Can Facebook Win Over Small Business Advertisers?By: Chris Crum - April 8, 2014
Facebook has over 25 million Pages run by small businesses. Facebook’ s global director of small business Dan Levy announced that stat in November. As organic reach continues to decline for all kinds of Facebook pages, the company is trying to get more small businesses paying for reach.
Do you advertise on Facebook? Has it been effective? If not, do you intend to give it a try? Let us know in the comments.
Facebook recently put together a group of twelve small businesses to form the Facebook Small And Medium Business Council. It’s made up of owners of businesses in the fields of plumbing, restaurants, education, gardening, theaters, shopping, etc.
It’s modeled after a similar concept Facebook has had in place with larger brands since 2011.
The idea, based on what Facebook advertising communications manager Elisabeth Diana told AllFacebook last month, is that the council will boost advocacy, and help collect feedback on how to make Facebook’s business products (presumably including its advertising platform) better for small businesses.
According to Fortune, “a good deal” of Facebook’s $7.9 billion in 2013 revenue came from small and medium-sized businesses, though as it notes, the company doesn’t break out the percentage coming from such advertisers, so that’s obviously speculation.
As you’re probably aware, it’s getting harder and harder for Pages to get their posts seen in the News Feed without paying. Facebook visibility has basically become a pay-to-play game after years of the social network providing free exposure that small businesses could use to get their messages out, build their followings, and reach their most loyal customers. That kind of thing is simply a thing of the past not. At least on Facebook.
According to AdAge, this was unsurprisingly a major point of discussion when Facebook’s small business council met last month. The article quotes Jim Donio from Eagle Theatre, one of the council’s businesses: “The challenge is how to get businesses to understand the value that’s there, since they weren’t paying for it at all and now they’re going to have to.”
It also quotes Levy, who has built up a team of “hundreds” of people doing outreach to small businesses whose ads are “under-performing”:
All the traditional things people think about — like a sales channel through YP or a call center — they’re all good, but we’re dealing with a scale that’s really unprecedented. And trying to figure out how you unlock that is intellectually fun, but really hard.
Meanwhile, we keep hearing about how brands are dissatisfied with the results they’re getting from Facebook ads. Facebook is all but forcing businesses to pay for ads, and there’s a lot of question about just how effective the channel really is.
There certainly are some success stories. That Fortune article, for example, talks about a consignment store owner who saw a sales boost from a targeted promoted post, and these are no doubt the kinds of stories the council and Levy’s team will be trying to play up with prospective small business advertisers.
“Martinovic is one of Facebook’s most successful small business advertisers,” the Fortune article goes. “She once paid thousands of dollars to put ads in local papers and have her business featured on the tourists maps the town produced. But in the past year, she’s quit all that. Instead, she budgets $5 a day on Facebook, and a couple times a week she invests $40-60 on a boost.”
She makes $23 for every $1 spent on the site, and saw a 30% jump in sales since using Facebook, it says.
Whether stories like this will win over skeptical businesses, however, is another question. Facebook might do well to give more stats representative of those 25 million businesses at large and for individual business types. The council should be able to help with that.
As the article says, “ the lion’s share of the business community is not spending ad dollars on Facebook. Yet.”
But it’s only been recent months that businesses have had their organic reach almost completely stripped away from them. They’re being faced with the question of whether to give in, and give Facebook their money for some exposure, or to simply look elsewhere, and put more focus on Facebook’s competitors like Google and Twitter.
Last week, we saw one business opt for the former, and shut down its Facebook presence after amassing 70,000 fans. Research has also been coming out in favor of Google+ for marketing and after-the-click engagement. It’s going to be very interesting to see if more brands begin to steer clear of Facebook altogether.
Do you own or work for a small business? How do you feel about the way Facebook is pursuing its strategy? What is your business’ reaction? Let us know in the comments.
Image via Facebook