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August 22, 2016

Why Facebook Needs Small Businesses

“Facebook is uniquely positioned to answer questions that people have, like, what sushi restaurants have my friends gone to in New York lately and liked? These are queries you could potentially do with Facebook that you couldn’t do with anything else. . .”

Mark Zuckerberg, Co-founder and CEO of Facebook

Everyone is intimately aware of how powerful and vital social media advertising is for businesses online. Even more important than advertising is merely having a social presence on various platforms; Facebook in particular.

The social portal has revolutionized much of online communications and has become a ubiquitous force the world over. This is why it is reiterated again and again that existing on Facebook is crucial for brands. What is less discussed, however, is just how important small businesses are to Facebook and the future of its success.

The social media company is constantly catering to small professional outfits with the various tools it provides, advertising modalities, and a plethora of other business-centric features. And there is good reason for the constant updates and offerings that Facebook provides to smaller companies; it needs them in order to thrive.

In July, the social network published its second quarter earnings report which absolutely crushed analyst predictions and expectations in user growth. Revenue pulled from active users was $3.82 per person, up from $3.32, which alone is an epic stat. These new analytics reflect just how necessary small businesses are to the future of Facebook.

As it stands, there are currently more than 60 million businesses inhabiting the social space, with more than 10 million joining within the last quarter alone. The reason why these companies are vital to the financial growth and success of Facebook is that only three million of these businesses are investing in Facebook ads; the company’s largest and most lucrative revenue source. This leaves a whopping 57 million business that Facebook has yet to convert into advertisers on its platform.

Ad revenue is by far Facebook’s dominant source of cash flow with $6.24 billion acquired, as noted by the earnings report. Mobile ad profits made up a staggering 84 percent of this figure, coming in at $5.42 billion, nearly reaching the $5.8 billion that some analysts expected the company to generate in ad revenue overall. This means that mobile ad income is up 81 percent year over year for Facebook.

Facebook vice-president of small business Dan Levy spoke on why so many businesses advertise through the social outlet when he stated, “One of the things that’s interesting is more than 80 percent of our new advertisers start off with just simple page posts that they end up boosting with a little bit of money. They learn how to do it in the same way they would create content as a user. They see value and then they’re willing to invest the money from there.”

Levy understands that part of the massive spike in business’ adoption of Facebook is because of the variety of tools, pages and communication modalities the company provides to various types of brands. He touched on this when he said, “If you’re a local restaurant you can post your menu and specialize it. If you’re a local services business, you can put more info about how to contact you.”

He also shared this wisdom: “We’ve created ways for consumers to message a business, which we’re seeing an increasing trend of. We know that not all businesses are the same, and with more than 60 million businesses, there’s a diverse set of needs, so we’re really trying to create a product that’s both valuable to all businesses but specific to each one.”

Facebook provides such a diverse array of business-focused features to companies in an effort to draw them on to the platform and eventually convert them into advertisers; its plan seems to be working, and Facebook is well aware of this. States Levy:

“If you think of new businesses that are being created today, like niche consumer products, Facebook’s really the only place they can target and reach an audience for specialty designer socks, or other things it would be hard to advertise out to a broad public.”

But more than the tools that Facebook provides, there is also a vast selection of ad types that promoters can choose from. Everything from slideshows to video ads, all equipped with CTAs to help convert consumers into customers. In just the one month leading up to the earnings report, 2.5 million small businesses posted a video ad on Facebook. This is a massive win for advertisers as creating video ads used to be much more difficult and expensive. Levy echoed this by stating, “If you think about how hard it is to create a video ad — even five years ago it meant getting TV cameras and a production crew,” he carried on, “. . . today business owners can take their Smartphone out of their pocket; they can film something in a few minutes.” Rest assured that Facebook’s video push is far from over.

The fact is, when it comes to small businesses, Facebook needs them just as much as they need Facebook. In order for the social platform to continue its massive growth in ad revenue, it needs small businesses to become promoters. And small businesses need to continue leveraging and advertising on Facebook to drum up the awareness and sales they need to take the brand to higher degrees of success. The inseparable link between small businesses and Facebook is symbiosis in its truest form.

Does your business advertise on Facebook? How effective have the ads proven to be at driving your goals?


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Conscious online marketer, web executive, and multi-faceted writer Tina Courtney has been creating and fostering online innovations since 1996. Tina has assisted many clients in maximizing online production and marketing efforts, and is a staff writer for SiteProNews, one of the Web’s foremost webmaster and tech news blogs. She’s produced and marketed innovative content for major players like Disney and JDate, as well as boutique startups galore, with fortes including social media, SEO, influencer marketing, community management, lead generation, and project management. Tina is also a certified Reiki practitioner, herbalist, and accomplished life coach.  Learn more on LinkedIn, Facebook and Google+. Visit My Google+ Profile

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