The Facebook economy: ‘SMBs will create a Facebook page before they’ll build a website’

13 Dec 2012

Facebook is ramping up its focus on small and medium-sized businesses and revealed that more than 300,000 business-owned pages have promoted more than 2.5m posts since June. Facebook’s director of small business Dan Levy also said that into the future more small firms will have a branded Facebook page in advance of building a website.

Ex-PayPal executive Levy was in Dublin yesterday at Facebook’s international headquarters, where the company now employs 450 people. The company said the Facebook economy – the ecosystem of apps, advertising and services – contributed €397.2m to the European economy out of which €165.7m went directly into the Irish economy.

Based in Facebook’s Menlo Park, California, headquarters in Silicon Valley, Levy heads up an area of expanding interest to Facebook – enabling ordinary and small businesses across the world to use the 1bn-strong social network to sell goods and services.

The social network supports 4,500 jobs in Europe, 800 of which are the result of small businesses using Facebook as a platform for growth. In Ireland, Facebook supports 2,200 jobs, out of which 450 people are employed directly by the company.

40pc increase in active local business pages in 2012

Levy explained that the number of local business pages advertising on Facebook has nearly doubled since January and that active local pages have increased 40pc since January. More than a quarter of the businesses are new advertisers on the social network.

According to Levy, some 150m people visit Facebook business-owned pages every day and highlighted that the news feed isn’t the only way they’re visiting the pages.

Levy said that since Facebook launched the pages manager app for mobile devices six months ago, some 3m page owners are using the mobile admin app to advertise on the go.

Felicity McCarthy, who runs Facebook’s SMB business group at its international HQ in Dublin, said the operation in Ireland’s capital city is the largest Facebook office in the world outside California. “We are now at 450 people supporting 20 languages and excess of that in terms of countries. The SMB team support small businesses across EMEA.”

She added there are more than 2m Irish people using Facebook and of these 1.5m return to the social network every day.

“In that context the opportunities for small businesses are immense and we’re keen to work with them to make sure that they are enabled to use the platform well,” she said, comparing the 1.5m daily Irish people who visit Facebook with the 1.5m people who watched The Late Late Toy Show last week, the most-watched TV programme on the island.

“The world is depending on SMBs to lead growth in the economy and we think Facebook has a role to play to unlock that potential.”

McCarthy added that Facebook has joined forces with the various business chambers in Ireland and the UK to drive adoption.

Levy said that 14pc of advertising in the third quarter on Facebook of this year was from mobile.

“We have 600m Facebook users on mobile devices. We have moved from having no mobile revenues six months ago to 14pc today,” he said.

Best practices

Levy said the social network is constantly learning how to ensure best practices and share that knowledge back into the community of businesses that are using the network to promote their business.

“Thirteen million local businesses have started already. We are excited by the opportunities, but this will only come about if we make small businesses and the broader economy more successful.”

Levy introduced a couple of local businesses in Ireland that are already using the social network as a platform to promote their business and build a community of customers.

The first business we saw was Voltaire Diamonds, run by Seamus Fahy, a specialist jeweller. “Because we don’t have a shopfront, our prices are 30pc more competitive. We need a strong online presence and make strong use of SEO (search engine optimisation) and social media. Facebook would be one of the more successful platforms for us and we generate 25pc of online sales from Facebook.

“The key is to publish engaging content and getting our fanbase to interact with us. For example, we initiated a collaboration with the milliner Philip Treacy that involved putting a video on YouTube and we promoted it on Facebook. We hit a large target market of 160,000 people in Ireland and the UK and that was for an investment of just €300,” Fahy said.

Voltaire Diamonds has since opened a London office and is using Facebook to target the Irish population in London. “Many of them may have emigrated but they are also at the engagement ring stage of their lives,” Fahy pointed out.

The next business we saw was Spring Wools, a family business that Zita Spring’s parents have been running for 30 years. “Without being online I’m not sure people would know we exist. Facebook allows us to reach out to people who like to knit and who have arts and crafts hobbies.

“A key strategy would be to appear in the news feeds of people who enjoy these activities and by using mainly photography we get a huge amount of shares and likes. If we promote a specific Irish product we see a huge difference in online sales from the US.”

The New [Facebook] Economy

Levy said the key advantage that Facebook is impressing on small firms is that they can use the social network to reach a large target audience without having to invest in expensive web design, SEO or e-commerce.

“Most businesses start off on Facebook as users – that’s why they’re pages look a lot like the traditional user experiences. They use promoted posts as a simple way to get started and then they take off.”

I asked him if Facebook is plotting to expand into the display advertising business. “It’s hard to speculate on the future, but we provide a medium that allows for a lot of creativity by the business. First off, it allows you to be your authentic self because the business can express itself and fans can express themselves by writing on their wall.”

McCarthy pointed out that firms are growing organically on Facebook, such as the Cupcake Bakery in Galway, which began as a market stall in Galway City.

Levy said Facebook is being embraced by businesses of varying degrees of sophistication, from small two-person operations to firms providing third-party services. “It’s mostly down to the nature of content. Guys who sell drumkits can talk fluently with drumming enthusiasts. It’s about building communities of enthusiasts.”

He pointed out the example of Brandi Temple from North Carolina, who started a kids clothing business called Lolly Wolly Doodle’s on Facebook two years ago when her husband lost his job. She used the social network as the platform for managing her business and taking orders without having to invest in a complicated invoice system or website. Temple’s company now employs 90 people.

“We think there could be thousands of others businesses on Facebook that may already be as successful as Lolly Wolly Doodle’s,” Levy explained. “We are still learning and understanding and there’s currently only 100 of us on a team that works with small businesses across 13m pages.”

Echoing the advice from Fahy and Spring to small businesses to keep their pages simple and low-tech, Levy said: “The simpler we can keep it for small businesses the better, while still giving them the power to do whatever they want to do.”

Social business image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years