Case Study: The Budgetary Challenge

In February 2011, MerchantCircle’s quarterly Merchant Confidence Index survey¹ found that local merchants are moving to online marketing with sites like Facebook and Twitter to expand marketing capabilities, but they have not fully committed to significant marketing budgets. One of the major reasons is cost. Of 8,500 small and local business owners surveyed, many are still leery of using newer marketing techniques such as mobile marketing and group buying with sites such as Groupon that market their products at a steep discounted.

¹ Social media continues to gain traction in marketing strategies, Lawn and Landscape Magazine (February 22, 2011), http://www.lawnandlandscape.com/ll-022211-Social-media-marketing-strategy.aspx.

The survey also found that half of local merchants spend less than $2,500 a year on marketing. The cost of marketing is very significant in small businesses and the ability to manage marketing is a significant challenge, with lack of time and resources being the complaint for 37 percent of those surveyed. Facebook is used by 70 percent of small businesses surveyed as an advertising vehicle. Facebook Places tops Foursquare with 32 percent adoption as of this writing.

In many cases, these merchants have only really considered the marketing aspects of social media and have not considered the security challenges posed by social media. In larger corporations, the adoption of security, in general, is more accepted because IT has been pushing security for years. Smaller businesses are more inclined to launch their product and services first and consider security implications second.