October 31, 2014

Facebook and Small Business: A Match Made in Heaven?

facebook and small business.jpg

Facebook, under investors’ fire due to doubts whether it can generate income fast enough, is proving that partnering with small businesses saves the day: Advertising revenue is up by 61 percent to $1.6 billion – fueled by mobile and local ad sales.

Looking into the numbers, let’s just say that it’s about time for Facebook to capitalize on the assets. According to the new data released by Facebook, people are well-connected with small businesses on Facebook:

  • There are more than 2 billion connections between local businesses and people.
  • There are more than 645 million views on local business Facebook pages and 13 million comments on them.
  • Seventy percent of monthly active Facebook users in the U.S. are engaged and connected to a local business.

Those stats show that the market is there. So, is it safe to say that Facebook and small businesses is a match made in heaven?

I think so. Let’s take a look at things from both sides.

Facebook and Small Business

Facebook Needs Small Businesses

Facebook can’t deny the fact that it has to perform better to please investors. Facebook shares that were priced way below the IPO price of $38/share in 2012 have started nearing the IPO price, closing at $36.80 on July 31, 8PM ET.

Facebook acknowledges the impact of small business. Releasing a portal called Facebook for Business, the company actively persuades small businesses to use its advertising solutions.

Small Businesses Need Facebook

As small businesses are looking for cheaper advertising option, they need a place to promote their products and services. Google AdWords is one and Facebook Ads is catching up and gaining more attention – and more ad revenue.

Although Facebook ads’ effectiveness is still pretty much questionable in delivering results other than the increase in the typical metric of “likes,” small businesses are still counting on Facebook ads with the hope of getting brand exposure as well as new leads – and hopefully, more sales.

Some evidence in the form of case studies – such as this case study on how Miishka, a fashion entrepreneur who built a sustainable business entirely on Facebook and is attracting 1,000 buyers in 6 months – can give an idea or two for small business owners on what Facebook for Business can offer them.

But still, when it comes to ad effectiveness, seeing is believing.

Takeaway

The typical result of Facebook ads is the increase in Likes. However, Facebook Likes alone won’t matter if you can’t translate that into leads or buyers. Looking into the case studies, Facebook ads seem promising. However, you need to be aware that the case studies represent some of the best cases.

Achieving similar results is very much possible – but challenging.

So, what’s your take? Are Facebook ads effective for your organization or are they benefiting Facebook more than the advertisers?

More in: 18 Comments ▼

Ivan Widjaya


Ivan Widjaya Ivan Widjaya is the Founder/CEO of online marketing agency Previso Media, small business online magazine Noobpreneur.com and several other business blogs/online magazines. He is a Web publisher, Web property investor, blogger and Web property builder.

18 Reactions

  1. Great post, Ivan! However, I think we should add that Facebook is not the best option for all small businesses. Sure, it’s great for the fashion world and definitely a win for business to consumer (B2C) companies. The problem is that it is not very conductive for (most) business to business (B2B) growth.

    Every new change made to the Facebook platform makes it more difficult for businesses to connect with other businesses. Unless it is a co-working space or similar, LinkedIn is a better option for B2B companies.

    • Shannon,

      I agree that LinkedIn is the go-to social site for B2B. I think Facebook focuses heavily on B2C market – unless we use Facebook Ads to target business pages on Facebook; but yes, it’s limited compared to LinkedIn.

      I just heard from a relative that his Facebook ad is a success, bringing in buying customers to his small business. So, yes the ROI is there and Facebook ads are not as ineffective as what many mention.

  2. It is not a match made in heaven if you like you business associated with a social media site that will not delete, Rape, gore, child porn and doesn’t protect children by adding a child abuse report button. You do report these things but facebook will not remove the disgust. They say it is top priority but that is a lie.

    • Thank you for bringing the topic up.

      I think if we all keep talking about their inaction and that it is unacceptable, eventually it will get through to Facebook. Twitter just recently assigned more staff to look at abusive accounts/tweets, after an outcry. So public opinion does matter on these things.

      – Anita

    • Me,

      Unfortunately, that’s major issues with open-for-public social media site. Even on business social network like LinkedIn we can easily find spams totally unrelated to business on LinkedIn groups.

      I agree that Facebook needs to combat those stuffs, but IMO the best thing you can do is to block the users sharing such updates and remind our colleagues, friends and family to connect with trusted people.

      Well, people attract people alike – and that should also be the case on social media; unfriend people you don’t want to, well, be friend with.

  3. Facebook is a wonderful platform for small businesses because it allows you to reach your target market without the hassle of chasing after them. They are already there on Facebook. You just need to show them your products and services.

  4. Likes are important because it expands the network of people that your business can reach with their updates. And then with the advertising solutions, it determines how widely you can “boost” your posts as well. So even though there isn’t direct value in a like, it has value down the line as you use it.

  5. I think Facebook is definitely a must-have for all businesses but the level of advertising should depend on your company. The ability to connect with Facebook with potential customers is too good of an opportunity to pass up – unless you’re in an EXTREMELY specialized, niche business.

  6. Nice job, Ivan.

    I’ll admit it; I’ve tried a couple of inexpensive ad campaigns on Facebook. My exposure increased by not too many clicks on the blog posts that i promoted.

    So far, I’m disappointed.

    The Franchise King®

  7. Facebook is just one of many marketing messages to be used. Each business needs to reach their customers with a platform that pushes them to buy. Some customers react to Facebook, others to email marketing and some to LinkedIn.

  8. No matter what your marketing goals are, Facebook doesn’t just spend time stumping for its promotional offerings. It also includes general (non-advertising) tips on optimizing your page, thinking about your audience, and considering the type of content you post. For businesses in a number of specific, vertical industries (automotive, gaming, financial services), Facebook further refines its advice on how best to leverage its offerings.

    • Martin,

      I think it’s Facebook’s best interest to educate small businesses. It’s also small businesses’ best interest to know exactly what a platform is offering them.

      Just like any ads, copies, the choice of color, the choice of design element, the call to action, etc. will determine the effectiveness of an ad.

      Again, Facebook ads work; if you target the right audience with the right offer.

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