New Data on Small Business Adoption of Facebook Ads and Group Deals (Google Offers, Groupon and LivingSocial)

New marketing trends data from MerchantCircle's 7th survey of small business owners across the U.S. reveals that group deals are gaining popularity among small businesses and shows Google Offers and other niche deal providers are putting increased pressure on Groupon and LivingSocial. There’s also evidence of slowing adoption for Facebook Ads, although favorability for this new advertising medium remains strong among those who are using it.

Key insights from MerchantCircle's research include:

1. Group deals are experiencing steady growth among local merchants

• Nearly 12 percent of local merchants now report having offered a daily deal, up 33 percent since the last MerchantCircle survey in June 2011.

• About 75 percent of respondents say they would offer another deal in the future, citing its effectiveness for customer acquisition as their top reason (61 percent).  Deal profitability also appears to be on the rise: 37 percent now say solid profitability will lead them to offer another deal, up from just 24 percent in June.

• Among the 25 percent who said they wouldn’t offer another daily deal, 42 percent said it was not effective for customer acquisition, 36 percent said it was too costly and 34 percent said they lost money on the deal.

2. Cost is the most important criteria for selecting a deals provider.

• 64 percent citing cost as their top consideration when selecting a deals provider.  Local targeting (57 percent) and the ability to reach a large audience (52 percent) were the second and third-most important selection criteria.

• Businesses that plan to use Groupon in the future report that the ability to reach a large audience is equally as important to them as cost, with 62 percent citing reach and cost as key selection criteria.

3. Groupon and LivingSocial may face increased pressure from Google Offers in 2012.

• About 19 percent of local merchants who have offered a group deal have tried using Google Offers since its launch this summer, as compared to Groupon (26 percent) and LivingSocial (21 percent).  A large number of specialized deals providers have also entered the market; these services have been used by about 43 percent of local merchants who have offered a group deal.

• About 32 percent of merchants planning to use Google Offers for their next deals, as opposed to 26 percent who plan to use Groupon and 16 percent who plan to use LivingSocial.

• Google Offers enjoys the highest retention rate of all the large deals providers: 66 percent of its customers plan to use Google Offers again.  Just 41 percent of Groupon and LivingSocial customers report that they plan to use these services again.

• Before ceasing operations, Facebook Deals had been used by 22 percent of the respondents who’d offered a daily deal in the past.  More than half of these customers say they plan to use Google Offers for their next deal (53 percent).

4. Facebook Ads growth slows among local merchants.

• About 23 percent of local merchants report having tried Facebook Ads to date, which is only five percent more than six months ago.

• That being said, favorability for Facebook Ads remains strong among those who have tried them, with 62 percent saying they would use Facebook Ads again, citing ease of use (62 percent) and the ability to start and stop campaigns (55 percent) as the top reasons for continuing.

• Of the 28 percent who say they wouldn’t use Facebook Ads again, nearly two-thirds report that they didn’t acquire new customers (66 percent).  But more merchants now also cite high costs and low click-through rates as reasons not to advertise with Facebook again: 41 percent of merchants said the ads were too expensive (up from 35 percent in June) and 37 percent reported low click-through rates (up from 29 percent in June).

• While Facebook Ads growth may have slowed, general Facebook marketing continues to be extremely popular among local merchants, with 70 percent of people using the social network for marketing, up from 66 percent in June. 

A big THANK YOU to all our merchant members who participated in the survey.  Stay tuned for more insights into small business marketing in the coming days!

Sincerely,

The MerchantCircle Team

New Data on Small Business Adoption of Facebook Ads and Group Deals (Facebook Deals, Google Offers, Groupon and LivingSocial)

New marketing trends data from MerchantCircle's 6th quarterly survey of small business owners across the U.S. reveals that Facebook Ads are gaining popularity among small businesses and provides new insights into the group deals market, including increased pressure on Groupon and LivingSocial from Facebook Deals and Google Offers.



Click here to download the full report.



Key insights from MerchantCircle's research include:



1. Facebook Ads are gaining popularity among local businesses.



• 66% of local merchants are using Facebook for marketing.



• 22% of local merchants have used Facebook Ads, and 65% would use Facebook Ads again.



• Top reasons to use again include ease of use (67%) and the ability to start and stop campaigns (65%).



2. Merchants are warming to group buying, but adoption is still slow.



• Just 9% of local merchants having offered a daily deal using a service like Groupon or LivingSocial.



• While three months ago, only 50% of merchants who had tried offering a group deal said they would do so again, 77% now say they would be willing to offer another daily deal.



• Top reasons for offering another deal include effectiveness in customer acquisition (58%), favorable deal structure (30%) and profitability of the deal (24%).



• Among those who wouldn't offer another daily deal, 42% said that it was not effective in customer acquisition, 25% said it was too costly and 24% said they lost money.



3. Small business familiarity with Facebook and Google may help them win market share from Groupon in daily deals market.



• 52% cited familiarity with Facebook and Google as a reason they might choose Facebook Deals or Google Offers over competitive daily deal offerings.



• Other reasons for choosing Facebook Deals include bigger audience size (26%) and better local targeting (21%).



• Those more likely to use Google Offers cited Google's bigger audience size (42%) and Google's brand reputation (34%) as top reasons for preferring Google.



4. Relevant Charts:

Adoption and repeat usage of Facebook Ads

Perception of Facebook Ads amongst users

Adoption and repeat usage of daily deals sites

Perception of Daily Deals sites amongst users

What Businesses Have the Most Risk of Failure?

Coming from a family of local business-owner/entrepreneurs (of varying success levels), I have first-hand experience of the difficulties of trying to start your own business. When I was young, my father started a restaurant in Huntsville, TX, which was successful enough, that he had to work 12 hour days, 7 days a week. I know this because I spent my single-digit years running around that restaurant! He sold the restaurant a few years later to finally get some rest and started another restaurant venture in Conroe, TX, which failed. Eventually, he owned a super market in Santa Cruz and a burger joint in Boulder Creek, CA, which I spent my teen years working EVERY single weekend. I am not bitter. What teenager doesn't want to work every single weekend while everyone else is out enjoying beautiful California weather?

My aunts and uncles have also had varying degrees of success starting and running their own businesses. I've even had my own thoughts of starting a business, but which ventures have the most risk of failure? I came across this interesting article on Yahoo!, titled: The 7 Most Overrated Businesses. No surprise here - 'restaurants' shows up on the list.

Here's an excerpt:

...about 60% of restaurants close in the first three years, according to a 2003 study at Ohio State University. That's quite a bit higher than the roughly half of all start-ups that close in the first five years.

The reason: Restaurants typically have low profit margins and need strong managers who can run an ultra-tight ship through seasonal fluctuations and other struggles. Most people don't have that kind of intense managerial ability to pull it off.

Well, I guess I should think twice about opening up my Houston Rockets-themed restaurant in California. In the meantime, no matter what business you start or have, MerchantCircle is the ONLY free network that allows you to blog, build coupons and newsletters, and email them to customers.

Join the free network here today or communicate with other local business owners in our forums here.

Sincerely,
Community Relations

The Best Place For the Local Consumer Search Experience

From day one, we've been committed to providing you with the best tools and products to attract and engage local consumers. Whether it's tools to blog, build coupons, send e-Newsletters, or advertise on search engines like Google and Yahoo, you've been able to do everything easily and effectively. Our network of 800,000 local merchants, now sees more than 20 million unique consumer visitors a month!

With our new partnership with Demand Media, (read the press release here or here), you can now add dynamic, unique business content on your local listings. Say you're a consumer searching for a local auto mechanic, once you get to a MerchantCircle member's listing, not only will there be your created content (blogs, newsletters, pictures, coupons, etc.), you can also have content like the articles shown below on automotive issues and news. This will give your potential customers a truly one-stop shop for all their business-specific needs and interests.



Find out more about adding Rich Content through your MerchantCircle dashboard here. eNom, a Demand Media company, will also be powering our Instant Website and unique email offering.

Sincerely,
Community Relations

Finding Coupons on Twitter in Chicago, Phoenix, and Beyond!

FOX Chicago recently ran a story featuring two of our merchants from Chicago who actively use MerchantCircle to promote their business. MerchantCircle recently began feeding Merchant-built coupons instantly onto city-specific Twitter pages. In this case, coupons in Chicago can be found @MCircleChicago where we have more than

Go in and say hi to Mario Alonso at Bella Bronze Tan or Wilbur Sutphin at Deadwax Record Store in Chicago. Tell them Kevin says hi. Don't forget to check out their local media debut on FOX Chicago below.



Build your coupons now on MerchantCircle! We'll do all the work to promote you locally.

Sincerely,
Community Relations

Finding Local Coupons in Your City on Twitter

If you haven't already built coupons for your MerchantCircle listing, or haven't done it lately, now is the time! MerchantCircle releases the first-ever local city coupon feed via Twitter. Coupons that you feed will now automatically be fed to a city-specific Twitter page - making it easy for customers in your area to track real-time deals.

Using our tools to build coupons is easy and free. It takes less than a minute to build a coupon - do it now by clicking here. As a consumer, you can currently track your deals in these cities:

Local MerchantCircle coupons are available today at: @MCircleNY, MCircleLA, MCircleChicago, MCirclePhilly, MCircleDallas, MCircleSF, MCircleOakland, MCircleSanJose, MCircleBoston, MCircleAtlanta, MCircleDC, MCircleHouston, MCircleDetroit, MCirclePhoenix, MCircleTampa, MCMinneapolis, MCircleMiami, MCircleDenver, MCircleOrlando, MCSacramento, MCircleStLouis, MCirclePortland, MCCharlotte, MCIndianapolis, amongst other cities.



Clicking on the link from the city Twitter page will take consumers to your coupons listed on MerchantCircle. From there, they can print the coupon or save it to their Neighbors Profile (similar to clipping it and putting it on their refridgerator for later use). Consumers can create their Neighbors Profile here.


MerchantCircle members currently create more than 50,000 coupons and deals a month and can easily be found by searching under "#coupon" or "#coupons" on Twitter.

Real-time coupons are here! Start getting new customer today!

Sincerely,
Community Relations

How Important is Blogging for Local Business?

There was an article today in the Milwaukee-Wisconsin Journal Sentinel as well as on their website, JSOnline.com, titled: "Blogs can draw customers deeper into bsuinesses." Here is an excerpt of that article:

Even so, many metro Milwaukee companies have jumped on the blogging bandwagon. MerchantCircle, a free Internet marketing site, lists 183 business owners in Milwaukee as having blogs, joining a universe of 112 million blogs tracked by Internet search engine Technorati.

One business that has used blogging to build customer relationships and its brand is Stone Creek Coffee, a downtown coffee roaster and retailer of specialty coffees. Founded in 1993, Stone Creek has 100 employees and operates eight stores in the Milwaukee area. Its blog was launched in 2005.

Among the most challenging aspects of a blog is writing it consistently and keeping ideas fresh and authentic. Stone Creek solved this challenge by making its employees responsible for maintaining its blog.

It's a really good article with some tips that just might work for you and your business. Click here to read the rest on the JSOnline website.

On that blogging note, we have some really fascinating stats from 2008 through this year on blogging and local businesses. Stay tuned!

Sincerely,
Community Relations

Web 2.0 Equation for Local Businesses

We released our press release today on a study of our MerchantCircle members and their activity online. I'm live-blogging right now from the Kelsey Conference, where Darren Waddell, Vice President of Marketing, MerchantCircle, just gave a speech on the panel for 'The Web 2.0 Equation: Community and Viral Effects.' Below are some of the slides Darren used for his talking points. Essentially, business owners teaching business owners about the benefits of their MerchantCircle listing.






Sincerely,
Kevin
Community Relations

Continuing to Bring You More Local Customers

Since my cofounder, Wayne Yamamoto, and I founded MerchantCircle and started building the company with a great team, including Doug Kilponen and Jason Culverhouse, we've never forgotten our mission of bringing local merchants more local customers. Throughout our growth, we've always emphasized and strived to make sure that local business owners had a place on the web where they could attract and engage new customers, regardless of tech knowledge, or costs.

From the day our first merchants signed on over 17 months ago and now almost 250,000 merchants later, we've become the largest and fastest growing network of local business owners in the nation. That's a fact we're very proud of and we take that responsibility very seriously. From the partnerships we form, to new features we implement on MerchantCircle, we want to make sure we represent you well - getting you seen by as many new customers as possible.

The web may be a complicated mix of adwords, .coms, .orgs, user-generated content, and three letter acronyms, but we want to make sure that's it not so complicated. After all, your business livelihood depends on it. More and more people are turning to the web to search for their goods and services and it's imperative you be found on top search engines. We want to help you get there, and it's a mission and view we've held steady from day one.

Our recent news, announcing another round of funding, will help us bring you more customer engaging opportunities. We've got a lot more in store for you, as we expect the MerchantCircle network to grow to 1 million merchants by next year. Thank you for all your support over the last year and a half, and we look forward to your business success.

Sincerely,
Ben Smith
Chairman and Cofounder, MerchantCircle