The business of social networking

Published: 12/04/2009 by Jennifer Youssef / The Detroit News

A growing number of smaller companies are beginning to see the business value of social networking sites such as Facebook, Twitter and LinkedIn that let users post information and communicate with others. Users also can meet new people through their contacts, giving them access to a broader audience.

While social media still isn't widely used in the world of small business, a recent survey by Citibank and GfK Roper, a research and consulting firm in New York, found that a small percentage of firms are finding the sites to be valuable tools for marketing, advertising and generating more business.
Marketing experts say if used correctly, the sites can be of tremendous value, allowing businesses to inform customers about activities within the company, creating a personal connection and giving the company more exposure.

"If you don't have social media, it's like having an unlisted phone number," said Charlie Wollborg, a partner at Curve Detroit, a marketing strategy and creative design firm in Pontiac.

Although social media has become a popular way for people to communicate with friends and relatives, the technology hasn't caught on with most small companies. A nationwide survey this year found that of 500 small business executives polled, 76 percent have not found networking sites to be helpful in generating business leads or for expanding their business during the last year.Although there's no data on how many Michigan companies use social media, it doesn't appear to be popular here, said Mike Rogers, vice president of communications for the Small Business Association of Michigan. Businesses' reaction to social networking today is similar to the mid-1990s, when the Internet was new and companies didn't see a need for it, he said.

Only 15 percent of small businesses in Michigan had an Internet connection in 1993. By 1998, 20 percent had a Web site, and now nearly all companies in Michigan have a site, Rogers said.

"Small businesses are learning (about social networking) as they go along," Rogers said.

Good public relations
All companies should be using social networking media on some level, said Jennifer Cherry, vice president of Marx Layne & Co., a public relations and marketing firm in Farmington Hills.

"It is a PR function -- it's about building and maintaining a brand among your constituents," Cherry said. "It tells a company's audience and prospective clients who they are and what they do. Retailers should be using social media as a tool to hear what people are saying about the company and their competitors."

But attorney Henry Baskin of Baskin Law Firm PC in Birmingham, doesn't see it that way. He said the short messages written on Twitter, My Space and Facebook are not an effective form of marketing or advertising because potential clients don't go to those sites to find information about lawyers or other types of professionals.

"As far as marketing, you can't market on My Space or your space or anyone else's space," he said. "It doesn't sell us as a professional."

There was a time when Madeleine Miehls, who operates an online oral history and writing business, WriteSideofBusiness.com in Lake Orion, felt that way, too, until she found clients through LinkedIn.

"I used to laugh this off because I thought 'What a waste of time,' " she said. "But it's not a waste of time at all. It just makes things that much faster."

That's one of the benefits of social networking, said Jeff Antaya, chief marketing officer for Southfield-based Plante Moran, a midsized accounting, tax and management consulting agency. Plante Moran encourages employees to open a LinkedIn account to meet potential clients and peers. The firm tries to be in tune with the needs of its employees across the generations, he said. Showing the new hires how to build up their circle of professional peers on LinkedIn makes them more comfortable about networking.

Twitter, Facebook and LinkedIn let the firm communicate with a larger audience about the kinds of services it offers and gives the company another way to publicize job openings, events and industry-based publications, Antaya said.

A new standard
Marketing experts say social networking sites are gaining traction in the business arena.

"It's like a snowball rolling down the hill," Antaya said. "It's picking up speed. Five years from now, it's going to be the standard."

It's a new tool and businesses still don't know how to use it, Jeff Stoltman, marketing instructor at Wayne State University. But he suspects that will change.

"It's by no means in the mainstream (right now)," Stoltman said. But "it's become more common and acceptable than it was a year ago."

Rogers, of the Small Business Association of Michigan, agreed.

"It'll take a few years, but businesses will learn to use these tools to engage customers and increase profit," he said. "It'll shake out in interesting ways."

jyoussef@detnews.com (313) 222-2319