How Facebook Keeps Both Big and Small Businesses Happy

As Facebook positions itself for a forthcoming IPO after swallowing a $450 million investment from Goldman Sachs, it continues to reinvent itself as a friend to businesses big and small.

While I’ve questioned the impact that commercializing Facebook may have on its consumer-oriented character, I can’t help but admire the attention the social network pays to its business advertisers and partners.

Two recent articles in Advertising Age prove the point. Jack Neff reports that Facebook has quietly cleaned up its site so that when users search for the brand pages of big promotional investors like Procter & Gamble, they find company-sponsored pages first. In the past, it was just as easy to land on a “renegade fan page with some unusual and decidedly off-message content.”

In what is known as “rollups,” writes Neff, the number of pages for well-known brands has actually declined because Facebook is assisting businesses like P&G and Apple with consolidation, at no cost to the advertiser – a wise business strategy that keeps the big guys happy. Neff quoted an anonymous source who said that Facebook “rarely will do a rollup until they know there’s a [media] buy associated with it.” Neff indicated that a Facebook representative confirmed it does rollups for advertisers, but “It needs to be clear that the pages’ intent was to connect people to the brand/company.”

The underlying reason for the practice, of course, is to maintain brand integrity by keeping unofficial pages to a minimum. The practice, writes Neff, seems to be limited to “pages started by true fans, or at least neutral parties. No one working on such consolidations knows of any marketers willing to fan flames of social-media discontent by going after pages started by critics.”

On the other side of the spectrum, Facebook is managing to keep the small guys happy too. Edmund Lee reports that 60 percent of Facebook’s $1.86 billion in worldwide ad revenue “was earned from smaller companies in 2010, those more likely to be using self-serve tools rather than work through a media agency. That’s greater than the $740 million coming from major marketers like Coke, P&G or Match.com.”

Debra Williamson, Principal Analyst of Social Media at eMarketer, the research firm that analyzed Facebook’s advertising revenue, told Advertising Age that it is the small business advertisers that “are really juicing Facebook’s growth. They buy advertising in bulk. They’ve done it for years on Google, and now they’re taking that expertise to Facebook.” Williamson says Facebook’s self-service business was about 50 percent last year, but it has now grown to about three-fifths of Facebook’s ad revenues.

Clearly, Facebook has people who know how to run a business – and how to accommodate the needs of business marketers. It demonstrates that Facebook knows the value of being a friend to business, because ultimately, business is where Facebook’s revenues will come from.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

Comments are closed.