Angela Swartz | March 25, 2015

How Facebook is courting small businesses and their advertising dollars

As cash-strapped small businesses in the Valley try to find ways to promote their companies online, Facebook's been trying to find ways to entice the companies that might not have the budget for a social media team.

That means training sessions for local businesses on how to manage Facebook marketing pages and refining its targeting tools to be useful for small markets. The pressure's on for companies to get savvy about their social media marketing: Facebook recently ramped up its efforts to filter out repetitive unpaid advertising posts on its network.

Last quarter was the first in which Facebook made more than $3 billion in ad revenue, said Chief Operating OfficerSheryl Sandberg in a fourth-quarter 2014 earnings call. The company doesn’t disclose how much of that advertising came from small businesses, but it did say it is a significant portion of its revenue.

That's why it's targeting small businesses like Menlo Park-based Kepler's Books, which now spends more on its Facebook ads than it does on newspaper ads, said Jean Forstner, director of programming and operations for the bookstore.

There are currently 30 million pages on Facebook and 2 million advertisers. The size of the population these pages and advertisers could potentially reach is large, too. For December 2014, there were 890 million daily active users on the site, while as of Dec. 31, 2014, there were 1.39 billion monthly active users.

Forstner, who attended a training session at Facebook, said the bookstore has had a page for quite a while, but has used Facebook ads to promote its events for the last couple of years.

“Small businesses don’t have a budget to have two to three people manage social media, and the ad interface has changed over the last couple of years, so we found out a little bit more about how to target people who would be interested in attending,” she said. “The one thing I appreciated is I think they understood a small business would approach this differently than other businesses.”

Facebook’s director of small businesses in North America, Jonathan Czaja, said one of the goals of the training sessions is to get small businesses to talk to each other about the best ways to operate.

“The end goal is to get people into the store and to attend events (at the businesses)," he said. "Small businesses learn best from talking to other small businesses — they share stories at the events.”
He said the company does see some small businesses make mistakes while using Facebook's platform that seriously stifle their ability to market well, but training helps combat this problem.

“The truth is a lot of small businesses are time-strapped,” Czaja said. “We do see a lot of challenges of good creative aspects of the ad — like compelling photos and copy.”

Still, the ads have to hit the right people. During the fourth-quarter earnings call, Sandberg highlighted Custom Audiences, the suite of proprietary targeting products, as an essential tool for small businesses.

"We’ve made it easier for businesses of all sizes to plan and manage their ad campaigns and for small businesses to use our targeting tools," she said.

Also, through Local Awareness ads, companies can target people in certain locations, of certain ages, genders and interests, while creating a lifetime budget, start and end date for the ad and other settings. For example, you can choose for your ad on Facebook to target 25-year-old males who like snowboarding.“

With digital ads, it’s much more easy to track the effectiveness of your ads,” Czaja said. “You can see how many people came from a Facebook ad — it’s the holy grail of marketing for a lot of folks.”