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Australian Brands and Social Media

How small, medium and large businesses in Australia are using social media in 2017

More people are using social media than ever before, but there is a glaring disconnect between the ways consumers and businesses are using social media in Australia.

The 2017 Sensis Social Media Report revealed record numbers of people are using social media to connect with brands they love, yet social media use is declining among Australian businesses.

The 2017 report has for the first time incorporated an exclusive chapter on business social media trends, providing valuable insight into how small, medium and large businesses are using – or not using – social media.

We’ve analysed the report to provide you with insights into what’s driving these trends, and how your business can gain a competitive edge on social media.

Snapshot of Australian businesses with a social media presence

Big business is leading the social media movement in Australia, and 6 in 10 large businesses (60%) are using at least one social network. But that number has fallen quite dramatically since 2016, when 79% of the large businesses surveyed used social media.

Of those still on social media today, only 42% of large businesses are optimising their online reach using paid social media advertising.

Social media presence has dropped among Australia’s small (47%) and medium (49%) businesses too.

With the declining organic reach of social media, paid advertising has become a necessity to effectively reach and grow audiences on platforms like Facebook. But the report revealed only one quarter of the small businesses on social media are investing in advertising, along with 37% of medium business.

As for businesses without a social media presence, 40% of the large businesses not on social media today had been in the past, as had 8% of small businesses and just under 1% of medium businesses.

These figures are a startling contrast to the consumer behaviour report, which revealed 8 in 10 Australians are now active on social media including 99% of 18-29 year olds, and 96% of people aged 30-39. Of that age group, 41% use social media to connect with brands and businesses. And three quarters of all consumers indicated they were more likely to trust a brand that interacted positively on social media. Unfortunately, without a social media presence many Australian businesses are just nowhere to be seen.

About the businesses using social media

The hospitality sector is the most socially savvy, with 70% of Australia’s cafes, restaurants and accommodation providers now on social media.

Other industries with an above average representation on social media include Cultural Recreational and Personal services (66%), Retail (58%), Communication, Property and Business services (58%) and Wholesale Trade (53%).

The bottom performers were Transport and Storage businesses (27%) – down from 38% the year before, and Finance and Insurance services (32%) down from 41% in 2017.

This indicates Australian businesses are switching off social media, probably due to lower than expected reach, ROI and ultimately sales. Which is why it is so important to understand how to maximise your online presence and make social media work for your business, in any industry. 

The highest use of social media among small and medium businesses is occurring in the Northern Territory (55%), followed by New South Wales (51%) and Queensland (50%). Less than half of small and medium businesses are using social media in Western Australia (47%), Tasmania (45%), Victoria (42%), ACT (39%) and South Australia (36%).

There is very little difference in social media presence between regional and metro businesses, at 47% and 46% respectively. In the previous year, regional businesses had a higher rate of social media use with 51% uptake, leading their city counterparts by 5 points. 

Social media channels used by Australian businesses

Continuing to be the platform of choice, Facebook is used by nine of 10 businesses with a social media presence. LinkedIn is the second most used platform overall, but it’s more popular with large businesses (82%), over their medium (41%) and small (35%) counterparts.

Instagram is being used by four in 10 medium businesses, compared to just 20% of both the small and large organisations, and Twitter usage grows with business size, from 24% of small businesses to 36% of medium and 55% of large businesses.

The survey revealed very little uptake of other social media platforms, with only 16% of small businesses on Google+, 11% on YouTube, 4% on Pinterest and 1% on Snapchat.

This is perhaps surprising, considering the Sensis consumer report revealed Australians are significantly increasing their time using video-based platforms, with 51% of Australians now regularly using YouTube, and some users spending up to three hours per day on Snapchat.

Businesses switching off social

The use of social media among Australian consumers grew 10% in 2017, to 8 in 10 people. But the social media presence of businesses has dropped since 2016, by as much as 19% among large business, prompting us to question why they’re switching off.

The Sensis Social Media Business Report found more than half of all small and medium businesses, and four in 10 large businesses, do not have a presence on any form of social media.

Of those, nine per cent of the small businesses and 11 per cent of the medium businesses said they hoped to start using social media within the next year. But none of the large businesses had these intentions.

The most common reasons large businesses gave for not being on social media, was the belief it took too much time (70%) and they couldn’t see any benefit (65%). Almost half (48%) admitted to not understanding social media, while 43% were afraid of having a visible public rating system. Five per cent of small businesses felt being on social media was ‘too risky’, while 3% said it was too expensive.

Overwhelmingly, these figures show a majority of Australian businesses still do not understand the capabilities of social media as a marketing or sales tool, and they’re missing out on the opportunities, customers and profit it can provide.

Importantly, Australian businesses need to realise they don’t need to manage their social media marketing themselves, and engaging a professional social media manager and content developer with digital marketing experience is the best way to get the greatest results from their social media investment.

Why businesses are using social media

 Of the businesses that are on social media, most are using a mix of written content, images and videos.

We know Facebook posts with images see almost 2 ½ times more engagement than those without, yet 30% of small businesses post exclusively written content on social media.

Similarly, 34% restrict their social media posts to either photos or images, which fails to take advantage of the benefits of content marketing.

The leading reason for maintaining a social media presence was advertising or promoting a business, followed by acting as an avenue for customer contact and interaction. Surprisingly, only 4% of small businesses are using social media to actively increase sales and only 7% of large businesses use social media to drive new business and grow their customer base.

Discounts and giveaways were identified in the consumer report as the main offering customers want from businesses and brands they follow on social media. These reasons topped the chart at 54% and 48% respectively, up from 41% and 30% last year.

However, only 17% of large businesses are offering incentives to consumers via social media, along with 25% of medium businesses and 29% of small businesses.

The report also revealed small and medium businesses need to pick up their act when it comes to engaging with and responding to followers on their social channels. Only 51% of medium businesses and 61% of small businesses engaged with people who provided reviews or ratings on their social media pages, compared to 93% of large businesses. 

Marketing and advertising on social media

The rate of paid advertising on social media has increased among SMBs, but dropped 20% among large businesses.

A vast majority of businesses paying for social media advertising are doing so on Facebook, and 100% of large businesses that did advertise on social networks found it effective, compared to 74% of medium and 69% of small businesses.

Bigger organisations are also showing interest in other platforms, with 24% of large businesses advertising on Twitter and 20% on LinkedIn.

Annual budgets for social media investment have dropped across the board, and one quarter of small businesses now have no budget for social media spending at all.

Two out of every 10 small businesses using social media only have up to $500 per annum to spend, while 80% of large businesses are spending less than $5000 a year. This figure is significantly lower than five years ago, when the 2012 Sensis report found large businesses were spending an average of $100,480 on social media per year.

Interestingly though, a majority of these businesses now allocate more than half of their annual marketing budget to social media, investing in advertising (54%), strategic management services (24%) and content services (22%). 

Managing social media channels in business

Most Australian businesses are continuing to manage social media internally, with small businesses being the most likely to outsource social media management (8%).

Seven in 10 small business owners manage their own social media, compared to just 10% of large business owners, who are more likely to enrol the help of their marketing department (85%), up from 53% the year before.

Daily social media updates are increasing among all sectors of business, and 88% of large businesses now post on social media everyday, up from 65% in 2016.

This reflects the response to growing consumer demand for social content, with 59% of Australians now using social media daily, and more than a third checking their newsfeeds at least five times a day.

Interestingly, the report shows almost 50% of small businesses are only posting content on social media once a week or less, while 4% of medium businesses and 3% of small businesses never update their social media channels. It comes as no surprise then, some of these businesses are not achieving their sales and marketing goals.

How businesses measure the ROI of social media

One of the most important elements of social media strategies for business, is to set clear and measurable goals. This can include specific social media elements like page likes and engagement on posts, but should also measure leads, conversions and sales in real terms.

Facebook’s inbuilt analytics and marketing tools provide businesses with this capacity, but according to the figures, many businesses are missing the mark when it comes to measuring their social media success. Only 33% of large businesses, 20% of medium businesses and 23% of small businesses analyse their performance, so most Australian businesses aren’t measuring their ROI from social media at all.

Of those that do, eight in 10 large businesses determine their ROI on the number of responses they receive on social media. While 95% of large businesses and 52% of small businesses measure their success based on the number of likes and followers.

This fails to provide insight into how many of those responses and followers are being converted to paying customers, or whether they’re positive or negative interactions. Vague or irrelevant measuring could be further contributing to the downward trends revealed in the 2017 report.

Future plans and expectations

Perhaps many of the holes in the performance of social media efforts among businesses can be explained by poor strategic planning. The 2017 Sensis report revealed only four in 10 SMBs have a social media strategy in place, compared to 90% of large businesses.

And if the figures are accurate, perhaps not a lot will change, with a vast majority of businesses expecting to maintain the same expenditure on social media in the year ahead. Medium businesses (39%) were the most likely to increase their social media investment.

Three quarters of medium businesses also believed social media could contribute to an increase in sales, while only 53% of small businesses and four in 10 large businesses shared this enthusiasm.

Overall the report demonstrates some Australian businesses are turning their backs on social media because it isn’t working for them, yet the figures clearly show us why.

Lack of strategic planning and advertising investment, failure to set targets and measure performance, and a lack of professional knowledge and experience in content development and social media management are all contributing to the downfall of this digital marketing tool.

While those businesses that are dedicating sufficient advertising budgets, setting measurable goals, and engaging the expertise of trained staff or external agencies to manage their social media marketing for them, are more likely to experience greater success in converting those virtual likes and thumbs up to paying customers and real dollars.

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