The Impact of Online Marketing on a Small Business: Ambiance Study

This report examines the impact of online marketing on a small business, specifically focusing on Ambiance, a local boutique. The study investigates the effectiveness of current marketing strategies, including social media (primarily Instagram) and email campaigns. The research incorporates data from Instagram analytics, such as follower demographics and activity times, and email open rates to determine the best methods for reaching customers. A survey was conducted to gather customer insights on their social media and email usage, preferences, and the influence of marketing promotions. The findings reveal the importance of understanding customer behavior and tailoring marketing efforts accordingly to maximize customer reach and engagement. The report concludes with recommendations for optimizing online marketing strategies to drive business growth and attract more customers.

The Impact of Online Marketing on a Small Business
Mia Musso
Graphic Communication Department
College of Liberal Arts
California Polytechnic State University
Winter 2017

Table of Contents
List of Figures……………………………………………………………...i
Abstract…………………………………………………………………….ii
Chapter One: Purpose of the Study………………………………………..1
Chapter Two: Literature Review…………………………………………..3
Chapter Three: Methodology……………………………………………..10
Chapter 4: Results………………………………………………………...13
Chapter 5: Conclusions…………………………………………………...28
List of References………………………………………………………...32

List of Figures
Figure 1 - Gender & age range of Instagram followers…………………………4
Figure 2 - Top locations of Instagram followers………………………………...5
Figure 3 - Hours of the day Instagram followers are using the app……………..6
Figure 4 - Open and click rates of emails in six months…………………………7
Figure 5 - Highest open rate……………………………………………………..8
Figure 6 - Lowest open rate……………………………………………………...9
Figure 7 - Question 1: What is your age range?…………………………….....14
Figure 8 - Question 2: Do you have an Instagram account?…………………..15
Figure 9 - Age Ranges of respondents who do not have an Instagram………...16
Figure 10 - Question 3: If yes, how often are you on Instagram?……………...17
Figure 11 - Question 4: What is your primary email account?………………...18
Figure 12 - Question 5: How often do you check your email?………………....19
Figure 13 - How often the 21% of people without Instagram check email……..20
Figure 14 - Question 6: Following a business on social media vs. email……....21
Figure 15 - Question 6 answers from people over the age of 50……………….22
Figure 16 - Question 7: Participation in a promotion due to marketing?….…..23
Figure 17 - Question 8: Directly influenced from online marketing?…....…….24
Figure 18 - Question 9: Where did you see this promotion?……..…………….25
Figure 19 - Question 9 responses from people over the age of 50……………..26
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Abstract
The goal for this project is to explore the current social media methods of a local
business, Ambiance, and ultimately determine the best way to reach the most customers.
Knowing that the target audience is growing with new technology trends, I’m curious to
see whether or not our current marketing methods are reaching as many customers as
possible. By organizing a survey focused on social media and email usage, I will be able
to determine which strategy is most successful and efficient for our target market. With a
large age range among our customers, specifying where customers want to see a
business’s marketing can ideally benefit Ambiance and other small businesses as well.
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Chapter One
Purpose of the Study
Statement of the Question/Problem
With social media and Internet use at an all time high, I’ve started to question the
importance of marketing on various channels and the effect it has on companies. There’s
no doubt that social media and the apps that make it possible for people to connect in so
many different ways are continuing to grow throughout the younger generations.
Companies have incorporated social media more and more into their marketing strategies
to further advertise their businesses, but I’m curious to know what customers are looking
for and how businesses can reach as many as possible. I want to incorporate my current
job as a Marketing Manager to determine the most successful way to attract customers
through online marketing. I work at Ambiance, a local boutique in downtown San Luis
Obispo that is targeted towards women and sells clothing, jewelry, accessories, shoes and
more. A large part of my job is sending mass emails to our customer list and I’ve noticed
that the percentage of people viewing each email is very low. Given the amount of people
these emails are going to, the numbers should be higher unless I find that email is no
longer a competitor with other social media applications. In order to gain a better
understanding of what our marketing strategies need to be, I plan to research what
customers are looking for within their social media outlets or which ones they use more
to find information.

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Significance of the Project
My project is targeted to local business owners and marketing managers who are
looking to develop or improve their marketing strategy online. Comparing the current
strategies of the company with the new approaches of this project will hopefully clarify
the best and most efficient way to attract customers to the store. Although this
information will be directly related to one company, other businesses will be able to use
the results and conclusions to alter their method to marketing as well.
Interest in the Project
Over this past summer, I became the Marketing Manager for Ambiance and
became familiar with the marketing expectations very quickly. The business had social
media accounts before I was hired, but my position was created in order to have someone
focused solely on that task. The demand for photos to post on social media networks and
weekly mass emails was quite a surprise to me in the beginning. I know a lot of
customers around my age spend a significant amount of time on Instagram, but I’m not
sure that we are reaching all of them through our emails. I’m willing to experiment within
my own job to see if different marketing strategies or changes made will increase sales
and bring more customers into the store. I love the experience that I’ve gotten so far,
especially since I get to incorporate design into what I do, but I believe it could be even
more beneficial if I combine this experience with my project.

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Chapter Two
Literature Review
The growth of new social networks in 2000, dramatically transformed the
interaction between people and organizations that shared common interest in music,
movies, education, friendship, etc. (Edosomwan, Kouame, Prakasan, Seymour, Watson
2011). Social media, however, is different than networking. Social media is primarily
used to share information with a broad audience, while social networking is used to
engage people with common interests and build relationships throughout community (
Edosomwan, et al., 2011). Finding the balance between social networks and social media
would be very successful for a business within a community. Using social media is
definitely a great strategy to announce information, and social networks allow followers
to share that information with an even broader audience.
In order to determine the kind of strategies that should be tested, I need to gather
the current data from Ambiance and determine where there is room for improvement.
Social media can only help grow a business “after you develop a large following and
learn how to give [followers] what they really want” (Rampton, 2014). Ambiance has a
very strong amount of followers on Instagram, but I want to find out if our posts are
effective enough when followers are scrolling through their feed. Various articles share
information on ways they believe social media can grow a small business. “Identify
goals and objectives, let them know you’re human, use hashtags often, engage with

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everyone” (Rampton, 2014). These are just a few ways Forbes believes are the best way
to grow a business.
One of the first things I looked at for Ambiance was their Instagram account and
the statistics it fortunately provides on the profile. I was able to find information on the
age and gender of our followers, their location, and the time of day our followers are on
Instagram the most. All of this is helpful information for moving forward and planning
our strategies for reaching followers efficiently.
Figure 1 – Gender & age range of Instagram followers

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This figure shows the age range of our followers on Instagram and that 85% of
them are women, and 15% men. The top locations of our followers are all Central and
Southern cities of California. Our two locations are in San Luis Obispo and Paso Robles
so the majority of our followers are around this area. San Luis Obispo clearly holds the
majority of our followers and a lot of the customers that range from age 18-24 come from
Cal Poly. This is also important to consider given the price range of our products. The
prices tend to be quite expensive, and with a large amount of young college students, this
could affect the consistency of their business. Combining the usage of social media and
more promotions or sales, I will hopefully be able to determine if there is a better way to
attract this demographic of customers.
Figure 2 – Top locations of Instagram followers

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The last figure represents the different hours of the day that our followers are on
Instagram. Since my job requires me to post on the accounts three times a day, it’s
helpful to see which hours of the day would attract the most views and customers. There
is a strong amount of followers on their feed between the 7am-9pm, which leaves more
than 12 hours to make posts and reach as many people as possible.
Figure 3 – Hours of the day Instagram followers are on the app
Unfortunately I am unable to see this kind of information on the mail application
that we use, but it gives me some insight on the amount of time customers spend on
Instagram. Given the low number of opens from our mass emails, this could either mean
that Instagram is now the best way to reach the most amount of people, or that we need
to change the way our emails look or attract customers. I want to experiment with

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separate information given in emails and Instagram posts that encourage people to come
into the store to shop, and from there I can determine where the most people viewed the
information. Although I don’t have access to the same specific information as I do for our
Instagram, the program that we use, Mail Chimp, show results of all emails that will be
helpful.
Figure 4 – Open & click rates of emails in six months
This figure shows the last six months of email blasts and their open rate in
relation to the industry average open rate, shown in red. Our store has 2,380 subscribers
for email blasts and an average open rate of 15.9%. As you can see in Figure 4, the open
rate is above the industry average, however I’m unaware of what that is based off of or
how it’s determined. In general, I believe the current open and click rates can be
improved. Hopefully gaining more information about what our customers are looking for
will open doors to new ideas and improvement in these numbers.

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As you can also see in Figure 4, there is a clear low and high point for our emails.
I believe looking more into the details of these email to see if anything was done
differently than normal could also show whether or not there is something that attracts
more customers to open the email.
Figure 5 – Highest email open rate
This figure shows the highest open rate in the past six months, which was on November
9, 2016 and was 24.95%. This email was 10.97% higher than the given industry average.