Can Facebook Win Over Small Business Advertisers?

    April 8, 2014
    Chris Crum
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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

  • JH

    No way they suck . . . Pinterest is miles better for products and I am ready to pay for promotions. I get direct sales from them for free and see no reason to make me think that will stop. So they get rewarded with $ because I feel it will ACTUALLY spark more sales. FB and GOOGLE screwed us in organic search…NO MO MONEY EVER for either of them.

  • Nancy

    I have run ads and seen zero positive results for my efforts/$$$. I also have tried, several times, the “boost post” feature – laying out $$$ for boosts. They approve the boost, then NOTHING happens – – no boost appears to be done. I write to them and ask them what’s going on, and they send an auto-generated, “we’ll get back to you”, but they don’t, then I watch my future credit card bill to make sure I’m not being charged for a service that wasn’t delivered. I though Mr. Z was more savvy than that. He’s leaving lots of $$$ on the table.

    • http://www.bloketoys.co.uk/ BlokeToys.co.uk

      You shouldn’t be paying anything to Facebook. Take a look on YouTube for some very informative videos where business owners and social network marketers have proven that it’s mostly fraud, that all you’re paying for is people in Bangladesh to like your ads.

      • sfpincchicago

        I concur. I paid to “Boost Post” ONCE. First, they didn’t like my post because the photo had too many words (we sell vintage pro wrestling & Mixed Martial Arts DVDs), then the one they DID approve, we saw the “likes”. Then, we checked out the page. NOTHING. No profile, no about, no timeline, no photos, nothing. It’s as if the page only existed to “like” when you pay for an ad. No interaction, no nothing, and in a month or two, the “likes” drop right back down to where they were. TOTALLY not worth it.

  • http://www.sbwebcenter.com/ Steve B

    Facebook ads is too expensive and it’s not that effective; at least in my experience.

  • http://www.bloketoys.co.uk/ BlokeToys.co.uk

    If you pay Facebook for advertising, go and check all those who have liked your page, check their location, check their interaction with your content, then tell me it’s worth it.

    Several studies by independent businesses have shown that a vast majority of likes that you pay for as a business are fraudulent. It’s pointless having 1,000 people liking your page when only 1% actually sees your content, and when 80% of those people are scammers being paid to like content in India.

    We have a FB page that we maybe look in on once a week to accept friend requests and post new information from the site, but we will never pay for ads on FB because it’s mostly fraud! We can get much better results from Twitter, and from persuading visitors to the site to sign up for our newsletter.

    • Nancy

      I too am seeing much better results from Twitter and Instagram, than from Facebook. Realized about 6 mos ago that FB advertising was a waste of time and $

  • William Camelot

    F.B. is great for “Branding” in local markets but when people wish to show pictures of their toe nails I think what..? Also local music does well here. I prefer Twitter and really “Love” paying for PitchEngine & of course video email…

    • http://www.bloketoys.co.uk/ BlokeToys.co.uk

      Local music does well because people seek out the band from live shows and word of mouth, they don’t get the following through advertising.
      The same with big brands, people seek them out, not the other way around.

  • William MATAR

    Ask me I paid so much for Facebook ads and Google Adwords. For me Adwords is much much better if set correctly… Maybe I give a very small credit for facebook if it is advertising a page inside facebook. But advertising a website in facebook is really bad and don’t give any good result… nothing… advertise websites in a well studied campaigns in Google Adwords… is really King!

  • Jeff Frownfelter

    I have a page with 1.3 million followers. I did pay several hundred to prime a following 3 years ago, but I then gained sufficient viral following. The thing is that my page is not-for-profit. We are just a group of counselors that post hope inspiring writings, and we do a great deal to respond to private messages by people who just need to talk. None of us are rich, so fortunately the page grew on its own after little investment. The thing is that Facebook has changed its ways so that a goodwill page, such as mine that has no revenue, gets buried. Even though I KNOW, based on my page’s historical natural growth, that there is vast appeal (hope is a great commodity). We are not being buried because of lack of appeal or doing the “meme” thing (which we didn’t). We are just being buried, because we do not make revenue to afford hundreds of $$ of ads per month. I have felt betrayed by Facebook, as I invested $$ into advertising under their formal strategy. I took that risk, and I was validated by the following I built. Now, not only do I not get increased following … I can’t even reach most of the people who ARE following me. It is a little like paying for space to set up shop in a building, but then the landlord decides all of the sudden to lock the doors so that customers can’t get to me. I am seriously considering changing platforms away from Facebook. I also am seriously considering paying top dollar out of my personal funds for a final wave of ads / boosted posts to educate people about what Facebook is doing, as I encourage them to completely change platforms with me. I feel certain that this will matter to at least half of my following, enough to bring about an Exodus. My followers came to know me personally, and many of them will not be happy to know about how Facebook has made my cause a low priority.

    • JW

      Same here. We are a nonprofit community foundation trying to share useful information for the community. But now that Facebook has pretty much shut down our ability to reach people who have gone to the effort to “like” our page because they wanted our content, Facebook has rendered itself useless for us. Reaching 1 percent of the audience we worked to get is not worth our time.

      I am now highly motivated to focus on Google+ and Twitter for our social media outreach.

  • Dolce Vita

    Don’t you think most people are on Facebook to see what their friends are doing and are not there to shop?

  • TZ

    I don’t mind paying for promotions if they work but Facebook does NOT work. My money is better spent elsewhere. Facebook advertising is actually very expensive little return on investment. When business owners see how little they benefit, they will just stop using Facebook altogether. I know we are seriously thinking about taking down our page.

  • Cheri

    Not effective considering the “likes” you are getting are coming from like farms. This video is a must see:

  • Lisa E. Romo

    Being on FaceBook and Google+ gives me little doubt that I won’t be spending money on FaceBook ads. While my reach on FB is at barely a pulse, the opposite is true for Google+. As a small business owner I am interested in results and I realize FB needs to bring a return on their investment. If I were reading or seeing that advertising is actually helping small business increase sales I would be intrigued but apparently not. While I am not contemplating taking my FB page down, unless results show more promise, I simply won’t spend $$$ to advertise on the page.

  • David

    I just recently spent about $350 on Facebook ads in an effort to see if advertising there had improved any since I tried it about 2 years ago. I advertised only to my BEST demographic, trying ONLY Texas for 2 days ($50/day) then only Florida for 2 days, and then only California for 3 days. I had a 4.45% CTR (which is HUGE on Facebook) and paid on average 10 cents per click. That means that I got about 3500 clicks to my website. Using Adwords/Bing/Yahoo ads I make 1 sale on average for every 233 visitors to my site. On Facebook, I made NONE. Facebook advertising results are pitiful in my experience IF you are trying to sell physical products there. I say for the most part because I do know of someone who sells t-shirts there and does ok sending traffic a Fan page where he pays 1-2 cents per click or like (I forget which) .

  • None of your business

    No. I predict Facebook will go down in flames and hope Google gets burnt in the process. No one goes to Facebook to buy things. Facebook is becoming more like MySpace. I don’t go there as much as I use to because it’s BORING!

  • foshizzle2

    The Jury is still out for me. I own two small businesses with a combined effort. On one I have seen a SMALL boost and the other I’ve taken a loss. I’ve noticed it works in spurts. Sometimes it works, I will do a boost for a special and NOTHING. Other times I will do a boost and I’ll see at least my money back (break even). I would be willing to await better tools before I give a better opinion.

  • FedUp with Facebook

    I fell into Facebook’s promise of great exposure. Some few thousand dollars later with no results to show for it I did some investigating. Before I go further, you should know I am an experienced web professional with a very, very successful web business, I am not a noob. It seems when you bid low on a key word, all of the traffic they send you comes from India or Africa. To get your ads seen by the US market, you have to bid huge amounts per keyword. As a facebook user I never did bid the huge amounts because I felt it was a waste. The trickery got me. Bid 50 cents a word and get only posted in India. Pay $2 a keyword you can get in the US market. That should have been explained UPFRONT and not have to be the result of my time researching and reviewing stats to figure out what happened.

    Google is worse in other ways. I took another approcah to advertising and it is working fine. Good old excellent content and link trading. I am getting more grassroots traffic that I ever got from google, fabebook or any other search. Yes it takes a bit longer but in the long run it’s cheaper and more effective. Today my sites rank under 200,000 on Alexa with no help from anyone.

    The only people that make money are the companies selling the advertising.

  • Unique Baby Suites

    We must be in the minority. I tried Adwords, and found I needed a huge budget or my ads wouldn’t show. Which for us just stating out as we are, can’t afford it. We tried Bing ads with same results. I then went to Facebook and within a week, made a sale. Our campaign is for clicks to website, which has also outperformed Adwords and Bing.

  • Captain Chocolate

    It used to work but does not seem to now. It’s hard to get money and there is no point in continuing paying for something that’s no longer working. Pity really – I thought I was onto a good thing and was pleased to pay for that.

    Captain Chocolate Australia

  • Andy

    We are a small charity working in the area of international relief of poverty and education. We do not have any budget for advertising but use Facebook as a way to keep our small band of loyal supporters up to date with latest news and developments. Recent analytics would suggest that only about 10% of our supporters now see our Facebook posts, which is going to have a serious impact on us. We did try one small advertising campaign a couple of years ago but it did not bring in any extra donations. We definitely will not be paying to advertise as it doesn’t benefit us at all. Just need to work out a different strategy to create an effective news feed.

  • Provpeter

    Why use a social media site that is boring and not fit for purpose as far as business and awarness purposes are concerned. FB is primarily used by people who want to wear their life on their sleeve.

  • NJ

    The non-profit-making organisation I am publicity officer for has been relying on Facebook to pass important news on to people who have liked our page. The steady decrease in organic reach has made this a pointless exercise, and I am currently recommending that we ignore Facebook as a viable channel from now on: we can’t afford paid-for “boosts”, and they wouldn’t do what we want anyway, even if they weren’t a blatant rip-off.
    Twitter works far better for us, even with the limited “bandwidth” and though we don’t get as many followers as we do FB Likes.
    (Google however is still serving us well.)

  • thesteve1000

    Difficult to swallow that the majority of our posts do not show up in the feeds of people who have liked our page. We have paid for ads and “boosted”posts in the past, but frankly, print advertising seems far more effective for us. We even use Facebook exclusively to launch new designs, but we have been re-thinking the effort we put in to Facebook.

  • Craig

    Hi, $1500 dollar campaign with Facebook staff training us along the way. 1 Sale generated and well over a dollar a click. Very expensive and ineffective for our company. It just doesn’t work for our business. Wish it did.

  • http://www.alliancemg.com Robin Lanier

    I manage small non-profit organizations and Facebook treats non-profit pages precisely the same way it treats for profit businesses. Yes, we are interested in gaining membership through social networking, but, more important, we want to use social networking to stay in touch, share information, and better inform our members. We also use Linked in and Twitter for this with some success. But the Facebook model, now that they are publicly traded, no longer really works for non-profits. The organizations that I manage don’t advertising budgets and really don’t have traditional products the way businesses do. Equally important, small trade groups or professional organizations may have only a micro audience of people with very specific interests, so the Facebook targeting approach is meaningless. I find it exceptionally frustrating that people come to our page and like it, but unless they engage they never see any of the posts we make on their news feeds and thereby miss important information. I truly believe Facebook needs to create another place for non-profits.

  • tink888

    I am a Social Media Manager and I used to spend most of our business advertising budget on Facebook. Now I don’t spend any money on Facebook. When organic reach was taken away, I found that even when I did spend extra money to boost ads, the ads would be delivered to people obviously working in click farms. This does not help our business.

    The McCormick Facebook reply to Eat24 recently, implied Facebook believed small businesses were getting too much advertising bang for their buck, and they should expect to pay more. Facebook seemed to see the owners of small businesses with a level of disrespect that wouldn’t even be tolerated towards a patron in a fast-food hamburger restaurant.

    Businesses spend what they can afford on advertising, but if advertising is not worth their money, they simply wont pay.

    I had difficulty accessing my FB page for a week recently, and had no responses from any of the Facebook platforms (made available for the purpose of contacting Facebook staff) even though I had ads running at the time and money was being taken by Facebook from our business account to pay for these ads. It is very difficult to contact any person who can actually help. I have since stopped all FB business ads via another staff member’s profile, but my profile that is attached to the main business page is still frozen.

    The beauty of Facebook is how it can give everybody a voice and a way to connect. It *was* non-discriminatory, but if advertising and business pages are made only affordable for big businesses, then FB essentially is taking away the wonderful diversity of pages that were available. They financially barricade small businesses, charities, start-ups, artist’s pages, general interest pages etc. that are unable to compete with business giants. And many of the ordinary Facebook participants look forward to reading a variety of pages. No person only wants to see pages pushed onto their feed from big businesses who can afford the new advertising costs. Organic feeds work for everyone, symbiotically giving everyone what they want.

    I believe Facebook is wealthy enough..and this reach for more money from businesses is coming from a place of greed. If millions of small businesses are spending just $30 a week, isn’t that better than all those businesses going elsewhere? Not to mention how Facebook can exploit ‘intelligence data’ for revenue. Facebook is not struggling to pay any bills it does not have a need to increase advertising prices.

    Facebook is a social platform in which the *masses* have a voice. If Facebook refuses to listen to the *masses*, the *masses* will refuse to give them their time.

    There are other platforms waiting in the wings.

  • http://www.shop.graciousstore.com/ Gracious Store

    I do not advertise on Facebook and never plan to do so. Facebook is not is a good marketing platform. Many people on Facebook are not there looking fr products to buy, they are there simply to socialize. Even if they click on adverts, it is not because they are interested in completing the purchase of such products but simply at of mere curiosity.