Facebook's newest attempt to cozy up to small businesses
The world's largest social network has been hosting events throughout the summer to teach small businesses how to get more customers to like them.
MENLO PARK, Calif. -- For Andrew Chau, it's all about food porn.
Talking to a crowd of 350 attendees in the courtyard of Facebook's headquarters here, Chau, co-founder of milk tea maker Boba Guys, described how everything from the photos his company posts on its Facebook and Instagram accounts to the layout of the store are designed to go viral.
The photos are taken by Bin Chen, his cofounder who, like him, grew up on the Internet. "It's natural for us to share on social media," Chau said. "Facebook came out when we were in college."
Chen and Chau are exactly the type of small businesses Facebook wants talking up its social network. They're young, hip and use social media as a crucial part of their marketing. When Boba Guys was preparing to launch a Kickstarter crowdfunding campaign to help pay for a new storefront, the company purchased its first ads on Facebook after using the service for years as a free marketing tool.
"We weren't even sure if we should advertise," said Chau. "We were proud of the fact we didn't advertise." Boba Guys started with a marketing budget of $20 in February. So far, it's spent about $1,000.
Facebook, which makes almost all of its money from advertising, wants to change the way small businesses see its service. Dan Levy, head of Facebook's small business efforts, said the Boba Guys experience is the type his team is trying to replicate with other businesses.The company has often struggled against concerns that customers don't respond to or care about local business's pages on the site. Others have complained that their posts aren't seen by all customers. "If people can see a little bit of value, we can show them more," Levy said.
The only way a business can even tell today whether spending works is if it asks customers directly, or offers a special promotion if customers mention they saw it on social media. Some, like Chau, said they've seen a direct correlation between advertising a new product on social media and an immediate uptick in sales.
Facebook declined to say what percentage of overall revenue small businesses represent, but it says 1.5 million small businesses advertise on its site, mostly through traditional image advertisements and promoting posts on their pages. That's out of more than 30 million small businesses that use Facebook at least once a month.
Many factors separate a small business that pays for ads from one that doesn't. One reason is that it's hard to figure out what value advertising on Facebook's site even has, especially to small businesses with little ad or marketing budgets.
But, Levy said, it's not always clear. "We want to get better."
So Facebook hit the road, visiting cities like New York and Chicago to promote itself as a marketing tool to the 4,000 businesses that attended its events. The message is that the right posts, mixed with the right advertising efforts, can work.
"Our goal is really simple: our business grows by growing your business," said Sheryl Sandberg, Facebook's chief operating officer. Sandberg regaled the crowd at Facebook headquarters with stories about her great grandfather's paint store, and how former Facebook employees have opened their own businesses as well.
Flanked by Congresswoman Anna Eshoo and small business owners from around the Bay Area, Sandberg and her team held panels to convince small business owners to increase their Facebook usage. Facebook also gave them $50 in Facebook advertising credit so they could test out the service.
Julie Shenkman, co-owner of local seafood shop Sam's Chowder House, described how her company posts pictures of food and alerts fans of where her company's food truck will be traveling. The company also pays Facebook to increase the number of people who see some of its posts. One example she called "Oyster popups," during which her team posts a notice for $1 oyster events only to Facebook. Last week, she said her team spent $20 on targeted ads that reached at least 5,000 nearby users who told Facebook they liked oysters; 25 shared the ad with friends, and the restaurant was packed. "We use targeting as our number one strategy," she said.
Still, Facebook realizes it still has some convincing to do. One thing that may help is mobile devices, Levy said. His team is currently focused on making mobile ads better because some businesses in other countries won't even have been built using a standard computer, he said. Currently, 19 million pages are managed on mobile devices, and a vast majority are small businesses.
"That number will grow," Levy said.