There may be a gap in the market, but is there a market in the gap?

My strategic marketing lecturer at Monash University was fond of saying “there may be a gap in the market, but is there a market in the gap?”

Having started West2East ReCreation to enable strategic marketing & social media communications ‘with and for’ local sport, small business and sponsor partners, I have found myself pondering this ‘market in the gap’ question?

The best evidence to support a ‘gap in the market’ of Australian small businesses (not) using social media is contained within the Yellow Social Media Report (June, 2012).

Firstly the Social Media Report tells us that 62% of internet users have an active presence on social networking sites. Social Media Statistics Australia do a count each month and in November 2012 the number of users on Facebook was up to 11,755,640, Twitter was steady at 2,114,000 and LinkedIn was up to 2,500,000.

The Social Media Report highlights that whilst a growing number of small businesses are using social media (27%*), the majority still aren’t. It also calculates that small business were spending an average of $3,410 per annum and that this was 15.3% of the total marketing spend (= $22,287 annual marketing spend in total).

The Social Media Report uses the same size classification of small business i.e. 1-19 employees as the Australian Government’s Department of Innovation Industry, Science and Research who provide Key Statistics, including survival rates.

The Social Media report states “there is a clear opportunity to build consumer relationships and sales via social media” noting that online communities are most interested in business offerings by way of discounts, giveaways, product information, coupons, tips and advice.

Within any business strategy the two major functions of marketing communications are:
1. to acquire new customers and
2. to retain the customers you already have.
Social media marketing may be the best and most cost effective media channel available to most small businesses (and sporting clubs). But, is there a market for it? 

73% of Australian small businesses currently don’t use social media and possibly don’t know how to get started.
27% of Australian small businesses are using social media, but are investing an average of just $65/week, which equates to approximately two hours of staff time.

Richard Branson stated in a recent LinkedIn article that “embracing social media isn’t just a bit of fun, it’s a vital way to communicate.”

If you’re a small business owner or provider of local sport please let me know what you think – is there a market in the gap?

Steve Hubbard
http://about.me/steve.hubbard

(*Interestingly and perhaps surprisingly, my home State of Victoria had the lowest use by any State with just 23% of small businesses using social media.)