Facebook has been the target of widespread criticism for some time now. With face-to-face interaction restricted, however, social media platforms like Facebook are key for companies—small businesses in particular—to reach their customers.
In the second quarter of 2020, for example, Facebook exceeded analysts’ expectations with revenue of nearly $19 billion, while profits were over $5 billion, almost double its profits in the second quarter of 2019.
Facebook has also been an investor favorite. Its market value is around $830 billion with shares that soared more than 200% in the last 5 years. Anyone who invested $1,000 on Facebook in December 2015 now has $3,100.
What makes Facebook so successful?
“Facebook remains a really powerful marketing channel for small businesses,” says Dan Grech, founder of BizHack Academy, a Miami company that has trained more than 10,000 small businesses in generating sales through digital marketing. “This is especially true with Covid: there aren’t that many ways to reach new customers, and Facebook Advertising is one of the most powerful.”
Critics have accused Facebook of allowing the manipulation of the personal information of its millions of users for political purposes. They have also questioned its dominance over the social media business, as it also controls the Instagram photo and video network as well the WhatsApp instant messaging app, three of the most widely used platforms in the digital world.
It has even recently faced the boycott of some advertisers, who accuse the company founded by Mark Zuckerberg of not doing enough to combat false information and hate messages spread across its networks. Zuckerberg testified in Congress along with executives of other big tech companies about alleged business practices that violate antitrust laws.
Criticism, however, does not hide an inescapable reality: Facebook has become a powerful tool for doing business for all kinds of companies and professionals, helping to explain its rise.
“A lot of big brands have joined a boycott because of Facebook’s bad practices around false and misleading information as well as bad privacy practices, but for a small business with very limited options, and a limited budget to reach new customers, we don’t recommend they participate in the boycott,” Grech says. “In the end, the boycott helps lower advertising costs for small businesses, because a lot of larger brands are pulling their advertising dollars out of the platform.”
How to reach new customers on Facebook
Around 1.6 billion people worldwide are connected to small businesses via Facebook, according to data from the social network itself. For a small business that knows what its target market is, Facebook offers good value for money, Grech says.
“Small businesses have a limited number of ways to reach strangers who are outside their immediate network,” he says. “And Facebook is one of the most cost-effective and easy to use tools to do that: it tends to be less expensive than LinkedIn, Twitter or Google, but nearly 8 in 10 online Americans use it.”
“So, no matter what business you are in, your ideal customer can be found on Facebook if you know how to target them properly,” Grech adds.
“No matter what business you are in, your ideal customer can be found on Facebook if you know how to target them properly.”-Dan Grech of BizHack Academy
Before you run a business ad on the site, Facebook recommends that you set a plan according to the expected result of your ad, choose the ideal audience you’re targeting based on factors such as age and place of residence, select the right platform (Facebook, Instagram, Messenger, or all of them), and finally determine your budget and ad format, such as a video or an image.
After that, Facebook suggests following the statistics for each campaign in Ads Manager, to find out who is watching the campaign, where, and find out what actions generate the best results.
The high returns are key to understanding Facebook’s appeal, which can be as high as almost thirty to one.
Know the lesser-known side of Facebook
“BizHack specializes in working with marketing and communications agencies, mastering Facebook advertising, aiding those agencies to make more money: number one, they can attract new clients to their agency; and number 2, they can upsell their existing clients with social media advertising services,” Grech says, describing the services his company offers. “The average agency that goes through our 5-week program in social media advertising has a 29 to 1 return on ad spend: in other words, they make $29 in additional revenue for every $1 they spend in ads on Facebook.”
Within just a few hours, “BizHack can teach a small business owner that has never advertised online before how to launch a successful Facebook advertising campaign on a budget of less than $100,” he says. “The main thing that is holding back small business owners from using Facebook Advertising to generate leads for their business is a lack of knowledge: at BizHack we solve that by giving business owner a simple, step-by-step methodology to launch profitable ads within hours.”
“The main thing that is holding back small business owners from using Facebook Advertising to generate leads for their business is a lack of knowledge.”Dan Grech of Bizhack Academy
Most businesses that generate leads through Facebook close the deals through phone or email, Grech says.
Social networks like Facebook have become even more relevant at a time when the Covid-19 pandemic has limited or almost eliminated the possibilities of social interaction.
“Most small businesses rely on in-person events, trade shows, conferences, and one-on-one meetings for their marketing, and all of those avenues are no longer available: this is just particularly true of B2B businesses,” Grech says. “So, if you can’t use an in-person sales process, you are forced to go online to find new customers.”