think the signs show that they’ve already found some gold.

Match Social Media Spending to Your Experience

All businesses should consider their social business maturity as they establish priorities and their social media budget. This is Altimeter Group’s conclusion after conducting a study of 140 social media strategists at enterprise-level corporations (1000 employees or more).

While the data is derived from large companies, the principles recommended apply to businesses of all sizes. See which of the following strategies match your needs and priorities for 2011:

altimeter group

What about you? How do these reports get you to look at your plans for 2011? How do your social media spending plans compare to these trends? Leave your comments in the box below.

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  • Hi Phil,

    There may be some ‘method to the madness’ of larger firms not budgeting.

    Many SMBs are B2C whereas larger enterprises are B2B.

    While there are benefits to using Social Media, I can see why their still holding back… at least for now.


  • PhilMershon

    Good point, Ivan. I would say that in our market we see the split between B2B and B2C to be 50/50, no matter the size of the business.

  • Hey Phil, thanks for the numbers. I have this report in my “2read” folder but I can’t just find some time to explore it, and that’s my mistake.

    In fact, being an owner of a small Facebook Templates store, I already feel how small businesses react to todays trends. More and more people are contacting us for consulting, so I’m actually thinking of hiring a couple “social media experts” to handle the quickly growing volume of customers! 🙂

  • PhilMershon

    I’m glad I could provide an overview for you. Your experience seems to track with the actions of many small businesses.

    I liked what Kevin Heaps of Verizon said yesterday at Social Media Success Summit. He said that social media is the great equalizer and that even big brands need to act like small businesses. People are people and they engage social media individually, not as crowds (even though we can certainly see crowd sociology at play).

    Thanks for your comment!

  • Wow! Thanks for this awesome quotation! Saved it 🙂

  • PhilMershon

    It’s not a direct quote and I added some “Philisms” to it! 🙂

  • Yeah, I’ve noticed that as there were no quotation marks 🙂 Yet the idea behind this “quote” is really interesting!

  • I like the info, however, I’m dealing with one-person, one-product companies. The graphs seem to speak to businesses with some employees, not the lone eagles who struggle to keep up and often outsource social media (when perhaps they shouldn’t). I’d love to see stats on service biz vs. product biz in SMM. As a consultant to fledgling entrepreneurs, that would really speak to me. 

  • Thanks for sharing these statistics, Phil. This validates what I’ve been thinking for several years. Small business owners and solopreneurs (who form the lion’s share of my clientele for social media services) usually work on a shoestring budget. They quickly discover that blogging and social media marketing is one of the least expensive and most effective ways to acquire and retain customers.

    I’m glad you included the graph that depicts trends in many areas of marketing, because a trap some business owners step into is assuming they can do JUST social media marketing. That may work for some, but I recommend that business professionals consider social media as one component of their marketing plan.

  • Eric

    It is what I’m doing or dealing with as well fingersfly, good to see its not just me. As a one person sales company selling for another company, I would like to see that as well.

  • PhilMershon

    You make a good point fingersfly. I think a lot of readers on SME are in your situation–either consulting with small biz or the owners. I’ll see what research we can find. Perhaps there are some researchers reading this who would like to take up that charge?

  • PhilMershon

    Thanks, Eric.

  • PhilMershon

    Laura, I’m glad you brought up that point. Social Media Examiner focuses exclusively on social media marketing practices, but that doesn’t mean that’s the best or only means of marketing. Email marketing, as this data shows, is still very effective. And clearly people continue to find value even in offline marketing. At the end of the day, I think we have to figure out where our customers are and to grow a loyal fan base. Social media provides a great opportunity for doing that, but so does content marketing, relationship marketing and many other forms of marketing.

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  • Hello Phil. Thanks for this very interesting article.

    I’ve read the HubSpot report. Very interesting. I also noticed that 76% of the sample consists of B2B companies. It would be interesting, like Ivan mentioned, to see a report broken down by B2C and B2B. Although the sample is small for B2C (n = 161) and the reliability of results decreases, a split by B2C and B2B can indicate the extent to which B2B and B2C businesses show different inbound marketing trends.

  • PhilMershon

    Thanks Juan. I will pass that feedback to our friends at Hubspot.

  • That first fact really grabbed me – that small companies plan on spending more on social media than big companies.  Seems like the small companies are seizing the opportunity more than the big ones.  

  • hi… its very nice blog and i think its very useful for me. Thanks!

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  • PhilMershon

    That certainly matches what we found last month when I reviewed the Social Media Marketing Industry Report – small businesses are getting more value from SMM. It that’s true, then they would also spend a higher percentage of their budget.

    It would be interesting to know among larger companies if Kevin Heaps’ theory is true: that big brands must act like small businesses when it comes to social media.

  • PhilMershon

    Thanks, Jassica!

  • Interesting results. A few observations from me to supplement what some other readers have shared:

    1. Blogs are a form of social media, so I’m not sure why they’re referred to separately. That begs the question of what exactly is meant by “social media” in these studies. Conceptual clarity is key to interpreting the results. 

    2. I’d be careful about interpreting the first set of results as indicating small businesses are spending more on social media and/or value it more. Because of the easy scalability, larger businesses don’t necessarily have to commit more resources to achieve a comparable impact. More importantly, their overall budgets are much larger, which could easily account for the lower percentage. Taking these percentages at face value without putting them into larger perspective is unwise.

    3. What was most telling to me about the Target Marketing results were the percentages of “do not use” responses, which were huge with respect to several traditional forms of advertising media. I’d love to see year-by-year comparisons for some of these numbers if they’re available. The trends over time don’t get enough research attention (we tend to focus on snapshots), but knowing where we’ve been can significantly increase our understanding of where we are and where we’re going.

    Courtney Hunt
    Founder, Social Media in Organizations (SMinOrgs) Community

  • As far as increasing the budget for social media, things like Facebook and Twitter are pretty much free, apart from employees’ time spent using them. Does this time account primarily for the increase, or are companies turning more toward paying for social media management as part of a comprehensive SEO strategy?

  • PhilMershon

    I appreciate your careful attention to the details. Not sure I can help with #1 as I didn’t write the research and I don’t think they clarified that distinction. However, I do think you can make a distinction between social media and blogs in that a blog can function much more like your website (and often times is your website). A blog is also primarily a place for posting content. While people can engage with you through your blog (as you’re doing with me here), people are much more likely to engage with the addition of social media tools like Facebook, Twitter, LinkedIn, etc… That’s my take on the distinctions.

    As for #2, that’s a good point. There is a scalability factor that allows large corps to do this cheaper (but there are probably a lot of hidden costs in both sizes of firm that skew the data –like employs who use social media for marketing, but it’s not what they’re paid for; and/or the small business owner’s time)

    #3 – I agree. Especially in this world of marketing and social media, everything seems to happen on a very short time horizon. Of course, there’s not a long history to compare at the moment, but we need researchers to keep a longer time horizon in view, esp. as this industry matures.

    Thanks for your comments!

  • PhilMershon

    I think they are factoring in the salaries of employees, graphic design as well as management services (which many companies are relying upon increasingly).

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  • Ben Comer

    fingersly- you bring up an excellent point about the 1 person, 1 product businesses that either don’t understand social media or struggle to consistently use it. As you mention, these businesses often outsource these responsibilities. In some cases outsources is the right option but that all depends on the needs of the business owner. Fortunately there is new technology in the market that allows businesses to update their social media through e-mail. That way business owners can control their content while using a technology they are quite familiar with. 

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  • Interesting facts! It’s not a surprise to know that businesses are shifting into a more effective, free and new channels (social medias) as part of overall marketing plan to invest in to attract new customers. It’s a smart move to use social media to reach a wide range of potential customers.

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