An innovation diffusion approach to examining the adoption of social media by small businesses: An Australian case study

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.