Assumptions can be dangerous. For instance, because I am the co-founder of a fintech company, some might assume I’m pretty tech-savvy. But in reality, I look to Carolyn Rodz, my visionary co-founder, for the technical stuff.
I’ve seen others making similar assumptions about “frivolous” social media platforms like TikTok. Much more than a place for teenagers to share dance challenges, TikTok has become a very real magnet for small-business owners looking to connect with customers. But what factors are motivating this shift to the new platform, and what kind of results are they seeing?
To get to the bottom of these questions, Hello Alice sampled a portion of our more than 800,000 small-business owners to see how entrepreneurs leverage digital marketing platforms for growth. The resulting research report focused on major social media players, including Facebook, Instagram, TikTok, YouTube, and Snapchat as small businesses’ primary digital marketing platforms.
At a high level, we have learned that most businesses pursue digital marketing are young (less than five years old) and more likely to sell products, particularly in the beauty and self-care industries. Unsurprisingly, most entrepreneurs are hedging their bets by using multiple platforms to reach their digital marketing goals.
But the most significant finding confirms what can only be called the TikTok shift. Despite its status as the youngest player, TikTok overwhelmingly stands out as an emerging digital marketing leader. Our research found that it was the platform small-business owners were most excited to try. Among small businesses already on TikTok, 78 percent said they plan to increase their investment in the platform. Clearly, something is driving owners to shift their attention — and budgets — from the established players to new options.
According to our research, here are the three primary trends surrounding small business digital marketing today.
Affordability Is the Number One Factor for Small-Business Owners
When you’re running a small business, every dollar counts. This is especially true with the pandemic, inflation, and supply chain shortages not going anywhere soon. According to our research, the majority of businesses leveraging digital marketing platforms are new or emerging businesses, which also tend to be the most vulnerable to cost pressures. In practice, this means that entrepreneurs favor the platforms perceived to offer the best ratio of value to results.
Market leaders such as Facebook and Instagram came first and second in terms of perceived value for their marketing dollar, with YouTube, TikTok, and Snapchat trailing behind. However, this is for paid efforts, and nearly half (45 percent) of owners said they don’t engage in any paid marketing at all. When we measure the perceived value of each platform’s purely organic reach, TikTok comes in a close third to Instagram and Facebook.
The takeaway? Entrepreneurs are willing to invest their dollars in paid marketing that delivers proven results. However, despite devoting comparatively little time to the platform, entrepreneurs are finding a high chance of organic success via TikTok. Achieving real results with little or no monetary investment makes TikTok a clear winner for any small businesses deciding where to focus their digital marketing efforts in the future.
Creativity Has Become a Key Differentiator in Small-Business Marketing
Every business owner should be familiar with the concept of a key differentiator — the element that sets them apart from the competition. In a world of endless banner ads and Instagram posts, it’s no surprise that digital marketers are looking for easy-to-use features that enable dynamic storytelling in a variety of formats.
Our research found that approximately two-thirds of small-business owners believe that TikTok helps them tell stories in a creative way (67 percent), outpacing established competitors including Instagram (65 percent), YouTube (58 percent), Facebook (55 percent) , and Snapchat (51 percent). Whether it’s a new video filter or a viral audio clip, TikTok’s robust creator tools go beyond the usual arsenal of text and images to help entrepreneurs forge novel connections between consumers and their brands.
Even better, TikTok’s creative boost seems to come without much of a learning curve, with 81 percent of TikTok users telling us the platform is easy to use and 73 percent saying it is fun to use. There’s no underestimating these sentiments; when you’re a busy entrepreneur, fun and easy-to-use are going to win out every time.
Marketers Are Following Their Audiences to New Platforms
It’s only natural that Facebook and Instagram historically received the lion’s share of attention from small-business digital marketers, given that they are the most popular social media platforms. Marketing is, after all, a game of eyeballs. However, this is changing as Facebook usage declines and TikTok usage grows. Entrepreneurs are simply adapting platform strategies to follow their customers to the platforms where they spend time.
According to the data, the word is out that TikTok has huge potential for small-business marketers. Our survey revealed that 43 percent of small-business owners are now likely to join TikTok because they’ve heard of positive results from fellow entrepreneurs; only 23 percent told us the same about Facebook.
Some might assume that the TikTok shift is simply chasing a shiny new trend, but the research resoundingly suggests otherwise: Fifty-nine percent of helped small business owners said TikTok helped grow revenue, 42 percent said TikTok them safeguard their entrepreneurs against the impact of the coronavirus pandemic, and 32 percent said TikTok helped them raise capital.
There’s only one thing to say with results like that: Where do I sign up?