Services Marketing Quarterly

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Small Service Businesses: Advertising Attitudes

and The Use of Digital and Social Media Marketing

Henry S. Cole, Tom DeNardin & Kenneth E. Clow

To cite this article: Henry S. Cole, Tom DeNardin & Kenneth E. Clow (2017): Small Service
Businesses: Advertising Attitudes and The Use of Digital and Social Media Marketing, Services
Marketing Quarterly, DOI: 10.1080/15332969.2017.1394026
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Published online: 13 Nov 2017.

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 SERVICES MARKETING QUARTERLY
https://doi.org/ . / . .

Small Service Businesses: Advertising Attitudes and

The Use of Digital and Social Media Marketing
Henry S. Cole, Tom DeNardin, and Kenneth E. Clow
School of Management, University of Louisiana Monroe, Monroe, Louisiana USA

ABSTRACT KEYWORDS
Library] at 07:48 19 November 2017

Advertising is embraced by companies as a means of building Advertising attitudes; digital

awareness, sales, and customer loyalty. However, in recent years marketing; small service
advertising has changed. Digital marketing and social media mar- business; social media;
keting have gained a greater prominence (Lamberton & Stephen, social media marketing
2016). While megabrands spend millions of dollars on advertising,
small businesses often view advertising as an expense rather than
a means of generating revenue. Small service business owners are
often skeptical of the value of digital marketing and social media.
This study examines various digital and social media channels that
can be utilized to grow their business.

Introduction
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Advertising is an integral component of American society. It is embraced by

compa-nies and brands as a means of building awareness, brand equity, sales, and
customer loyalty. However, the rise of digital marketing and social media has
altered the adver-tising landscape. For the first time in U.S. history, spending on
digital and social media formats have passed advertising expenditures on
television (emarketer.com, 2016).
While megabrands such as State Farm and JP Morgan Chase spend millions of
dollars on advertising, small businesses often view advertising as an expense
rather than a revenue generator. The owners of these businesses tend to be
skeptical of advertising, primarily because results cannot be easily measured.
They are also skep-tical in the rise in popularity of digital and social media
marketing. Even though a number of metrics exist to measure impact, small
business owners are not totally convinced it will benefit their business.
The U.S. Small Business Administration defines a small business as an enterprise
that is independently owned and operated and is not dominant in its field (sba.gov,
2016). The size standard is dependent upon the industry and is based on the number
of employees or sales volume. An enterprise with fewer than 500 employees is often
considered to be a small business in the United States. There are about 28 million

CONTACT Henry S. Cole hcole@ulm.edu ULM College of

Business and Social Sciences University Avenue
Monroe, Louisiana .
© Taylor & Francis Group, LLC
 2 H. S. COLE ET AL.

of these businesses, and 71% are in the service sector. Approximately 120 million
people (over 50% of the working population) work in some type of small
business. About 65% of net new jobs since 1995 have been generated by small
business (sba. gov, 2016).
While small business can be a strong economic engine, the fact is that within
their first five years of existence, almost 50% of small businesses in the U.S. close
due to poor or inadequate marketing (Cronin-Gilmore, 2012). Perhaps advertising
and the use of digital and social media can play a part in helping small businesses
be more competitive, stable, and lasting (Eid & El-Gohary, 2013).
The objectives of this study are to examine the attitude of small business
owners within the service sector toward advertising and to examine their use of
digital and social media marketing. The results should be of interest to service
business owners, advertising practitioners, and marketing academicians. As Bell,
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Parker, and Hendon (2007) stated, without a proper understanding of how small
business owners view and use advertising, individuals studying in this area are
“navigating without a compass” (p. 1).

Literature review
Attitudes toward advertising are multidimensional and are complex and contro-
versial (Muehling, 1987). Wills and Ryans (1982) found polarized attitudes
toward advertising and Pollay and Mittal (1993) indicated that most respondents
had a conflict between an appreciation of advertising’s value and an apprehension
of advertising’s effect on culture. Some public policy makers and consumer
interest groups would argue that skepticism toward advertising is necessary and
beneficial because it protects consumers from unscrupulous and deceptive tactics
by advertis-ers (Koslow, 2000). It is how people cope with fraudulent marketing
practices and potentially misleading advertising claims. In fact, some consumer
affairs researchers believe so strongly in skepticism as a protective tool that they
promote the notion that consumers should be taught to be more skeptical of
advertising (Gaeth & Heath, 1987). Others, however, would counter this argument
by saying skepticism is counterproductive and can lead to distrust of advertising.
This distrust may cause consumers to miss products that would be beneficial to
them and to actually pay higher prices since they are skeptical of price discounts
and special consumer promotions (Koslow, 2000).
A number of academicians have examined various aspects of skepticism toward
advertising. One study, by Mangleburg and Bristol (1998), examined socialization
and adolescents’ skepticism towards advertising. They found that informational peer
influence and the amount of television teens watched to be positively related to
skepticism toward advertising. It was their belief that exposure to advertising through
television heightened the adolescent’s ability to discern advertising motives and, as a
result, led them to be more skeptical. Similar results were found by Boush, Friestad,
and Rose (1994). They found that with higher levels of knowledge about advertising,
the greater was the individual’s level of skepticism toward advertising.
 SERVICES MARKETING QUARTERLY 3

They also found a correlation between age and skepticism of adolescents, but it
was not strong enough to be significant.
Research by Calfee and Ringold (1988) found that the public tends to be skeptical
of advertising claims. Only about one third of consumers believe that advertising is
informative and truthful. In a later study, Calfee and Ringold (1994) concluded that a
majority of consumers believe that advertising is often not truthful and that it
attempts to persuade consumers to purchase items they do not want or need. How-
ever, these consumers also think that advertising provides valuable information and
that the benefits of advertising outweigh the disadvantages. In another study, Boush,
Kim, Kahle, and Batra (1993) found that a person with a higher level of education
tended to be more skepticism towards advertising.
The research of Eid and El-Gohary (2013) focused on Internet marketing, e-
mail marketing, intranet marketing, extranet marketing, and mobile marketing.
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They found that Internet marketing and e-mail marketing are the most commonly
used e-marketing tools by small business and that the adoption of such tools have
a positive impact on the success of these businesses.
Savage (2010) indicated that the potential usage of social media is tremendous.
Icha and Edwin (2016) believe that social media is at least as effective as tradi-tional
marketing. There are a number of benefits for small businesses in using social media
marketing. Logofatu and Alexandru (20012) stated that companies can use social
media to reach an international audience with less time, effort, and money.
Castronova and Huang (2012) said that through social media marketers can reach
their target markets in new and efficient ways. Small businesses realize that they can
gain value from using social media, but the benefits do not come without challenges
(Schaupp & Belanger, 2014). Boling, Burns, and Dick (2014) stated that while small
businesses have established a presence in social media, most have only a passive
presence. Although large corporations use social media for marketing, promotion, and
customer engagement, small businesses have been slow to do so. The primary reason
given is the lack of resources (Bakeman & Hanson, 2012).
Small businesses can efficiently use digital marketing and social media market-ing
to promote their businesses and engage consumers with their brand. Digital and social
media strategies can help small businesses become visible, viable, and sustainable
(Taneja & Toombs, 2014). A study by Hensel and Deis (2010) indicated that
entrepreneurs must know how to use digital and social media in a way that will
improve marketing efficiency. Research by Cesaroni and Consoli(2015) indicated that
it is important how small businesses use social media so that they can take full
advantage of these tools. Due to social media’s reach, companies are increasingly
using it (Kumar, Bezawada, Rishika, Janakiraman, & Kannan, 2016).
There have been studies relating to the use of digital and social media market-ing
by providers of services. The research by Koumpouros et al. (2015) revealed that
physicians and healthcare organizations in Greece must use such marketing to meet
their patients’ needs. The authors also said that a way to measure these efforts (like
all marketing efforts) was needed. Sriram’s study (2016) indicated that libraries can
use social media effectively for marketing their services. Sotiriadis and van Zyl
 4 H. S. COLE ET AL.

Table . Sample Characteristics (N = ).

Variable Category n %

Sales $–$ , .
Over $ , .
Full-time employees None .
employee .
– employees .
or more employees .
Part-time employees None .
employee .
– employees .
or more .
Gender Male .
Female .
Age – .
– .
and older .
Education High school .
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Some college .
College degree .
Graduate degree .
Ethnicity Caucasian .
Minority race .

(2013) found that digital marketing is imperative in the tourism industry. While
not a panacea nor a substitute for an integrated multichannel strategy, it is another
tool for marketing tourism services.

Methodology
Data were collected from small business owners throughout the United States.
The initial survey was tested using a small sample. Modifications were made
from this pilot test. The population of interest for the survey was all small
business owners who operated a service business in the United States. The Small
Business Administration definition of small businesses was used based on
industry, sales volume, and number of employees. The online survey instrument
was sent to 300 service business owners across the United States. A total of 201
usable, completed surveys were obtained, resulting in a 67% response rate).
The advertising attitude scale used in the survey was adapted from the skepti-
cism toward advertising scale developed by Obermiller and Spangenberg (1998).
The scale has nine items, and each item was scored on a 5-point scale (1 =
strongly disagree, 2 = disagree, 3 = no opinion, 4 = agree, and 5 = strongly agree.
The authors reported substantial evidence of predictive and discriminant validity
and coefficient alphas of .85 and .86 for first and second administrations.
Table 1 provides the sample characteristics. Approximately 77% of the f irms
had sales of $100,000 or less. This small size was also reflected in terms of
number of employees with 68.7% having just one full-time employee or none. For
part-time employees, it was 80.1% with either only one or no part-time workers.
Females represented 55.7% of the service businesses that responded. About half of
the businesses owners (54.2%) were between the ages of 51 and 65 with 27% below
 SERVICES MARKETING QUARTERLY 5

Table . Demographic and Firmographic Differences.

Variable Category M Sig. (p-value)

Gender No significant difference .(.)

Age No significant differences .(.)
∗
Education High school . .(. )
Some college .
College degree .
Graduate degree .
Firm size No significant difference .(.)

∗
Statistically significant.

the age of 51 and 19% above the age of 65. Approximately 80% had some
college (34.8%), a college degree (30.3%), or a graduate degree (14.8%). In
terms of ethnicity, 91.5% of the sample was Caucasian.
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Results
The first step in the analysis was to examine differences in attitude towards advertis-
ing based on the owner’s demographics and the size of the firm based on annual rev-
enue. Results are shown in Table 2. The owner’s gender and age were not
significantly related to the individual’s attitude toward advertising. The only owner
demographic variable that was significant was education. The higher the level of
education, the lower was the person’s attitude towards advertising. Thus, they were
more skeptical of advertising. In regard to firm size, no significance was found.
Respondents were asked if they utilized a number of different digital or social
media marketing strategies. Table 3 shows the frequency and percent of service
businesses utilizing each approach. Surprisingly, only 30.3% even had a company
website. This may be due to the fact that a large percentage of the sample were
one-person operations. As such, developing and maintaining a website was not a
feasible use of the owner’s time. Even a smaller percentage, 9.5%, conducted any
type of e-commerce, and 8.5% had some type of company blog.
Social media was used by 24.9% of the service operations and 23.4% engaged
in e-mail marketing. The least used strategies were digital coupons and the deal-
of-the-day promotions such as Groupon, each with less than 5% of the sample.
Less than one third (30.3%) of the service businesses used smartphones, and only
about half (16.4%) of those used any type of business app with the phone.

Table . Digital and Social Media Strategies (N = ).

Digital or social media n %

Company website .
E-commerce .
Company blog .
Social media .
E-mail marketing .
Digital coupons .
Deal-of-the-day promotions .
Use smartphones .
Use mobile apps .
 6 H. S. COLE ET AL.

Table . Digital and Social Media Differences.

Variable Categories M Significance test
Company website No significant differences .(.)
∗
E-commerce website E-commerce function . .(.)
No e-commerce .
Blog No significant differences .(.)
Social media No significant differences .(.)
∗
E-mail marketing Use e-mail marketing . .(. )
No e-mail marketing .

∗
Statistically significant.

Table . Attitude Toward Advertising Categories (N = ).

Category n %

Advertising skeptics .
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Advertising neutrals .
Advertising believers .

The next part of the analysis examined if there were significant differences
between the use of each of the digital and social media strategies and attitude toward
advertising. Table 4 shows the results. Having a company website was not
significantly related to attitude towards advertising. However, if that website was
used for e-commerce, then there was a significant difference with companies having
an e-commerce website displaying a more positive attitude toward advertising.
Companies with blogs and social media presence did not show any significant
differences. If a company engaged in e-mail marketing, then that company tended to
have a more positive attitude toward advertising. Because of the small sample size,
digital coupons and deal-of-the-day promotions were not tested.
Attitude toward advertising was measured by summing the scores of nine ques-
tions. To examine if attitude toward advertising was related to satisfaction with the
various digital and social media strategies, the attitude toward advertising sum-mated
variable was grouped into three categories (shown in Table 5). The service business
owners that had the lowest summed score toward attitude across the nine measures
were called advertising skeptics. The individuals that had the highest scores across
the nine measures were called advertising believers. The goal was to make each of
the two extreme groups about 25% of the sample with the middle group comprising
the remaining 50% of the sample. This larger group was entitled

Table . Advertising Categories and Satisfaction with Digital/Social Media Strategies.

Advertising category
Digital/social media strategy Skeptics Neutrals
Website . .
Blog . .
Social media . .
E-mail marketing . .
Believers F-value (Significance)
. .(.)
∗
. .(.)
∗
. .(.)
. .(.)

∗
Statistically significant.
 SERVICES MARKETING QUARTERLY 7

advertising neutrals since they did not seem to display a strong level of
skepticism towards advertising nor a strong positive attitude.
ANOVA tests were used to compare the attitude toward advertising of the
owner of the service business and the level satisfaction with each of the digital
and social media strategies. Two of the four strategies were significantly
different: blogs and social media. In both cases there was a positive correlation
between attitude toward advertising and satisfaction with the blog or social media
marketing strategy. No relationship existed between just having a website and
attitude toward advertising. The same was true for e-mail marketing.

Discussion
Advertising has become a cornerstone of American society and is used by almost all
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brands and businesses to some degree. Budgets for advertising range from millions
for large brands such as State Farm and McDonald’s to extremely small budgets for
sole proprietorships with only a few or no employees. The challenge small businesses
face is budgeting enough advertising dollars to compete effectively in the market-
place. This challenge is further compounded by the delayed impact of advertising and
the challenge of measuring its impact. Without concrete data to support the benefits
of advertising, small businesses often see advertising as a cost rather than investment
to generate future revenue. This is especially true for smaller businesses, those
generating an income below $100,000.
An important determinant of advertising budgets is the small business owner’s
attitude toward advertising. Logically, an owner who has a positive attitude
towards advertising would be willing to invest greater dollars than someone who
does not. This research found that the owner’s level of education was inversely
related to atti-tude advertising. The less educated owner was more positive in
their attitude toward advertising. This finding seems to correlate with research by
Boush, Friestad, and Rose (1994) that found individuals with a higher level of
knowledge of advertising tended to be more skeptical. More research needs to be
conducted to verify if this phenomenon is indeed a characteristic of small
business owners, or if it was unique to this sample.
One reason digital and social media marketing has grown so rapidly is the
ability to measure results, especially compared to traditional advertising. The
most sur-prising finding of this research was that only 30.3% of the small service
businesses surveyed had a company website. Future research needs to be
conducted to see if this is the norm for small service businesses or if this sample
is unique in some way and under-represents this facet of small service operations.
Of those companies that have a website, less than one third use it for e-
commerce. This could be due to the type of service business in the sample, or it
could be a unique facet of this sample. But, if this finding is true for small service
operations, it is disturbing. As society continues to move toward a digital
economy, having such a low percentage of service firms conducting e-commerce
operations is an indicator that these service businesses may not survive.
 8 H. S. COLE ET AL.

In terms of digital and social media marketing strategies, the most popular
were e-mail marketing (22.4%) and social media marketing such as Facebook
and Twitter (24.9%). Although, these were the most popular, less than 25% of
service operations have any type of e-mail marketing programs and have a
presence in social media. Again, because of the popularity of smartphones, the
Internet, and social media, consumers are spending more time on these platforms
than with traditional media. Service businesses that fail to use these strategies
may lose a large percentage of their customer base.
This study does not show cause and effect, rather it illustrates the presence of a
relationship. The analyses examined attitudes toward advertising based on the service
business having a company website, e-commerce, blog, social media, and e-mail
marketing. It can be debated which drives which or if there is actually a co-
relationship. Thus, is it the use of digital and social media marketing strategies that
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drive a positive attitude towards advertising, or is that the positive attitude towards
advertising that drives the use of digital and social media marketing strategies?
Of the four that were examined, the company blog and the use of social media
displayed a positive relationship with the attitude towards advertising. The
stronger the attitude service business owner had toward advertising the greater
the level of satisfaction with the blog and social media marketing strategies.
Having a presence on social media such as Facebook, Twitter, or Instagram
allows the small business to reach consumers and engage them with the brand.
Metrics available through Facebook and other social media platforms allow the
small busi-ness to have an idea of how much traffic, interest, and sales are being
generated through the social media marketing efforts.
In terms of digital marketing strategies, e-mail marketing was the most widely
used by the small businesses in this survey. However, there was no significant rela-
tionship between satisfaction with e-mail marketing and attitude toward advertis-ing.
Reasons for this lack of a relationship would be mere speculation, but it is impor-tant
to note such lack of a significant relationship. Future research needs to con-ducted
that examines the type of e-mail marketing that is being done, the success of the e-
mail marketing, and other facets that may explain this lack of a relationship.
This study is a logical start on examining the use of digital and social media
mar-keting strategies by small service businesses and the owners’ attitudes
toward adver-tising, digital marketing, and social media marketing. Future
research is needed to explore this topic further, especially in the area of digital
and social media market-ing strategies. Small firms often feel pressure to copy
the strategies of large brands but may lack the expertise and skill needed to make
the digital and social media marketing strategies successful.

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