Fifty-five percent of small businesses that have tested group-buying platforms like Groupon and LivingSocial do not plan to use the services again, according to a new MerchantCircle study. The online business directory’s research supports Rice University’s study last fall that found one-third of businesses’ Groupon campaigns were unprofitable.
MerchantCircle surveyed 8,456 SMBs, while 6,874 responded to the question about group-buying deals. Of those, 23 percent (1,568) had offered a daily deal. From that number, 856 stated they didn’t plan to repeat the strategy, and 712 said they would try group-buying platforms again. More than 5,300 said they’ve never offered a daily deal.
SMB Surprise: 32 Percent Use Facebook Places
The study delivered much better news for Facebook’s mobile and local marketing aspirations. Thirty-two percent said they had used the Palo Alto, CA-based company’s six-month-old Places platform to promote themselves. Another 12 percent stated they plan to use the geo-social platform in the coming months.
Overall, around 70 percent of those surveyed use Facebook.com for promotions. According to MerchantCircle, that number is up from 50 percent last year and beats Google, which is being used by 66 percent.
Foursquare’s usage among local merchants has risen from 2 percent in 2010 to 9 percent this year.
Most Local Merchants Spending Less Than $2,500 on Marketing
According to MerchantCircle’s data, more than half of local merchants’ marketing budgets were less than $2,500 in 2010, and 60 percent do not plan to increase those spends this year. Twenty-six percent of the survey respondents cite high costs as their No. 1 complaint about online marketing.
Not surprisingly, 37 percent of the SMBs said that lack of time and resources are chief online marketing challenges.
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While it typically conjures up images of consumers clamoring for deals on big ticket items, American retailer Walgreens is hoping that this year it can be the first place consumers turn for inexpensive gifts like wine, candles and small toys.