New Zealand business getting less social

New Zealand businesses are struggling to find the time for the latest online tools, with fewer businesses than a year ago having a social media presence, using search engines to advertise their business, or maintaining a blog, according to a new study.

The latest MYOB Business Monitor, a regular survey of over 1000 small to medium enterprises, reported that just 20% of New Zealand businesses were using some form of social media – down from 24% in August 2011.

However, businesses were more likely to be using the Internet in areas that were less time-intensive and more functional, such as paying suppliers online or making purchases.

MYOB general manager Julian Smith says that the survey suggests many businesses are interested in social media – and a number have achieved good business results from employing the tools as part of their marketing mix – but have been struggling to maintain an active social media presence in the long term.

“What these results show is that there are some business owners who are definitely interested in the social media space and the business benefits that it provides, but who have not been able to sustain an enduring social media presence,” says Julian Smith. “This suggests that many business owners would probably like to have more of a social media presence than they do, but don’t have the time or the resources to manage a wide variety of online marketing tools.” 

 

Rates of usage fell across all social media platforms, with the number of businesses maintaining a profile on Facebook and Google+ down to 16%, LinkedIn down to 17% and the number of businesses in New Zealand using Twitter falling to just 4%.

“We’ve seen similar patterns in both New Zealand and Australia this year,” says Smith. “After a steady take-up of social media, usage from business has fallen off significantly. For a business owner who might be preoccupied with the day to day challenges of running a business in a sluggish economic recovery, maintaining an active social media presence is clearly not easy.” 

Also proving difficult to maintain were company blogs, with the number of businesses with a regular blog falling to 10%. Search engine marketing has seen a big drop off as well, falling from 33% in 2011 to just 28% today. 

“Much like social media, search engine marketing can be a resource-intensive and time-consuming process for business owners,” says Smith. “It requires specialist knowledge and expertise that is probably not available to many small businesses. We know, however, that the majority of consumers will search online first before choosing a product or service, so this is an area where businesses are missing out if they do not have the time or resources available.”

 

According to the MYOB Business Monitor businesses were increasing or maintaining their use of the Internet in areas that were focused on business productivity and easy-to-use administration tools.

The number of businesses using the Internet to pay their suppliers grew by 5% since August 2011, with 45% now doing so compared to 40% a year ago. Similarly, 44% of businesses were buying products or services online, the same as in 2011. 

“Tools that address the problems of time-poor business owners and make it easier to run a business are more likely to be adopted,” says Smith. “Businesses are focused on their bottom line and make decisions about which services to use based on a cost/benefit basis. Online tools that require large amounts of time and energy are simply not going to pass that test.”

One final area where businesses were increasing their online activity was in the use of email marketing and electronic direct mail. 25% of businesses were using electronic direct mail in 2011, compared to 28% today.

“The growth in email marketing suggests that business owners, especially in tight financial times, are more comfortable using tools they have a degree of familiarity with. We’re seeing more businesses than ever choose to do their marketing via email, be it through regular newsletters or one off product promotions,” said Smith.

 

Levels of social media use differed greatly by age group, with business owners from Generation Y more than twice as likely to embrace the technology as their older counterparts. 42% of Gen Y business owners were using social media in their business, compared to just 21% of Gen X business owners, 20% of Baby Boomers and just 12% of business owners over 60.

When it came to using specific tools Gen Y was also the most likely to embrace Facebook and Google + with 38% using those tools compared to 23% of Gen X, 13% of Baby Boomers and 9% of those over 60.

However, younger business owners were not the highest users of all online tools. Notably Gen Y had the lowest rate of use of Internet search engines to promote their business, with just 14% of Gen Y business owners using them compared to 18% of those aged over 60, 31% of Gen X and 30% of Baby Boomers. 

Young business owners were also less likely to embrace email marketing.

Smith says these differences show that younger business owners preferred tools that let them interact with their clients in a much more social way.

“These results are interesting because they point to a real difference of approach between business owners across the age range. Younger business owners tend to communicate with potential customers in a much more conversational way, preferring to use social media tools such as Facebook that allow for back and forth. Whereas what we are seeing from older business owners is a preference to communicate in a more traditional manner, but with improved reach and accuracy through online tools like search engines or email.”

 

Social media use also varied by type of business, with retail and hospitality businesses the most likely to embrace the technology. 25% of businesses in the sector use social media, compared to 23% in business and professional services, 22% in finance and insurance, and 21% in warehousing and manufacturing. Some sectors were far less likely to embrace social media, with just 8% of construction and trade businesses and only 3% of agriculture and fisheries businesses reporting they used any form of social media. 

 

Smith says that for many businesses, it is still too difficult to take advantage of many of these tools.

“We know that tools like social media provide real benefits to businesses and make it easier for them to communicate with potential customers, but there are still significant barriers for many business owners in terms of time and expertise.

“However, social media is a vital part of today’s marketing mix. It is where consumers are searching and actively engaging, and can be a very inexpensive option to extend your marketing reach – especially for small businesses.

“The key is using it ‘little and often’ – taking the approach to do a small amount regularly will make it more manageable for Kiwi business owners to get a return on their investment.”