Small Business Owners’ Demographics Influence on Social Media Marketing

Abstract

            As social media, the use of online platforms and websites to promote a product or service, becomes increasingly prevalent, adjusting marketing strategies to utilize social media platforms to reach a broader audience worldwide has become one of the best ways to gain new business and maintain clientele. This current trend in marketing allows businesses to connect with people more personally (Baluch, 2024). Understanding how the demographics, the statistical data of a population that uses social media, of small business owners use of social media marketing, specific demographics correlate with the use or lack thereof of social media marketing, and if these demographics align with the popular demographics as a whole of specific social media platforms will assist in providing sufficient evidence and support for small business owners to expand into the social media marketing world. This research study aims to understand and find the correlation between the demographics of small business owners and their use of social media marketing. The following research questions were designed to address the key aspects of this study: RQ1: How do the demographics of small business owners influence their use of social media marketing? RQ2: What specific demographics can correlate with business owners' social media marketing use (or lack thereof)? RQ3: Do the demographics of small business owners align with the popular demographics, as a whole, of specific social media platforms? The preliminary findings of this research will show that the older generations, mainly boomers, still refuse to use social media marketing or see it as necessary but still have a negative attitude towards it and possibly do not use it properly to promote their brand. Specific demographics of the general population that use social media will also correlate with the specific platforms that small business owners mainly use. These findings have practical implications for small business owners, as they can use this information to make informed decisions about their marketing strategies.

Introduction

Small business owners can tap into the vast potential of popular social media platforms to connect with a diverse audience and share information about their business, products, or services. These platforms, as noted by Bump (2021), all support sharing photos and videos, which can be effectively used for promoting business services and products. While managing these platforms can be challenging due to the time required for content creation and the associated costs, the potential benefits, such as significantly boosting a business's online presence and customer engagement, far outweigh the challenges. This promising outlook for small business owners should motivate them to consider social media marketing a viable strategy.

In a study by Smith (2022), it was found that a significant 81% of purchasing decisions are influenced by posts from friends on social media. Moreover, 71% of individuals indicated that social media recommendations make them more inclined to purchase. However, it is crucial to note that when consumers come across unfavorable reviews, there can be a 133% increase in conversions. Positive social media feedback about a business tends to boost the likelihood of others purchasing the advertised products or utilizing the services. Conversely, negative reviews about businesses, products, or services can have a detrimental impact, underscoring the need for businesses to actively monitor and manage their online presence to prevent potential harm.

Businesses must adopt a proactive approach and actively monitor all online content, promptly responding to consumer interactions with online material. A single consumer comment has the potential to spread misinformation about a business. Due to this difficulty, some businesses opt out of interacting with consumers on social media and instead rely more on Google reviews (Aral, 2023). The public's interpretation of what is expressed or endorsed on social media is consistently being scrutinized, and in today's 'cancel culture,' this could significantly harm businesses. According to Andreou and Nicolaidou (2019), various factors such as age, gender, experience, frequency of internet and social media usage, and educational level contribute to perceptions of social media and the effectiveness of content. This active monitoring and engagement can make small business owners feel responsible and in control of their online presence.

As Peterson (2023) points out, effective social media can enhance a business by advertising its products or services, whereas ineffective social media utilization can harm a business's reputation. Understanding the correlations between small business owners' demographics, their use of social media marketing, and how it aligns with the general population's use of specific platforms will provide a comprehensive overview. This knowledge will empower small business owners in specific demographic categories to expand their businesses through social media marketing. It is crucial to remember that ineffective use of social media can have a negative impact, making it all the more important to use it effectively. By understanding these correlations, small business owners can make informed decisions and feel empowered in their marketing strategies.  

Statement of Purpose

            This study aims to thoroughly investigate through a literature review and a previously conducted research study produced by the researcher how the demographics of small business owners influence their use of social media marketing by answering the following questions:

·         RQ1: How do the demographics of small business owners influence their use of social media marketing?

·         RQ2: What specific demographics can correlate with business owners' social media marketing use (or lack thereof)?

·         RQ3: Do the demographics of small business owners align with the popular demographics, as a whole, of specific social media platforms?

Market Description

            The market for this study will be small business owners, who have been used in previous research conducted on small business perceptions of social media marketing, and other small business owners in the Jonesboro—Paragould, Arkansas area that the researcher knows personally. This study will explore how small business owners' demographics influence their use of social media marketing. This will provide insight to assist small business owners in expanding their business through social media marketing. According to a report by Statista in 2019, social media generated a staggering $39 billion in revenue. As per the Pew Research Center, around 70 percent of Americans possess at least one social media profile (Smith, 2022). Effective social media marketing assists in reaching a specific audience to boost revenue (Baluch, 2024), offering a hopeful prospect for small business owners.

            The target audience of this research study is adults who own small businesses in the Jonesboro – Paragould, Arkansas area. In this region of Arkansas, the increasing population has the potential to lead to the establishment of more small businesses. A Statista report from 2023 shows there were around 32.62 million small businesses in the United States in 2020. McCarthy (2014) mentions that according to the National Small Business Association, over half of the United States's small businesses use social media, while only 27 percent of small business owners indicated that they do not. Among those who use social media, the preferred platforms are LinkedIn and Facebook. This information indicates that leveraging social media marketing could be a promising strategy for your business's expansion.

            Over the past decade, traditional advertising has consistently decreased as social media marketing has expanded. Marketers anticipate an uptick in utilizing more traditional media until 2022. This is due to businesses aiming to cut through the digital noise, leverage consumer trust in traditional media, brace for the decline of third-party cookies, tap into the growing popularity of podcasting, harness the digital impact of traditional media, refine their brand and market fit, and reassess digital effectiveness (Moorman et al., 2022). According to City-Data (n.d.), Jonesboro, Arkansas, hosts 13 AM radio stations, 15 FM radio stations, and six television broadcast stations such as KTEJ, K54ER, K46EM, KAIT, KVTJ, and K27FC. Meanwhile, Paragould, Arkansas, has 13 AM radio stations, 14 FM radio stations, and six television broadcast stations, including K27FC, K46EM, KAIT, KTEJ, K54ER, and KVTJ. Brookland, Arkansas, boasts the same number of AM and FM radio stations as Jonesboro, Arkansas, and the same six television stations as Jonesboro and Paragould. Randall and Randall (2012) suggest that television advertising is economically viable with local cable operators, radio ads are effective when targeting the station's market segment, print ads offer permanence, and businesses with limited budgets can advertise in newspapers. Magazines reach larger audiences due to longer retention, billboards are effective for passersby, and direct mail can help target specific consumers. This research has considered all these factors to provide the most comprehensive insights.

            The increasing population in the area leads to more people using modern media. Marketers and small businesses in the area heavily rely on digital media to promote themselves and keep an eye on their competitors. They produce content for various platforms to reach a wider audience and utilize blog posts to exchange and gather diverse perspectives and concepts about their business.

            The small businesses in the Jonesboro – Paragould, Arkansas area are the focus of this study, encompassing Jonesboro, Brookland, and Paragould, Arkansas. According to the United States Census Bureau (n.d.), the area's total population is around 114,423 individuals, with a relatively equal distribution of males and females. The median resident age in Brookland is 27.1 years, while Jonesboro and Paragould have median ages of 34.1 and 36.4 years, respectively (City-Data, n.d.). City-Data (n.d.) indicates that Jonesboro and Paragould are 94 percent urban and 6 percent rural, while Brookland is 86 percent urban and 14 percent rural.

            The Jonesboro – Paragould, Arkansas area is experiencing continuous population growth, leading to the expansion of resources in these cities and the emergence of numerous small businesses. City-Data (n.d.) reports a 43.9 percent population increase in Jonesboro, a 37.1 percent increase in Paragould, and a substantial 228 percent increase in Brookland since 2000. As the population continues to grow, so does the number of small businesses and the competition within their markets.

Methodology

            As per the United States Census Bureau (n.d.), Arkansas's Jonesboro – Paragould area had an estimated combined population of 114,423 people in 2022. In Jonesboro, 46.4% of the population is male and 53.6% is female, while in Paragould, 49.1% are male and 50.9% are female. The small town of Brookland, situated between Jonesboro and Paragould, has an equal distribution of male and female residents. According to the United States Census Bureau (n.d.), Jonesboro had 1,763 employer firms, and Paragould had 552. The data indicates that these cities have experienced growth over the years, leading to the emergence of more small businesses. As a reminder to the reader, this study aims to find a correlation between small business owners' demographics and their social media marketing usage.

Sample and Interview Instrument

            The support for a quantitative research study on the correlation between the demographics of small business owners and their use of social media marketing will involve providing both primary and secondary research. Primary research will involve analyzing a previous study on small businesses' views on social media marketing, which indicates a potential correlation between the demographics of small business owners and their perception of social media marketing. Statistical data on small business owners and their use of social media marketing is another primary source that requires analysis to answer the research questions. Nevertheless, secondary research, like conducting a literature analysis, will be utilized to bolster and reinforce the research findings. The researcher will also use demographic information about small business owners that they personally know to draw more accurate conclusions. This approach will ensure that the study participants remain anonymous. For this research project, primary data, such as statistics within the population, will be needed to better understand the demographics of those who use social media marketing in small businesses. Secondary data will be used to back up or disprove that there is a correlation between small business owners’ demographics and how it influences social media marketing.

Limitations

            The course's accelerated time frame presents a challenge in conducting this study as comprehensively as possible. This acknowledges that due to the short time frame, data and literature cannot be examined more thoroughly to provide a better understanding of the research. A limited amount of participation can be done within the seven-week course. There is an understanding that a bigger sample size would create more extensive data among a more diverse group, leading to better findings for this study and ensuring that our audience knows these limitations and understands their impact on the study's outcomes.

Literature and Data Review

            Understanding the definition of small businesses and the demographics of the owners in the United States will substantiate the evidence that the owner's demographics influence their outlook and use of social media marketing. Small businesses play a significant role in the United States despite their name; according to the Small Business Administration, these businesses, which have 500 employees or fewer, make up 99.9% of U.S. firms, while most of these 33 million firms do not have paid employees, approximately 6 million do. They contribute to just under half of total private-sector employment, which is 46% (Leppert, 2024). Baulch (2024) says businesses' top seven social media marketing platforms are Facebook, Instagram, Twitter, YouTube, Pinterest, LinkedIn, and TikTok. These platforms generate new clientele, build relationships, and increase brand awareness. This study's findings will show that these are the most used social media platforms for small businesses in the Jonesboro—Paragould, Arkansas, area. According to McCarthy's chart from 2014, it is evident that small businesses consider social media to be crucial, as per the National Small Business Association's data, which indicates that at least half of small businesses in the United States use social media while LinkedIn and Facebook are the most popular platforms for small business owners. In contrast, only 27% of small business proprietors have stated that they do not utilize social media. The ongoing research will incorporate these statistics from the chart and the excerpt to bolster the argument regarding the percentage of small business owners using social media, their primary platforms, and the purposes for which they use social media. According to a Statista report (2023), small businesses in the U.S. allocated 30 percent of their advertising budget to social media marketing in 2022 while expanding to LinkedIn and Twitter platforms. They planned on allocating even more of their budget toward social media marketing. The report's information will be essential for the research, as it will display the demographic differences between small business owners looking to boost their social media presence and those not. Peterson (2024) has conducted thorough research into how small businesses view social media marketing, offering a comprehensive analysis of interviews with small business owners and employees specific to the Jonesboro – Paragould, Arkansas area, along with complete transcriptions of the interviews. The detailed results of these perceptions and a thorough communication and implementation strategy make this study valuable for further research into how small business owner’s demographics influence their use of social media marketing.

Preliminary Findings

            The baby boomer generation, in general, perceives social media marketing negatively. Most refuse to use social media marketing to expand their business to a wider audience. At the same time, some view it as a necessary evil but still do not use it appropriately to support and expand their business. They are not using social media marketing to connect with their audience personally or even use different platforms to market themselves to other generations by using only Facebook rather than Instagram or TikTok. Many of the older generation in the area do not even utilize Google so that the audience can find their business. A 66-year-old white male small business owner in Jonesboro, Arkansas, with less than a high school education and a small household of two, does not use any form of digital media to promote their business. His only form of advertising is a fleet of vehicles with his company name and number on them. Another small business owner in Jonesboro, Arkansas, is a 61-year-old white male with a high school education and no family. He only uses Facebook and Instagram to promote his business. His perception of all digital media is highly negative, and he does not even utilize these forms of media to their full potential to connect with upcoming generations or to get to know his clientele more personally.

            Generation X, Millennials, and Generation Z are more adaptable to social media marketing. They are more likely to utilize social media marketing to its full capabilities while connecting with the audience on a personal level. A 46-year-old white female with a small family of two and a GED has a small business that services Northeast Arkansas but is based in Paragould, Arkansas. She uses multiple social media platforms such as Facebook, Instagram, Twitter, LinkedIn, and TikTok to keep up with the trends and generate new clientele for her small business. A 31-year-old white male with a small family of two and a bachelor’s degree who has a small business in Jonesboro, Arkansas, also utilizes multiple platforms such as Facebook, Instagram, Pinterest, and TikTok while integrating some AI to generate new ideas and create more engaging posts for their audience. These generations look forward to the advancement of AI in their social media marketing and maintain positive attitudes toward it.

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