Small businesses the future of Facebook

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Facebook has one million advertisers onboard, which is twice the number of advertisers on its platform from the previous year, revealed Dan Levy, Director of Small Businesses at Facebook.

Moreover, the social network also has 25 million small businesses with active pages. This translates to a lot of advertising revenue potential sitting close at hand.

“I think that there is a goldmine waiting to be exhausted,” said Michael Pachter, analyst at Wedbush Securities, in an email to Mashable.

“The 25 million businesses with active pages clearly understand that having a presence on Facebook has value to them, and it is only a matter of time before a large number of them experiment with advertising on Facebook.”

Pachter believes that as much as 50 per cent of the small businesses on the social network will eventually advertise, which could lead to over $1.25 billion in ad revenue.

Facebook has been preparing itself for the time when these businesses finally advertise. For SMEs, this implies a simpler advertising interface that significantly reduces the work needed to set up an ad campaign on Facebook. Instead of specifying age groups, education experience or interest for its target audience, firms can now simply write their post with a budget attached to it.

Facebook then takes care of delivering the ad to the right users, said Levy, who noted that 62 per cent of Facebook’s new advertisers joined the platform via these simpler interfaces.

Facebook might need to experiment with other forms of ads, such as location-based advertisements and coupons. A success-based advertising model, wherein businesses are charged only if the ad brings in sales or customers, could encourage small businesses to join Facebook, said Pachter.

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