In recent months there have been a lot of articles written about how Facebook is hurting or “failing” small businesses.
In November, Tech Times wrote that “Facebook is killing small business entrepreneurs”.
Last month, Fast Company published an article called “How Facebook is Failing Local Businesses“.
Are these stories exaggerated? It really depends on the business, but in general, probably. Either way, it seems worth taking a look at what the company said about small and medium sized businesses on its earnings call on Wednesday.
In her prepared remarks, COO Sheryl Sandberg said, “In Q2 of last year, we shared that we reached 30 million active business Pages on Facebook. This number continues to grow as more and more small businesses are using our free Pages product – and we remain focused on converting these Page owners into advertisers. One way we’re doing this is by providing simple, easy-to-use products; over 80% of new advertisers start with entry-level tools like a promoted post or Page like. We are increasingly focused on making sure these tools work well on mobile. We’re also educating marketers on how to use Facebook more effectively. We recently launched two online training resources: Blueprint, for large clients and agencies, and ‘Learn How’ videos for small businesses. These efforts are paying off. In Q1 we announced that we now have over 2 million active advertisers.”
She talked about SMBs more during the Q&A session at the end of the call. Here are her words on the subject (via Seeking Alpha’s transcript):
I think all marketers have the opportunity to do video, and that’s pretty exciting, including SMBs who would never be able to hire a film crew and buy a TV ad. We’re seeing those put videos in. Over 1 million SMBs have posted videos and done really small ad buys around them. And that’s pretty cool because I don’t think there are probably 1 million advertisers who have bought TV ads in that same period of time.
On SMBs, we have a very small test in the U.S. We started last quarter for buy-on Facebook, and that enables people to buy products from merchants with a buy button on Pages, and it is a product that is used and aimed at SMBs. We’re also very focused on helping SMBs have a presence, especially a mobile presence. 35% of SMBs in the United States, which is probably ahead of most other countries, don’t have a web presence at all, and an even smaller percentage of SMBs have a mobile web presence or any kind of mobile presence that works. And so Pages are a good and free and easy way to have a mobile presence, and that’s something we’re very focused on growing.
When you think about our marketer growth, I think we have an ability to grow both the number of advertisers who use our platform, but also the percentage of their business that we get. So 30 million small business pages continuing to grow. We have an opportunity to turn those businesses into advertisers and marketers, and that’s what we’ve done successfully and we’re going to continue to focus on that. And we do that by building very simple ad products.
And then when you think about the percentage of spend we have, what I said before on this call, which is we only have a small percentage of even our large customers, that’s true of our small customers, too. Now, there are some who spend a large portion of their budget on Facebook, but that’s actually very unusual. For most people, even when they start spending with us, we’re a small portion of their budget. And when you look at the consumer time we get, we are not getting the equivalent amount of time or resources from our marketers really of any size, and therein lies our opportunity to grow.
One of the things that has been the biggest thorn in the side of small businesses (especially those with lower marketing budgets) is the fact that Facebook keeps changing its News Feed algorithm in ways that prevent Facebook Page posts from being seen by more people without having to pay for visibility.
In fact, the company just announced more changes this week, which don’t look particularly good for these businesses. CEO Mark Zuckerberg addressed these on the earnings call as well, though his words probably aren’t of much comfort to those who have been suffering from these changes.
Facebook did make another announcement this week, which could potentially be good for small businesses with Facebook pages. It launched a new Android app that provides users with Facebook information for caller ID as well as business search functionality. These separate Facebook apps, however, don’t always gain a ton of users, so it’s hard to say what kind of impact this one will have.
Image via Facebook