Is Social Media Worthwhile For Local Businesses?

In the past few weeks, I’ve been confronted multiple times by the question of whether social media is truly worthwhile for local businesses. The question comes from companies feeling the pinch of costs while also desiring to promote themselves adequately. The ROI may not be clear in many cases, so let’s examine it.

First of all, businesses have been propelled toward being involved in social media because marketers are attracted to any channels or arenas that large swaths of consumers gravitate to. As the usership of various social media services has grown, the rule-of-thumb is that their worth as a promotional vehicle has grown as well. Advertisers want eyeballs.

Where Are The Eyeballs?

According to Experian Hitwise, Google and Facebook are both the top websites in terms of number of visits:

Top 10 US Websites b Total Visits - Google, Facebook, Yahoo, YouTube, Bing, AOL

And, according to comScore, users have been spending a lot more time in Facebook, too:

Average Monthly Time Spent on Google vs Facebook per visitor in the U.S.

Does Social Media Have Value?

No one particularly questions the value of Google as a source for customer referrals to businesses; (although, some debate the ROI of PPC advertising for some companies/industries), however, almost everyone wants to be found in the organic search results to one degree or another. And, Facebook is clearly right up there in its volume of visitors.

Of course, just the fact that a service has a huge audience doesn’t automatically equate to worth in business promotions. For instance, a video game service isn’t going to be as worthwhile as a search engine where people are trying to research products and services, selecting the companies that provide them.

So, there’s a valid criticism that some social media services and the activities taking place on them will not lend themselves to some types of business promotions as readily as for others.

What Are The Gripes?

Most of the conversations I’ve had with those questioning the value for small businesses center on criticisms around a few common gripes:

  • No sales. They don’t see direct sales arising from social media activities. Most people are not using Facebook or Twitter to find products or services, so there’s no purchase intent involved.
  • No traffic. Their analytics are not showing much direct referral traffic from social media services.
  • Work invested in social media is like “sharecropping. You can put all that time and effort into some services, and the content is “owned” by them, and the value can evaporate at the whim of the social media companies. For instance, quite a number of companies developed large audiences on Facebook only to recently have those audiences “held hostage” when Facebook last year began demanding advertising payments in return for exposing new status updates to followers of business pages.

Are The Gripes Valid?

From my perspective, these criticisms are sometimes skewed and are not showing a complete picture.

First, the “sharecropping” metaphor seems like a straw man argument to me. Quite a lot of promotion work is ephemeral in nature, providing benefit for only a limited period of time. Just because it could evaporate tomorrow doesn’t negate its worth today. For that matter, you could build your shop in a particularly popular neighborhood only to have highways change and traffic directed away from your district. Point is, there are risks involved with business and promotion channels, but we don’t close down and go home because of it.

It is valid to consider that your business might not see sales and website traffic directly from your activities on social platforms. Although, this is by no means a foregone conclusion. I had a client in an esoteric service industry just a few weeks ago who thanked me profusely for recommending Twitter to him, because he immediately gained a new customer who found him due to his Tweeting activities.

While my client’s target demographic is well within that of Twitter users (he caters to technologists), all sorts of businesses can gain clients from their social network promotions to some degree, if they know what they’re doing. Merely spewing self-referencing mentions or a barrage of ads is probably going to result in irritation for the social audiences and frustration for the business owner who sees no ROI arising from the effort.

Those complaining of lack of sales and site traffic might not be doing effective social promotion work to begin with. As Derek Edmond points out in his article on How B2B Marketers Can Develop A Better Social Media Plan, it can take a while for a company to learn how to use a social channel properly and to promote through it — over 50% require from seven months to four years to “get it”!

So, if you’ve experimented around with a social platform for only a few months and throw in the towel, it’s possible you haven’t given yourself a chance to master the medium.

Indirect Benefits Of Social Media

But, even if a particular social platform doesn’t lend itself to your business through sending traffic or sales prospects, there may be substantial indirect benefits that should be taken into account. Here are the main ones:

Search Engine Optimization (SEO)

Social media activities provide signals that can help sites rank better. Google and Bing have both acknowledged that they’re now using social activity signals in the mix. While we don’t know the exact methods they use, it doesn’t stop us from integrating social media work in order to extract ranking value.

With 200+ ranking signals in an algorithm, it’s difficult to isolate the influence of any one factor, but I’ve seen enough anecdotal evidence to believe good social media development over time does, indeed, provide some ranking benefit. Particularly if your competitors are not doing it.

There are only a handful of “prominence” signals that we’re certain of — external links, citations, business listing interactions (clicks on maps, driving directions, clicks to website), frequency and volume of user ratings and reviews, and — social media interactions. Do you think you can afford to throw away one of those?

Proactive Online Reputation Management (ORM)

Being involved with a few of the more popular social media services provides a level of insulation from attacks on your reputation. The profiles of social media sites and status updates or other activities on them can rank in Google search results, making it harder for any negative webpages to appear when your name is Googled.

Without enough content ranking on your name, any dissatisfied customer, competitor, disgruntled former employee, or random crazy can say something bad about you, and it could appear prominently in search results. So, social media work carries a benefit that’s similar to insurance — if you get hit by a false claim or exaggerated criticism, your bottom line could take a substantial blow.


It’s possible that making your business available through some of the higher ranking social media platforms could be a sign of your relative stature. Not that it’s a status symbol, so much as a subtle signal to consumers that your business is important enough to merit having a presence in places where they “live” online.

Facebook’s rollout of Graph Search for instance, could push users into searching for businesses more. (If you’ve opted into Graph Search, try searching for “restaurants my friends like.” This sort of search capability is ultra-strong for many types of business where endorsements from a consumer’s social circle can heavily influence decisions!)

Being available for this type of search is likely to become more important over time, and signaling that people can communicate with you through the platforms they’re comfortable with is likely beneficial as well.

Social Media Can Be Worthwhile

So, while it’s true that many businesses may not see as direct of a return on social media development work, there are a number of significant indirect benefits that make it worthwhile. This does not mean that a company needs to be involved with every large and small social media platform, and it doesn’t mean that large quantities of time must be spent on social media activities.

Different businesses are going to be more or less relevant to audiences at particular social networks. But, assess the bigger ones carefully: Facebook, Twitter, Instagram, Pinterest, YouTube, Google+, Tumblr and LinkedIn.

In terms of the amount of time spent, there’s usually some amount of time savings if you’re engaging with multiple social platforms, if you’re using good management tools to do it, and if you understand how to go about it.

Just because you may not see direct or immediate benefits fresh out-of-the-box when you begin using social media does not mean that you are not getting some benefit. Over time, the slow accrual of SEO benefit alone may make it a necessity for you, while proactive reputation management and consumer engagement may also be compelling reasons to be present and active.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Local | Local Search Column


About The Author: is President of Argent Media, and serves on advisory boards for Universal Business Listing and FindLaw. Follow him @si1very on Twitter.

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  • Sherwin Ramnarine

    Chris, I think you’ve successfully made me see the light when it comes to B2B social media. I was in the “no direct sales/no ROI” camp, but the indirect benefits you’ve explained here have changed my mind.

  • Jose Miguel Vera

    The article in and of itself is good. However, it doesn’t really answer the question… Should local businesses use Social Media? I get the stats… thanks for that, but all in all they don’t really matter in such a broad scope when you talk about local.

    Is Google used more widely in X Location and Facebook? That might help a business make a decision. Also, not to mention traffic and time on site alone don’t really do much for a business to make that decision.

    The questions that Marketers need to ask themselves before considering doing Social Media for a client is is: What is the business model? What will we get from Social Media? Do we have something that is hot/buzz worthy? If not, can we create something that will turn into 1) exposure 2) backlinks for the actual site.

    Google has bastardized local search, and now more than ever that stands true. Not to mention that Google executives’ bonus depends on the success of G+, Social Media for Local IS worth it. However, it should not just be all the social platforms at once. There must be not just a hot product, but a hot idea behind the product.. Dollar Shaving Club, excellent example.. they have the product, how do we make it cool? Boom! Success.

    I’m personally not huge on Social Media, not because I don’t see value but because I need to work in my SM habits.. but quite frankly, Social Media has become a MUST tool for Local.. without it, it will be very tough/borderline impossible to make an SEO campaign or ORM campaign work… That’s what my experience has been in the last year.

  • Jerry Nordstrom

    Social media is a long term strategy with a strong emphasis on daily upkeep all of which results in performance data that is tough to attribute. That means three things local small businesses fear – Time, Money and complicated reporting.

    If we can keep a client committed to a fully funded internet marketing strategy including social media for 6 months we can easily show them the specific returns social provides in direct conversions and within attribution conversions. (some businesses can generate data faster than others so 6 months is a decent rule of thumb.)

    We have found using G+ and Facebook very rewarding with local in terms of goal conversions and reputation growth. Twitter? Honestly, its there, but has never shown a return worthy of pursuit.

    Local businesses should be involved in Social Media at a minimum to carve out and protect their business names. One client came to us who had refused to conduct social marketing a year ago. Today, a business with the same name in another state consistently offended customers, racked up bad reviews and then went out of business. First page results for this company name is full of SERP titles like “XYZ company Out of Business” and XYZ is a scam. The “bad company” still owns and controls the YouTube, Facebook and Twitter profile names. If you’re a local business do not wait to let this happen to you, because eventually IT WILL.

  • Brian Clark

    You’re mischaracterizing the “digital sharecropping” argument into a straw man of your own. We completely advocate using social media to drive traffic back to a site you own. What we warn against is using, for example, a Facebook page *as your site*. That’s where the problems, and the sharecropping, happen.

  • sharithurow

    Hi Chris-

    I understand social media. I’ve been doing it for many years.

    And I can wholeheartedly say that it is not necessary for every business, no matter how many direct and indirect benefits you mentioned in your article. I know many people will disagree with me.

    For now (because I cannot predict the future), we’ve done the pilot testing. We’ve even done full-scale implementation because the boss said so. And there are plenty of businesses that just don’t need it, or don’t need it on the scale that social media evangelists claim.

    If the decision makers or the people who greatly influence the decision makers do not trust or use social media? I don’t recommend putting the time into it. I’ll monitor for them, of course, in the event it changes. But for now, and I’m bound by NDAs for not being specific enough, I would never say that everyone needs it.

    That being said, your reasoning is sound. I like what you wrote. I should have led, with that, shouldn’t I? My apologies. I’ve liked your writing for quite some time.

  • Chris Silver Smith

    Shari – you are right. There are instances where a business doesn’t get direct sales from social media, doesn’t need the additional SEO value, isn’t likely to have an online reputation issue, and doesn’t need to do customer service interactions via SM. Indeed, I know of niche markets with few competitors, little online referral sales, and particularly B2B companies that experience little issue with online reputation. Those cases don’t need to “keep up with the Jones” by undertaking a heavy social media presence.

    It’s hard to tell what percentage of businesses fall into that category. Hopefully most businesses reading my Local Search columns are trying to find ways to get the edge on their competition, so those are the ones that I think can’t afford to totally avoid a category of prominence signals.

    Thanks for your feedback — I value your comments, pro or con, always. Your advocacy of usability over SEO was industry-leading and clairvoyant!

  • Chris Silver Smith

    Brian, you’re entirely right in warning people of putting all their eggs in one basket. If one invested their entire online presence in one primary social media channel it leaves them far too vulnerable to arbitrary changes and potential loss of the channel.

    I should’ve made it clearer that my beef is with people that use this as an excuse to avoid integrating social media at all. I’ve heard people use that term as a rationale for declining to build anything on social platforms. I didn’t intend to suggest that your site was making that claim — I was linking over to you as an authoritative source that defined the sharecropping term in more detail than I could go into here.

    I should’ve qualified and mentioned that there is indeed a danger involved with putting all of ones eggs in one basket!

  • Chris Silver Smith

    It’s always challenging when a company or individual shares your name or a partially similar name and creates a reputation problem for you! Inevitably you end up doing some reputation repair that benefits the other, undeserving party.


    What a great read, loads of quality info here. The graph search “restaurants my friends like.” will definitely be a big selling point when it comes to persuading local biz owners to go social.

  • kevinjgallagher

    Really well written article, thank you for sharing. I think at the very least small businesses should be listening on social. This doesn’t need to take up more than 30 mins a day.

  • kevinjgallagher

    Yes Brian, But what about the time investment for a small businesses who don’t have the size of network or time like copyblogger or large brands?

  • Dave Thompson

    There has been common “misconception” that Social Media Platforms are meant just for big brands but this article rightly puts the point across.

    Local businesses often think in terms ROI rather than increasing their presence & communicating with the users.

    Social Media when used effectively can provide many indirect benefits as said in the article. Also, Facebook graph search will have phenomenal impact on consumers choice. Exculding the fact that local businesses cannot gain much of sales or site traffic, however, it will affect the ranking of your site in google search results.

    You can atleast reach to your users in terms of queries or problems they have related to your brand or product. Thus, building the Customer Relationship.

    Customer relationship is a forgotten aspect when it comes to local businesses. Remember, It is not just the sales that counts.

  • SEM Consulting

    Social media is important for local business and to attract number of daily visitors through local SEO channels. SEO Consultancy is best to launch local business campaigns.

  • Justin Sous

    First off – such a great article topic, and relatable for those of us with small business clientele.

    I agree and disagree with certain portions of the article. Do I think social media is necessary for all businesses…no. Am I doing it for all of my clients…yes. The reason for this is preparation for the unknown – we just don’t know how much influence Facebook and other social media outlets will have in the future and what “Likes” will mean to a business. Having a strategy for this is not a top priority, but it’s necessary to prepare. The fact is people aren’t going to Facebook or twitter to look for a pest control company or mechanic. If this changes for whatever reason in the future, you’ll be glad you had some sort of strategy to support this.

  • Barbara Mckinney

    Local businesses
    that don’t use social media platforms are missing out on opportunities that
    could attract more customers and help them reach new markets.


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