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Facebook’s Promoted Posts Program Puts Financial Squeeze on Some Small Businesses

Facebook’s Promoted Posts Program Puts Financial Squeeze on Some Small Businesses

By | 10.14.12
Facebook’s Promoted Posts Program Puts Financial Squeeze on Some Small Businesses

It wasn’t that long ago that Facebook Fan Pages were heralded as the great equalizer for small businesses attempting to compete with larger companies for their piece of the online marketing pie.  Theoretically, even small mom and pop businesses with shoestring budgets could compete in the same arena with Fortune 500 companies.

A new wrinkle has been added with the launch of Facebook’s “promoted posts” this past May.  Under the new program, businesses must now pay to have their posts distributed to the news feeds of people who have “liked” their page.

There has always been a limit on the number of posts users can receive through their news feeds, and according to Facebook, only about 16% of the updates businesses post actually reach their fans. Promoted posts allow businesses to increase their reach – but at a cost.  Promoted posts can range in price from a few dollars to hundreds of dollars, depending on how many Facebook users the business wants the message to reach.

Many small business owners feel the time and energy they spent building their Facebook following was wasted because they simply can’t afford to communicate with them using Promoted Posts.

Caterer Richard Bishop of Mountain Home, Idaho says he posts on Facebook approximately 35 times per week. He estimates it could cost at least $9,100 annually to promote each post to his 1,500+ fans. With Promoted Posts, Bishop contends the social media giant has effectively “devalued the value of a fan.”

In recent years, millions of small business owners have come to rely on Facebook as their primary marketing vehicle, and the company’s ever-increasing menu of fees has left many of them at a huge disadvantage when competing with larger, financially stronger businesses.

Facebook says the popularity of the Promoted Posts program “has significantly increased over the past three months.”  Restaurateur Joe Sorge spends about $1,000 monthly on Promoted Posts and says the program has increased sales for his four restaurants. An added benefit, according to Sorge, is the added control over which fans see a particular post.

SocialMediaMags.com co-founder Eric Yaverbaum says Promoted Posts have presented some small businesses with a tough choice.  “They’re going to have to reshape their online sales strategy,” says Yaverbaum, “or bow out if they can’t afford it.”

Reference:

Sarah E. Needleman and Evelyn M. Rusli.  “What’s a Facebook Follower Worth?”  The Wall Street Journal.   10/11/12

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