The State of Social Business in Australia

Market trend

Earlier this year, Sensis released their annual Yellow Social Media Report, analysing the state of social business within the Australian market. It’s the most comprehensive report of its kind, with researchers gathering feedback from 800 consumers, 1,800 SMEs and 150 big businesses from across the nation. It gives them a wide range of insights on how social is being used, from approach to application and everything in between.

It’s a great read and worth taking the time to look over if you get a chance, but for those who don’t, here are some of the main points from the 2014 report.

Room to Grow

The report shows that 36% of small businesses and 48% of medium enterprises now have an active social media presence, up from 30% and 47%, respectively, in 2013. While there has been an increase, this still means that more than 50% of Australian SMEs have no social media presence at all. Data from the Australian Bureau of Statistics shows that there are over 2 million businesses operating in Australia, with 95% of them being small businesses (those with fewer than 20 employees). This means more than 950,000 Australian companies have no social media presence of any kind. Now, many of these would be local businesses, like milk bars and newsagents, companies with little need for a significant social footprint. But that’s such a huge number – close to one million businesses with no presence. As more SMEs continue to see the benefits of social media marketing, that figure is inevitably going to rise. For many, it simply won’t remain viable to flat out ignore social. While it won’t reach a tipping point overnight, most businesses will need to establish a social media presence, at some stage, in order to meet the evolving behaviours and expectations of their customer base.

The report also shows that of the SMEs who don’t have a social media presence, 19% of them are planning to establish one within the next year. Based, again, on ABS data, that equates to more than 170,000 businesses that’ll be looking to build a social presence in the near future. Couple this with the average small business expenditure on their social media presence of $4,560 p.a. (also listed in the Yellow Report), and that adds up to a significant pool of potential investment being projected for social business in Australia within the next twelve months. As more companies utilise social platforms, consumer behaviour will continue to adjust, and greater emphasis will be put on building and maintaining a social presence in order to reach people where they’re already searching.

Why Aren’t More Australian Businesses Utilising Social Media?

According to the report, the two main reasons why Australian businesses avoid social media are:

a)      It’s not suited to our industry

b)      We see no need for it

The latter view is also supported by data in the ‘General Public’ section, where ‘Not interested/doesn’t appeal’ is the main reason Australians avoid social media overall - with 61% of total responses. There’s still a way to go before social is fully integrated into the wider Australian communications culture, particularly among older generations. Yellow Report stats show that users aged 65+ have the lowest average number of friends, contacts or followers at 88, compared to 511 for those aged 14-19, which is indicative of the generational gap, in relation to social engagement. So long as this gap exists, it’s likely to also remain in businesses circles too, at least in some capacity. The 20-29 year-old age bracket leads the way in following brands or businesses on social, with 43% following brands online. 41% of those in the 30-39 bracket also follow businesses, with ‘Work/Profession Related’ among the top reasons why they choose to do so. While the view that it’s ‘not of interest’ is still a barrier, it’s clear that people are seeing increased professional value in social media.

Online Reviews/Blogs

The report shows that 77% of users in the 30-39 age bracket indicated that they read online reviews or blogs as part of their purchase process, underlining the importance of your web presence as a key data source in the sales cycle. This shows that even if you don’t put too much weight into digital marketing and social media, it’s still worth taking the time to know what’s being said about you and your company online, and how that affects what people find when they search.

Further Notes on How Businesses Are Using Social

  • The report shows the majority of small businesses update their social media profiles once per week, while medium and large organisations post daily. This highlights that even those who are active on social are not yet utilising the medium to full potential – it’s hard to imagine that one post, or worse, one tweet, per week is going to lead to any significant results online
  • Facebook is the clear leader, in terms of platforms used by Australian businesses, leading Twitter and LinkedIn in all categories, though Twitter also ranks highly in large organisations, with 61% maintaining an active Twitter presence (comparatively 25% of small and 37% of mediums). Big business is likely leading the way here – as Facebook continues to alter their algorithms and become more ‘pay to play’, Twitter is rising in importance, and it’s likely more SMEs will integrate Twitter, and other platforms specific to their target audience, into their marketing mix as things progress. Interestingly, blogs are also well down the list, with less than 7% of brands actively blogging. With all the focus on content marketing, particularly for SEO purposes, this too is likely to increase
  • Only a small number of SMEs have paid to advertise on social media, with 15% of small businesses and 24% of mediums shelling out to get their message through. This shows that there’s still a lot of businesses not capitalising on the potential of social ads, particularly the focus and reach achievable through the vast array of targeting options. As social business advances, and more of your target demographics incorporate social platforms into their day-to-day communications, investment in social ads will become a more logical option

Overall, the Yellow Report covers a wide range of data points and insights. Each section opens up a range of tangents and possibilities, highlighting the many opportunities available within the Australian marketplace. While some still hold reservations, the numbers show that trend is shifting and more businesses are recognising the change in consumer behaviour. This is especially relevant among younger demographics, with social media engrained in the core of their interaction and relationship building process. As these younger audiences move into more lucrative demographic markets and become target consumers for more brands, the need for social media interaction is going to increase. Big business knows this, the numbers show that they’re aware of the trend and are already preparing for it, and it’s only a matter of time before more SMEs follow suit. 


Andrew Hutchinson

Writer/Consultant at www.andrewhutchinson.com.au

I'm a freelance writer, content creator and social media consultant from Melbourne, Australia. I'm an internationally published author, an award-winning blogger, a Hootsuite Ambassador for the APAC region and one of the 'Best Thinkers' on leading social media news website Social Media Today. If you need help with content, content marketing, social media marketing or SEO, get in touch - www.andrewhutchinson.com.au


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Phil Khor

Phil Khor , Founder at SavvySME

Great summary; really good read. I agree the trend is growing but I reckon the reasons for those avoiding it like a plague is very real. A few small business owners I caught with 1:1 last week who shared the same view that social media isn't necessarily designed for time-poor business owners. I also get the sense when they say "it's not suited to my industry", that they aren't actually seeing the returns for their investment of time and money on ads. A couple of them simply don't know what to post on their FB page in order to engage with their customers effectively. Have you heard of similar sentiments? I think if businesses see social media and online presence as more than just a necessary evil, but a useful marketing tool, there might be significantly more uptake.

Andrew Hutchinson

Andrew Hutchinson , Writer/Consultant at www.andrewhutchinson.com.au

I think you're 100% correct, Phil - much of the resistance or lack of interest is due to the learning curve of social, and because of that additional learning, many are not seeing ROI when they do try it out, because they're not generating necessary engagement with their content or ads. While most people are pretty well-versed in social for personal use, there's a whole range of new complexities when you're trying to generate business, and it does take time and effort to get a handle of - so I understand the sentiment that it's not for the time-poor. Results drive engagement - if businesses see results, they'll investigate more and spend more time utilising the platforms, relative to returns, and those results are becoming more apparent, it's really a matter of getting a clear understanding of what's possible, what you can expect, and building from there. I think as businesses get a better understanding of what's possible, and as more consumers grow to expect brands to have a social presence, we'll see more of a shift.