According to BIA/Kelsey’s Local Commerce Monitor, Wave 18?, 72.2% of the SMBs (small- to medium-sized businesses) surveyed* use Social Media to promote their business. Of the different social media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, Facebook Page ranked the highest, followed by LinkedIn and Twitter. Facebook ads were close behind in fourth place. Instagram and Pinterest, which didn’t make the chart below, are achieving traction — each has close to a 10% reach.

Social media can provide SMBs with an immediate and interactive connection with their customers. So how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on social media? In our survey we asked several questions on the satisfaction of the various advertising and marketing choices made. It should be noted that only SMBs who reported using a particular media were asked for their ROI assessment of that media.

While only 15.2% of SMBs surveyed reported using Facebook ads to advertise and promote their business, they gave it the highest combined ROI of Excellent (10-19x spend) and Extraordinary (more than 20x spend) of the social media in the survey, at 37.3%. Instagram and Other Social, which 8.1% and 5.4% of SMBs surveyed, respectively, reported using for advertising and promotion, tied for the next highest combined ROI at 30.6%, followed closely by Twitter ads at 30.5%. Instagram and Twitter ads both had more respondents rating them Extraordinary than Other Social. LinkedIn, which was second among SMB users, was ranked lowest of the social media, with combined perceived ROI (Excellent and Extraordinary) of 18.6%.

SMBs in our survey on average spent 21.4%, or $7,638, of their annual advertising and promotion budget on Social Media players, such as Facebook and Twitter.

Local Commerce Monitor? (LCM) is BIA/Kelsey’s ongoing survey of the advertising behaviors of small and medium-sized businesses (SMBs). To learn more about our LCM survey, click here.

*From the Full Sample.

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As Instagram finds ways to monetize and expand internationally, some smart players in the local media space are already learning how to use it as a marketing and “presence” tool for SMBs. We discussed with MomentFeed and Ghengis Grill in this week’s conference video (embed below).

Instagram’s use by SMBs is something we’ve covered since our September conference with Perry Evans at Closely. It’s in fact the social sharing product that is showing the most user activity on Closely’s Perch platform. This plays out as users capture and share local moments via filter-laden photos.

This has become particularly fitting to the hipster-ific foodie set, which means an opportunity for restaurants. The question is how can restaurant owners (or other verticals) capture the Instagram action happening around their businesses. The answer is the Perch’s and MomentFeed’s of the world.

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There has been some heated discussions about teens and their decline in Facebook usage in 2013. Warnings that Facebook will earn its spot as the next “has been” social media website alongside Myspace are circulating the web. According to a study by Socialbakers, total reach of Facebook brand pages among teens ages 13-17 fluctuated throughout the year but ended 2013 in about the same realm it began. The teen’s age group was the only one in the study that did not have a substantial increase in reach in 2013 (29.1%).

So why did reach among teens remain stagnant in 2013? A very high level of market saturation among 12-17 year olds undoubtedly played into it. eMarketer estimates that “95.9% of social networkers ages 12-17 used Facebook in 2013.” With numbers that high, remaining stagnant is not so bad, however, future decrease is likely.

In Facebook’s Q3 2013 earnings call CFO, David Ebersman acknowledged that Facebook “did see a decrease in daily users specifically among younger teens.” Facebook’s rapid growth among older age groups is a big turn off to teens. Looking back at the Socailbakers study as noted by Marketing Charts, reach among ages 45-54 was up 69%, reach among ages 55-64 was up 71%, and reach among the study’s oldest age group (65 and up) was a whopping 74% higher at the end of 2013 than it was in the beginning. With most teens looking for independence, having their parents and grandparents on Facebook compromises its ability to give them that.

As a result, teens are not necessarily ending their relationships with Facebook, but are expanding the number of social media sites they use. According to a study by GlobalWebIndex, mobile chat services, video-sharing apps, and photo-sharing apps are becoming the new cool thing. Luckily, Facebook has its various acquisitions keeping it in the teen social media game. Facebook owns Instagram which has seen an 85% increase in teen usage in 2013. Most recently, Facebook announced that it would be acquiring the mobile messaging company WhatsApp for $19 billion. WhatsApp had an 81% increase in usage among teens in 2013.

To learn more about Facebook’s WhatsApp acquisition, check out BIA/Kelsey‘s post WhatsApp with $19B Acquisitions These Days? by Mike Boland.

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Facebook’s acquisition of mobile photo app Instagram earlier this week wasn’t especially surprising (though the $1 billion price tag may have been). Mobile is a fertile, untapped channel for the social giant, but a growing risk factor the longer the opportunity remains unrealized. And with $5 billion to $10 billion in cash reserves expected after its IPO next month, Facebook could quickly become an aggressive and powerful buyer in much the same way Google has.

BIA/Kelsey foresaw this specific acquisition months ago when Facebook first filed its S-1, as explicated in our February IPO report:

“Facebook will soon have enough cash to buy its way into most opportunities. The question is where will it spend? As it invites deeper sharing through the expansion of Open Graph, Facebook will consider buying sharing apps that fit the vision of its platform. Likely genres are photo (Instagram, Path, Pinterest) and video (Klip, Tout).”

Instagram has exploded onto the tech scene as a leading photo-taking-and-sharing platform, raising $57 million over the past 14 months to create delightful visual experiences through unique filters for its mobile users. It’s a mobile-first and mobile-only product, though one without any material revenues.

What’s more compelling than what Facebook is acquiring, though, is what it is actually buying (figuratively) — and here, those have two very different meanings.

Facebook’s richest asset, even if not fully monetized, is its expansive and engaged user base — 845 million strong. That base is swiftly migrating to mobile. In the cases of younger audiences and users in emerging nations, the Facebook desktop experience may be bypassed entirely. More than 50 percent (50.3 to be precise) of that base now accesses the network on mobile devices. Yet Facebook makes not a drop from the channel.

Recently, it began experimenting with Sponsored Stories inside mobile news feeds, a first step toward monetization. Facebook’s effort to redefine the mobile advertising experience through social context is still in its embryonic phase, however. The network needs time to fertilize the strategy, scale it across its massive base, and translate it into a revenue game-changer. It can’t do that if the rapidly growing mobile base departs for other pastures (or platforms), or even spends less time engaging within its walls. Photo tagging and sharing has been the greatest stimulant to growing Facebook’s engagement and time on site metrics. These behaviors and metrics must be safeguarded, and even extended, on mobile. Instagram posed a threat.

Yes, Facebook’s buying a direct competitor in the all-important photo domain. And with Instragram comes a talented team that can bolster its mobile platform, even as Instagram remains a standalone app. But what Facebook is really buying for $1 billion is…TIME. Time to figure out mobile in a multibillion-dollar way before the user base, and the opportunity, erode.

Now, what will it buy next? Mark Zuckerberg claims that he “won’t do many more of these [types of acquisitions], if any at all.” However, considering Facebook’s outsized goals, which we believe include creating a ubiquitous payments system and building both advertising and content distribution networks, then the spree may just be starting.

We’ve long thought that with Facebook’s deep hooks into third-party sites through Connect, which enriches its already-robust social data trove, the network is well-positioned to launch an ad network across both desktop and mobile. As such, it could have its eye on a demand-side platform, sell-side platform, or ad exchange that improves its ad targeting and delivery capabilities (akin to Google’s acquisitions of DoubleClick, AdMob and AdMeld).

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