Facebook to offer free ads to small businesses, report says

The world's largest social network will offer up $10 million in advertising credits to get small businesses to promote their brands on the site.

Advertising has long been the lifeblood of Facebook, and now, the company is hoping small businesses will also find use for its ad platform, a new report claims.

Facebook is looking to partner with the U.S. Chamber of Commerce and the National Federation of Independent Business (NFIB) to inform small businesses on the value of Facebook advertising, and educate them on why they should buy spots on the site, the Wall Street Journal is reporting. According to the Journal, Facebook plans to announce the agreement today.

When the program starts in October, the Journal says, Facebook and folks from the U.S. Chamber and the NFIB will head to local chambers of commerce around the country to teach small businesses the most effective ways to advertise on the service. And to help coax those firms into trying out some of the techniques they've learned, Facebook plans in January to give away $50 in advertising rebates to 200,000 small businesses, the Journal says.

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Advertising is extremely important for Facebook. Earlier this month, research firm eMarketer revealed that the social network will generate $4.27 billion this year , including $3.8 billion in advertising worldwide. That figure is up a whopping 104 percent compared to its 2010 ad revenue of $1.86 billion.

But even though more companies are putting ads on Facebook, eMarketer says that the world's largest social network has hit a point where it needs to show value in its service. Debra Aho Williamson, a principal analyst at eMarketer, said that Facebook needs to "show advertisers that advertising on the site is effective even without a click or other action." The issue, Williamson says, is that many companies that have "amassed a large of quantity of 'likes,'" feel that they can simply market to customers through their own Pages, rather than through ads.

That might be a problem for Facebook's push to small businesses, as well. According to the Journal, small businesses have 9.2 million Pages on the site.

But it's the ad sales pitch Facebook wants to make clear. Speaking to the Journal in an interview published today, Facebook vice president of advertising and global operations, David Fischer, said that the social network can see a way "to give small businesses a boost" with its ads.

Facebook did not immediately respond to CNET's request for comment.

 

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