An Innovation Diffusion Approach to Examining the Adoption of Social Media by Small Businesses: an Australian Case Study

Abstract

Whilst many studies have examined social media use from a consumer perspective, relatively few have examined its use by small and medium sized enterprises (SMEs), a group for whom it is becoming increasingly important. This study aims to provide a deeper understanding of an under-researched area, the experience of SMEs during the process of adopting social media, by identifying the factors that influence SMEs to either adopt social media or not and, if they adopt it, how they use it and evaluate its usefulness. The study involves analysis of in-depth interviews with 42 Australian businesses. Roger’s innovation decision process is used in an innovative manner to classify SMEs into five key stages of adoption of social media and identify the factors that influence the progression of SMEs across the various stages of adoption. The results show that the story of social media use is richer than just whether SMEs adopt it or not. Most participants used Facebook, suggesting it has become the de facto platform of choice to engage with social media. However, opinions of its perceived usefulness for SMEs varied widely across users. There was confusion surrounding the role of Twitter, its value, and concern about the amount of time needed to use it. YouTube was used by some SMEs to showcase their products or services. The study contributes to the literature by identifying key facilitators which appear critical to the decision by SMEs to continue use of social media – namely increased sales; brand development and a feeling of pressure that they ‘have to be there’. It also identifies some inhibitors to sustained use by SMEs, typically a lack of compatibility to industry sector; insufficient followership; and limited return on investment compared to effort required. Finally, the study shows how SMEs differentiate between social media platforms.