ANALYSIS / OPINION:
I don’t work for Facebook. I don’t get paid to write on Facebook. I have no relationship with Facebook. And I’m not going to find excuses for the actions of Facebook’s senior management. I see.
According to a whistleblower’s testimony last week in Congress, society has done things that they know can harm members of their audience, especially younger members. They mishandled the data. They violated people’s privacy. They manipulated the news. They treat some people, especially celebrities, better than others. Their senior management is arrogant, out of this world and selfish.
This is all bad. But is Facebook a bad company? Not when it comes to small businesses like mine. For us Facebook has been very, very good. Let me explain why.
For starters, Facebook is very popular with small businesses. I am not happy that the company excludes some activities that they arbitrarily consider “negative” or “controversial”. But aside from these companies, more than 200 million of us around the world use the tools of the social media giant. We rely on the platform to sell our products, communicate with our customers, market our communities, research our industries and connect with potential prospects. The company provides livelihoods to millions of software developers, real estate agents, online education companies, content providers and small businesses in the travel, automotive, financial services and gaming industries.
This is because the Facebook community offers a huge opportunity for small business owners like me who want to sell our products or make our content available to new potential customers. There are nearly three billion monthly active users on Facebook. Three billion! Sixty-nine percent of Americans use the platform. 73% of its active users visit Facebook every day. And it’s not older people either. According to a research firm, 30% of active Facebook users are under the age of 25 and only 5% are over 65. For many small businesses, Facebook’s marketplace is critical to their livelihoods.
Because their audience is so large, Facebook’s advertising opportunities are huge and relatively inexpensive. That’s why the company reports that more than 10 million companies advertise on its platform. Does this make sense. The average Facebook user, according to research, clicks 12 ads every month. Facebook Ads for its two billion member community have one of the lowest cost-per-click in the industry and provide the highest return on investment of all paid advertising channels.
Again, I don’t work for Facebook. Facebook doesn’t pay me. I have no relationship with Facebook. I am just a small business owner. And these are just the facts.
For small businesses looking to sell their products, Facebook offers an extremely active platform. Its Marketplace, where individuals and companies offer their products, has over one billion active participants. In 2019, 15% of its users used the social platform to search and purchase products. This has led to over 18% of all US adults making purchases on their Marketplace or via Facebook in the past year. Two-thirds of Facebook users visit a local business page at least once a week. Imagine where these companies would be without this source of customers? You don’t have to imagine. When Facebook went down this week for a few hours, countless small business owners suffered.
Finally, millions of small businesses rely on Facebook for critical information and to stay connected with their communities. 48.5% of B2B decision makers use Facebook for research. There are 40 million monthly active businesses using Facebook Messenger. Social media communication service has 10-80x better engagement than email, and Messenger Ads can reduce cost per lead by 30 to 50x.
Unfortunately, and as I briefly mentioned above, some small businesses cannot take advantage of Facebook. The company bans companies that sell guns, tobacco, adult products or services, surveillance equipment, or companies that offer same-day loans. Companies can be banned from Facebook if company reviewers deem their behavior “inappropriate” or if they use graphics that are deemed offensive or even if they do not respond to customer complaints. Unfortunately, these rules are applied inconsistently. As a small business owner, I will never understand why many legitimate companies, which conduct their business entirely in compliance with the law, are not allowed to conduct their business on Facebook. I mean, who judges who here?
But I’m digressing anyway. And I hope these rules change someday. I hope a lot of things about Facebook changes. But I also hope that many things on the social media platform remain the same. Facebook has many enemies, but I’m not one of them. I appreciate all the other opportunities that your service offers to small businesses in this country. Yes, Facebook is far from perfect. But it is a platform that has improved the lives of many American entrepreneurs.
• Gene Marks is a CPA and owner of The Marks Group, a technology consulting and financial management firm specializing in small and medium-sized businesses.