Small business and the social dilemma

With the release of The Social Dilemma on Netflix, there has been growing chatter about the addictive qualities of social media platforms such as Facebook, Instagram and YouTube, and the negative effects of their dominance in our lives.

However, discourse tends to forget small business. The story most often told is one of big corporations - whether they be the social media platforms or big business advertisers - manipulating individuals to grow profits for their companies. We’re meant to sympathise with the parent who can’t get their teenager to talk to them because they won’t put down their phone, or with the young woman who suffers from low self-esteem due to spending too much time on Instagram.

So where does small business fit into this narrative? As usual, it shares some experiences with large companies and some with individuals.

Below I examine some of the pros and cons of the advent and popularisation of social media from a small business perspective.

Positive: cheap, accessible advertising

On Facebook, small businesses have access to the same advertising tools as large businesses. It can be thought of as a democratisation of the advertising space because anyone can create a business page.

Facebook’s artificial intelligence means that not only can you target customers based on their age, sex, and location, you can also target your ads to people with particular interests - for example, physical fitness, women’s clothing, veganism, horseback riding, multiplayer online games, adventure travel, do it yourself (DIY), wine, dogs, Japanese cuisine, and many, many more - and avoid wasting your ad on people who are unlikely to be interested in your product or service. You can also refine your demographics to target people in new relationships, new parents, people away from their hometown, and more.

(You can even target your ads to people interested in social media marketing).

This accessible and finely targeted advertising has been a life saver for many people pivoting their businesses online during COVID-19.

Negative: control in the hands of a few powerful companies

Then there is the issue of giving too much power to a handful of major multinational companies. Facebook and Google don’t have a history of being good corporate citizens and act as if they are above governments and regulation.

They can - and have - change how their algorithms work and how much they charge for advertising at any time, with little to no explanation. For example, when Facebook changed its algorithm so that news feed content was no longer displayed in chronological order, business pages had to rely more heavily on paid rather than organic advertising as it was no longer guaranteed that people who had liked the page would see its content. Now big businesses are at an advantage because they have more money to spend. Similarly, COSBOA is often contacted with stories of small businesses who paid a particular price to be on the first page of Google search results, and then suddenly had to pay much more for the same thing with no explanation.

Positive: building a community around the business

Social media allows small business operators to create and grow online communities around their businesses. Liking and replying to comments on Facebook and Instagram is an easy way to interact with customers and build relationships with them at home, outside of the physical boundaries of the shop or premise. You can ask them questions, run polls, run competitions, promote in-person events, and anything you can think of.

COSBOA’s CEO, Peter Strong, was once the owner of Smiths Alternative Bookshop in Canberra. He and his staff wrote Facebook posts from the point of view of the bookshop, as if it were a person.

Peter said “We had the best fun. It would write things like ‘the idiots dug up the road outside today, do you know how painful it is for people to dig your chin?’ One day it wrote a rant about what a rude bastard the shopping mall was. Another time it got asked out on a date by the sandwich shop down the road and posted on Facebook looking for advice. People loved it and got in a debate about whether the shop was a man or a woman. And then eventually they would ask the shops questions about books, like ‘do you have book x by so-and-so?’ So it became a marketing device. Then when I sold the shop the new person didn’t like that and Smiths became a business page.”

Negative: more work

Before social media, small businesses typically didn’t engage in marketing and promotion. Now that cheap and accessible marketing is available, there is a growing expectation for all businesses to have social media accounts. Growing and maintaining a social media presence creates more work for the over-stressed small business owner. There is enough continuous work in this area that large companies often have roles reserved solely for social media management, or sometimes entire teams dedicated to it. Small business owners have to do it on top of all of their other tasks such as managing staff, complying with local safety regulations, tax, superannuation, etc. Once again, big business has a competitive advantage.

Positive: the creation of new small businesses

The existence of social media has allowed more people to work for themselves as sole traders or start small businesses that wouldn’t have been possible before. “YouTuber,” “influencer,” and “social media marketing consultant” are jobs that didn’t exist fifteen years ago. Whether you love them or hate them, Instagram influencers and YouTube video content creators are small business operators, who, without social media, probably wouldn’t be working for themselves.

Negative: mental health impacts

The correlation between frequent social media use and low self esteem is well known. But should we be concerned for business page admins too?

For small business people, their business is often their whole life, or at least a major part of their identity. This is especially true when the product is themselves, their life, or their advice (as is the case for influencers).

It’s not unreasonable to assume that some will take it personality when their business posts don’t perform as well as expected or when their business receives a negative comment or review. Most social media platforms make it easy to become obsessed with tracking and chasing numbers, whether likes, reach, click throughs, or video watch time. Facebook, for example, periodically sends notifications to business page admins to tempt them to check how well the page is performing and tell them what they could be doing to improve their numbers (usually spending money).

In the Social Dilemma, we learned that notifications are designed to manipulate human psychology to get users to spend more time on social media platforms. One example used is that when a friend tags you in a photo on Facebook, you’re notified of the action but not shown the photo. Any normal human would want to see the photo, but you have to open Facebook to see it - and then you start scrolling, are intermittently rewarded with some dopamine, and the cycle continues.

No doubt Facebook notifications for business pages have the same motivation in their design. Some common notifications include “you could reach x many people per day if you boost your post for x dollars” and “see who liked your page.” These notifications are mixed in with personal notifications so that when a business page admin is lured onto Facebook to check their page, they can easily start scrolling through their personal newsfeed as well.

Ideally, research into the mental health impacts of social media use should study those who spend a lot of time on social media to promote their business too.

We don’t know if social media has been a net positive or a net negative for small business.

Whether you think Facebook advertising is fabulous or an ethically questionable chore probably depends on your personality. Some small business owners will be keen to learn all there is about social media marketing, be excited to grow their business’ presence on social media, and happily spend hours going over their analytics to come up with the best strategy. Others will see it as overwhelming and stressful, and long for the days of just putting a single ad in the Yellow Pages and being done with it.

One thing is for sure though: we shouldn’t forget small business. We should continue seeking feedback from small businesses about their experiences on social media platforms and advocate for transparency and regulation where necessary.


About the author: Tara is a COSBOA staffer who works on COSBOA's communications, including social media.