Facebook, like many other companies, sees gold in the small business marketplace. Facebook is looking for ways to unlock this gold without building a large Yellow Pages-like local sales force.
I read with interest a recent Ad Age article that asks Dan Levy, Facebook’s director of small business, to explain how the company’s SMB strategy is evolving.
Ultimately, Facebook wants to persuade those managing SMB Facebook Pages to pay to “boost” successful posts. If they can achieve this at scale, it’s a sizable opportunity. The question is how. Google has avoided building or buying the massive local sales force, but it has had to develop a large reseller channel to hit the long tail. Facebook wants to avoid this path altogether, but it seems clear that it hasn’t cracked the code.
One measure Facebook has taken is forming a Small Business Council made up of an eclectic mix of SMBs (everything from a theater company to a plumber) that spend money with Facebook to drive leads. The council is being assembled to help Facebook understand how to tap into the SMB market. It’s similar to a model Facebook used to build its business with national brands.
Facebook’s challenge? Getting people who use the social network for free to see the value in spending money. The upside is obvious. Right now Facebook has about a million advertisers. But it claims to have some 25 million SMBs with Facebook Pages that don’t spend a dime.
Beyond the obvious channel issue is a real debate over whether Facebook is better for branding or lead generation. Many small businesses cannot afford the luxury of brand building. They need warm leads that they can convert directly into cash.