For many small businesses, trying to make effective use of social media is like trying to capture lightning in a bottle, as costs rise and the algorithms shift too fast to keep up. But the marketplace is beginning to shift, with more small businesses turning away from digital agencies and big platforms, to influencers and small niche platforms.
The co-founders and co-CEOs of QBSleeves Inc., a two-year old company that makes Go-Be germ-fighting airplane tray covers, can attest to the big-social trap. Like so many fledglings, the company hired a digital media agency in 2021, to place display ads on Facebook, Instagram and Google. The goal: to accumulate data on travelers for market research, and convert click throughs into new product sales.
In theory, the strategy made sense, but in practice the return on investment was abysmal. “Looking back we think the investment was a complete waste of money,” says Barbara Booth, co-CEO of QBSleeves noting the company spent $50,000 on the five-month campaign and made $17,000 in revenue. The ads generated just 298 orders, and the data on the customer audience wasn’t as thorough as the agency promised, she said.
“We were just a small fish in a big pond,” adds co-CEO Cornelia Quinn. “We were competing with F500 companies with large social media marketing budgets for the agency’s attention. We even had to create the display and banner ads ourselves for them to post.”
The Problem: The Platforms’ Rapid Change
There are now over 4.62 billion users worldwide that spend about two-and-a-half hours a day on messaging apps and major platforms such as Facebook, Instagram, YouTube and TikTok, according to the Digital 2022 Global Overview Report. These social media giants have incredibly sophisticated algorithms and are constantly churning out a dizzying array of options for companies to capture audience attention. Even many digital agencies can’t keep up.
Through trial and error, QBSleeves founders learned that marketing success on social media can be done more effectively with their own organic ads shot on a smartphone, and posting them on the company’s Facebook and Instagram accounts. It allowed them to control the narrative, build brand awareness and study insights in real-time rather than waiting for an agency to produce a weekly or monthly report. And the cost is minimal: as little as $1 a day. No more contracts. The more they spend, the wider the reach.
In addition, QBSleeves hired Julia Randall, a travel influencer with a 5 million following on Instagram and TikTok combined to expand their social reach. She will create one video a month to post on her StaysandGetaways Instagram Reels in-feed and on Instagram Stories with a swipe-up link to buy. She is also creating two images a month to post on the Go-Be social channels.
“We’ve budgeted $1,000 a month for influencer marketing,” says Booth and that may increase once the company sees positive results. The first images will be posted next week.
Startups Waste Big Dollars On Social Media
QBSleeves’ experience is not uncommon. According to Marie Berry, chief marketing officer for TheVentureCity, a $150 million pre-seed fund, 40 cents of every dollar startups raise in venture capital is now spent on social media marketing. “It’s a trap for early-stage companies to pay so much of their operating budget on this,” she says. “Social media advertising is not as effective as it used to be; it’s gotten harder to compete and be visible and build a brand in this crowded space. That is one reason why venture capital funds including Khosla Ventures, Mayfield Partners and VentureCity have hired CMOs to help portfolio companies navigate the social media landscape.”
Statistics tell the story. Spending on social media ads jumped 17% year-over-year to over $150 billion in 2021, with social ads accounting for about a third of total digital spending, data from Statista reveals. Meanwhile the cost of acquiring social media CPMs jumped nearly 22%, with advertisers paying an average of $9.13 for 1,000 social media ad impressions during the fourth quarter of 2021, according to data from Skai. This year it’s expected spending will continue to grow in the double digits.
Considering the uptick in costs, it’s gotten harder for small businesses to compete with their larger brethren on social media. Despite the obstacles, 96% of small business owners are using social media as a marketing tool, Fundera reports.
But the rules of the game are changing, and entrepreneurs need to keep abreast of what works so they can develop the right social media action plan. Leading marketing experts in the field offer these five tips to boost the odds of success.
1. Set clear goals
Many digital ad agencies cater to large corporate clients so pick one that’s the right size for you. Go in with a clear brief of what you want to achieve with set goals and time targets.
“Many times entrepreneurs just have a general idea of what they want to accomplish and that doesn’t yield good results,” says Katie Hankinson, senior vice president of The Sasha Group, a mentoring and marketing company launched by Gary Vaynerchuk under the VaynerX umbrella.
2. Build your brand by being authentic
Audiences are now looking for authenticity. Social media ads need to allow consumers to engage in the brand’s content more meaningfully. These days they are keen on supporting brands that have purpose and are helping local communities.
“You can’t just be a brand that wants to make money,” says Booth noting that QBSleeves’ Go-Be airplane tray cover is made of recycled plastic and gives a portion of profits to Ocean Conservancy. In addition, it is committed to hiring a neurodiverse workforce for its fulfillment operations since adults with autism have an 85% unemployment rate.
“Try to encourage sharing and testimonials about your product and service that feel true to your brand,” Berry suggests. “Make your posts conversational to better connect with your followers.”
3. Be a master storyteller
Entrepreneurs can leverage their own personal brand to document the story of their business and talk about the experience of being a founder on LinkedIn and other social media platforms. “This can really help you network and get partners and leads,” say Hankinson.
But the story telling has to be consistent with regular posts. Be creative by using a variety of formats, say marketing experts. For example, you can include a visual story with on your Instagram profile, or create a tweet thread that highlights the main concepts of a blog.
“Don’t underestimate the power of the individual brand and how important it is to build out your personality on TikTok and other social media platforms. It’s a way to get high levels of viewership without having to pay,” Hankinson notes.
Above all, keep in mind social media is a two-way dialog between you and your followers so be sure to respond to any question or comment they make, experts concur.
4. Use influencers to tell your story to your target audience
Influencer marketing provides a great opportunity for brands to partner with people who have large, trusting audiences. When done authentically and well, the influencer’s audience takes action on what he or she is promoting.
“Make sure the partners you work with are aligned with your brand to improve the chances of a successful campaign and relationship,” points out Matthew Clunan, senior director of global brand marketing and subsidiaries at Fiverr.
QBSleeves used this approach. It hired Randall because she inspires travelers to venture out and explore the world safely, a mantra for the Go-Be audience.
Alan Sternberg, co-founder and CEO of Beams Technology, agrees. His voice note social network is a platform for influencers and opinion leaders to build their community through 10- to 90-second audio content they can send to their followers on Instagram, Twitter and other social media outlets. “These days it’s often better to invest in brand ambassadors who can build your community then conventional ads.”
5. Look for the right platform mix
Keep an eye on what social media platforms you want to market on, realizing there are many smaller niche platforms that can get you organic reach without having to spend too much money. They range the gamut from Wayn, a social network focused on travel to Dribble, a network for designers. In contrast, large platforms have very sophisticated algorithms that can target market, but it’s a pay-for-play model that can be costly. And these change all the time so putting all your eggs in one basket is risky, social media markets warn.
Instead, choose platforms where your audience is located and that are specific to your content type which can include display or banner ads, photo posts, video, podcasts and long-form blogs. It’s best to do due diligence on each social media platform to see what they offer small business customers and at what cost.
6. Use metrics to measure effectiveness
Berry recommends that small early-stage companies spend 10% of their gross revenues on social media advertising and marketing. “That can increase over time but initially, companies need to be cautious,” she says.
There are a number of ways you can measure a campaign’s success. Those that have a clearly defined objective will be easier to measure and learn from. Take what has worked and build on that to drive desired results, she says.
Hankinson recommends entrepreneurs establish a benchmark on how many engagements or leads they want to procure from a given campaign. “It can be a proxy for people’s interest in your product or service. These days social media is being used more for brand building than anything else. It’s a long-term effort that needs commitment.”
This story and others on Times of E are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.