Here’s Why Facebook Will Be Successful With Small Businesses

Facebook announced the Fit campaign to make SMBs upgrade to ad solutions. Will Google and Twitter allow the initiative to be successful?

Jun 18, 2014 at 12:00PM

Small and medium-sized businesses, or SMBs, have long used Facebook  (NASDAQ:FB) as what amounts to a free website platform. SMBs have also been quick to embrace free postings on Google (NASDAQ:GOOG) and Twitter (NYSE:TWTR). But many of them are reluctant to advertise, limiting the revenue the social media companies can make. Facebook has tweaked its algorithms and announced the Fit campaign to make SMBs upgrade to ad solutions. The advertising trend of small businesses, along with Facebook's monetizing initiatives, will make the company successful at selling advertising.

The Facebook Fit launch
Facebook's Fit campaign is an initiative to jump-start Facebook's efforts to capture more of the lucrative SMB advertising market. The campaign includes business owner's "boot camps" in five U.S. cities in the coming months. The initiative provides tips for maximizing Facebook's value as a marketing tool. The "boot camps" will teach SMB owners how to better use the service and reach their customers.

Why SMBs?
Ad-ology Research found nearly 80% of socially active small businesses plan to advertise more on social media networks. While nearly 41% do not currently use promoted tweets, 13.8% of small business owners plan to spend more on them this year. Nearly 40% of SMB owners who spend at least $1,000 per year on advertising indicate they will invest more in 2014, said the research firm.

Facebook's gain
There is a reason why Facebook generates a fortune from its ads. The company always wants to increase its advertising revenue and get more clicks on all kinds of ads. Facebook Fit is to get small business owners into the fold for an upgrade to ad solutions. Facebook is in a good position to get more revenue this way because so many small businesses use it. Companies will be made to pay $10 to promote a post in other Facebook pages. With the development, Facebook's ad business will continue to show improvements. The company could get more small business advertising to stay competitive with Google.

Another reason for Facebook Fit
Facebook captures, analyzes, and utilizes data. So, imagine a greater percentage of SMBs driving their traffic to their Facebook platforms. The increased data creates another potential for Facebook to capture more information about its users. The company could gain more share of the lucrative small business advertising market by leveraging on the information at its disposal.

What is Google's response?
Many small businesses expect to spend money to advertise on Google. The search giant has just announced its "My Business" service. The initiative allows small business owners to connect across multiple channels. Though the service is free, Google will attempt to charge marketers who've started to see some improvement through the venture.

Twitter is not sleeping
Twitter has released a guide for small businesses for getting direct responses from customers on Twitter. The guide is called "Drive Results with Twitter." Companies can create recurring, weekly content that takes the guesswork out of their tweeting. This allows them to organize by the day of the week and then make adjustments as needed. Twitter says it is a pretty good approach to getting out quality content to users and retaining them as followers.

Foolish takeaway
Whether Facebook will crack the SMB market or not remains to be seen. But the company is in a good position to get more revenue from the sector. The advertising trend of small businesses, along with Facebook's monetizing initiatives, will make the company successful at selling its advertising products to small companies.

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Mark Girland has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (C shares), and Twitter. The Motley Fool owns shares of Facebook and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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