CNBC | Momentive Small Business Survey

Facebook privacy scandal won’t slow Main Street retailers' social ad spend

Laura Wronski, research scientist, and Jon Cohen, chief research officer, at SurveyMonkey
Facebook co-founder and CEO Mark Zuckerberg smiles at the conclusion of his testimony before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018, in Washington, DC.
Getty Images

Small businesses in the retail trade industry include some quintessential examples of Main Street America: bookstores, clothing retailers, gas stations, corner bodegas and auto shops. Like all small businesses, they have seen ups and downs over the past year, buffeted by major changes in tax policy and, more recently, great uncertainty around trade policy.

But more than small-business owners in any other industry, those in retail trade will have to adapt — if they haven't already — to a world that is more reliant on the internet. Among the most common forms of adaptation is Facebook, according to the second-quarter CNBC/SurveyMonkey Small Business Survey.

Even as Facebook continues to deal with the fallout from its privacy scandal, small-business owners in the retail trade are more likely to maintain (49 percent) or increase (15 percent) than pull back on Facebook advertising. That compares to the group of all small-business owners who plan to maintain (35 percent) their level of Facebook spending or who plan to spend more (11 percent).

Twenty-seven percent of all small-business owners said they plan to pull back on spending, versus 19 percent in the retail trade, the lowest level of pullback among the five sectors for which there are enough respondents to split out sector-level results. Retail businesses are also the most likely to have tried Facebook advertising (57 percent) at some point.

These data come from the second-quarter CNBC/SurveyMonkey Small Business Survey of 2,048 small-business owners conducted online from April 11–17, 2018.

63 percent of retail business owners say Amazon is bad

From its beginnings in the 1990s as a platform for selling books, Amazon was broadly perceived as a threat to exactly these types of small businesses. Independent bookstores, which were already threatened by big chains, like Borders and Barnes & Noble, knew they would end up having to compete with Amazon's wholesale prices and scale. Twenty years later that competition is still playing out.

Nearly a third (32 percent) of small-business owners in the retail trade industry say their business competes with Amazon for customers. That's four times as many who say Amazon helps drive customers to their business (8 percent). In no other industry do small-business owners sense the same degree of competition with Amazon.

Overall, 81 percent of all small-business owners say that their business is not affected by Amazon. Among those in the retail trade industry, just 51 percent say so.

This sense of competition may color these small-business owners' views of Amazon as a whole. Amazon provides opportunities to small businesses — through advertising and by serving as a marketplace for goods — but these seem to be discounted by small-business owners who have to compete with the tech giant for customers.

Most small-business owners in retail trade (63 percent) say Amazon is, in general, bad for small businesses, and just 14 percent say it is good. Those numbers are stark compared with small-business owners overall, among whom 44 percent say Amazon is bad for small business and 31 percent say it is good.

Do you think that Amazon is good for small businesses?

Response All Small Business Owners Small Business Owners in Retail Trade Non-Small Business Owners
No effect21%17%21%

Even among the general public (who do not own small businesses), 28 percent believe Amazon is good for small businesses and 47 percent say it is bad.

One way Amazon is attempting to win over small businesses — and, by default, increase its own dominance in the marketplace — is by creating Amazon Storefront, a platform that businesses can use to advertise and sell goods on

Overall, just 5 percent of small business owners have an Amazon Storefront account for their business. Those in the retail trade industry are the most likely to have Amazon Storefront accounts, as 11 percent do. These small-business owners are also more likely than others to have web pages and Twitter accounts — both of which are useful tools for small businesses trying to attract and retain customers — and they are more likely to have Facebook pages for their businesses, which reveals more about the current climate for small-business retailers today.

Facebook is dominant for small-business retailers

About 7 in 10 (69 percent) small-business owners in the retail trade industry have a Facebook page for their business, well above the average for small-business owners in general (48 percent).

Does your business have any of the following?

Platform All Small Business Owners Small Business Owners in Retail Trade
Web page50%61%
Facebook page48%69%
Twitter account18%24%
1-800 number14%13%
Amazon Storefront5%11%
None of the above31%16%
No answer2%4%

Those in the retail trade industry are also more likely than small-business owners in other industries to advertise on Facebook. More than 4 in 10 small-business retailers (42 percent) have advertised on Facebook within the past few months, compared with 25 percent of small-business owners generally. Another 15 percent have advertised on Facebook more than a few months ago, while just 38 percent have never advertised on Facebook.

This strategy pays off. Among people who are not small-business owners themselves, nearly 8 in 10 (78 percent) are Facebook users, about half of whom say they use Facebook several times per day. A quarter (25 percent) of all Facebook users have made a purchase after clicking on a Facebook ad, and twice as many (49 percent) say they follow local small businesses on Facebook — more than the 39 percent who follow major brands or companies.

Facebook usage and purchasing habits

Facebook usage Have made a purchase after clicking a Facebook ad Follow local small businesses on Facebook Follow major brands or companies on Facebook
All users25%49%39%
Use FB several times a day35%64%50%
Use FB about once a day24%48%37%
Use FB a few times a week16%37%28%
Every few weeks10%26%21%
Less often6%18%17%

Facebook's versatility may be the driving force behind its high rates of adoption among this subset of small-business owners. It is all things in one: a website where people can learn about a business, a community where business owners can interact with their customers, a marketplace where retailers can sell goods and a platform for advertising.

By Laura Wronski, research scientist, and Jon Cohen, chief research officer, at SurveyMonkey. The CNBC/SurveyMonkey Small Business Survey is conducted quarterly using SurveyMonkey's online platform and based on its survey methodology.