Those of you who have followed this blog for awhile and some of the guest posts we've written on Mashable, ReadWriteWeb, Forbes, and other places know two things about me: 1) I'm a data junkie, and 2) I don't really have a lot of respect for "spin" in the startup world.
It's why I questioned the utility of location-based services last year and asked for meaningful metrics (which we still haven't gotten). It's also how yesterday's guest post on Mashable came about -- we're seeing metrics that indicate that although group purchasing as a sector is alive & well, it has peaked for individual providers and certainly local businesses.
I am not naturally a curmudgeon. I just think that if you really want to know what is happening, you have to look at where the numbers are and how they are trending. Metrics trump all -- the coolest technology, the best PR team, the best venture capitalist. All win and lose most of the time based on numbers.
This is great data. I'd prefer a slightly larger sample size than 752, but it is good enough to draw inferences.
I think the way the data is presented is a little misleading -- so I did some basic number crunching of my own.
Specifically, I wanted to understand just what local businesses really think of each one. For every person who likes each service, how many dislike it or find it ineffective. I also wanted to correlate the numbers other criteria -- specifically what the service provides a small business, whether or not they sell directly to the small business or have a low-touch model, how large the audiences are, etc. All of these things play into something that local businesses can regard as good opportunities for advertising/marketing dollars and attention.
First, I wanted to
determine awareness/usage. To do so, I'm making an assumption that anyone who comments one way or another on the utility of a platform for marketing is definitely aware of the core features of each platform, probably has tried the platform, and has *possibly* used it in a business context. These numbers pretty much make sense to me, although I was surprised to see that people have an opinion of foursquare almost as much as Yelp or Groupon. That isn't a stab at foursquare, but LBS adoption overall (foursquare + competitors) is something like 5% worldwide, yet 26%+ of local businesses feel qualified to opine on its usefulness for marketing. So the concept of LBS is known more than adoption at the moment.
Next I wanted to understand what's known in quant research/customer satisfaction parlance as "the top two boxes"... i.e. what are the % of folks who think that something is either excellent or very good. In this case, it's "very beneficial" or "somewhat beneficial." See below for the results. Column E is the % of all polled SMBs who regard each platform in the top two boxes.
But that isn't the end of the story. These web services cluster into 3 groups when you look at the percentage of people who aren't users. Facebook is more or less ubiquitous, but still almost 1 in 3 SMB owner/operators have not used it. Roughly half SMBs have not used Twitter, YouTube, LinkedIn, and MySpace. And roughly 3 in 4 SMBs have not used Groupon, Yelp, LivingSocial, or foursquare. So we must normalize the data to give us a clearer picture of what the people who have used each tool actually think.
The chart above is really astonishing to me. 81.5% of SMB Facebook users think it is effective for marketing. That's an amazing number. On the opposite end of the spectrum, a little more than half of SMB users of Yelp, MySpace, Groupon, LivingSocial, and foursquare (in that order) think those products are effective for marketing. Now let's look at the other end of the spectrum -- of SMBs that use all of these tools/services, which do SMBs think are relatively ineffective for marketing? To assess that, we'll need to analyze the "Not Beneficial" numbers:
The "Not Beneficial" numbers in Column H all look similar across the various platforms -- but they have a hidden meaning when compared against the total % of respondents who have an opinion about each platform. Of SMB users who responded to the eMarketer survey, almost half of the actual Users question the effectiveness of MySpace, Groupon, LivingSocial, and foursquare for helping them achieve their needs.
All in all, eMarketer's report was fascinating and gives us a good idea of what SMBs think. Granted, SMB in and of itself is not a segment. SMBs are in hundreds of types of businesses, many of which are not suited for individual local, social, or mobile platforms. So the numbers don't necessarily tell the entire story. But they do tell us who is winning so far and what constitutes a platform or platforms that SMBs should pay attention to.
One final note... it would be very interesting to compare these numbers to old media means of advertising: yellow pages, billboards, newspapers, radio, television, etc. I'd love to see how these "new media" services compare to old media.