Exploring the use of Social Media by Australian small business managers

Small business managers face a constantly changing technological environment. Over the past decade, Facebook achieved mainstream adoption and became the dominant social media platform used in Australia, with Twitter and LinkedIn also experiencing rapid uptake among Australian users. Today, there is a constant stream of new social media services, and existing services continue to evolve. These have the potential to help small business managers enhance traditional strengths and mitigate weaknesses, providing a competitive advantage to small, agile businesses that could quickly take advantage of opportunities that these new tools make available.

This research explores the adoption, use, and outcomes of social media services by a group of Australian small businesses. While studies in this area have criticised for over-reliance on `snapshot' studies of technology adoption, I use a series of 15 longitudinal case studies to show how a range of different social media services were and how social media use developed and matured over time, using a combination of qualitative interviewing and online ethnographic research methods.

Participants for this study were selected from the professional services, retail and hospitality sectors in Melbourne, Australia. Management of all companies used a wide range of different social media services for their businesses, including Facebook, Twitter, LinkedIn, Google Plus, YouTube and numerous blogs and forums.

Two key themes driving social media adoption are identified in this study. The first is a fear of missing out as managers see other SMEs seeming to achieve significant benefits from the adoption. The second is the perception of social media use as a low-risk strategy for growth by building relationships and networks of customers, business peers and personal contacts in order to increase the potential reach of their promotions. I also explore the outcomes that managers received from their use of online social networks, in the form of visibility, insight and social capital. I examine the use of online networks to support existing professional networking activities, and the network structures that help business managers to access information, influence and solidarity from their contacts.

Interpersonal relationships and business networks appear to play an important role in discovering and learning to use new social media services. Services adopted during this study were generally first encountered via the managers' social networks and contacts. By placing managers in contact with other technology users as they experimented with using these new tools, social media facilitated rapid learning, adoption and 'hopefully' set the SME on a strategic growth trajectory.

Managers also used their social networks to strengthen network ties more operationally, becoming embedded within networks of peers and customers. The managers sought to cultivate reputations as influential, knowledgeable and trustworthy thought leaders in their industry; well-connected and actively supported by network members. They relied heavily on social media to stay in regular contact with increasingly larger networks. Over time, this helped to develop the critical mass of "people, discussions and emotion" that Rheingold (1993) describes as the foundation for online community formation. These tactics created networks with higher degrees of closure: a structural requirement for the development of influence and solidarity.

The findings of this study contribute to social capital theory in terms of how new technologies create, or fail to create, social capital for a small business. Managers often began using social media in their business to support their marketing and promotional activity, seeking greater visibility to potential customers. As these networks grow and mature, structural features of these networks such as brokerage and closure (Burt, 2005) also helped the managers gain access to social capital resources in the form of information, influence and solidarity. These provide a broader range of potential outcomes from social media use, and have complex interactions with the key adoption factors that emerge from this research. The 'fear of missing out' is an early adoption driver, fuelled by the public nature of social media use, and by the exposure to information provided by broad, weak-tie contacts via brokerage effects within a network. Greater appreciation of the risks involved, challenging the 'perceived low-risk' adoption factor, comes from interaction with strong-tie contacts. These interactions can use closure effects to provide managers with valuable influence and solidarity, or to present barriers when managers attempt to deal with cliques of customers or peers that possess high in-group solidarity among members.

Interestingly, the data also reveals that some SME have a more strategic approach to social media adoption than others. For some SMEs, their diverse online social networks provided information on industry developments and customer activity, and brokerage opportunities that allowed the managers to gain advantages from this information.

There are two primary managerial implications of this research. The first is to dispute the perception of social media adoption as a low-risk strategy, due to hidden costs in terms of staff time and knowledge acquisition. The services used in this study all required additional work, in terms of developing principles knowledge and building networks, that was not previously anticipated by the managers. This translated into placing additional demands on the manager's time in order to use these services effectively. The second is that managers should consider a broader range of potential outcomes for their social media use, and plan for these from the outset. In this study, each manager initially viewed social media purely as a marketing and promotional tool, extending their potential reach at a minimal cost compared to traditional advertising. However, social media also provided those managers with a tool for the deliberate cultivation of reputation ¿ both as an individual entrepreneur and for their business. They used their chosen social media services to access insights into customer behaviour, industry trends, and feedback into their product offerings. They also used those services to assist in more efficiently building and maintaining the networks of contacts that made information, influence and solidarity available to them ¿ social capital outcomes derived from the structure and content of their relationships with other users. Wider awareness of these potential outcomes could enable managers to strategically build their networks, producing an asset that delivers greater value for SME's.