Mobile Commerce

Facebook Throws Weight Behind Mobile SMBs

Facebook has found a business proposition that SMBs can buy into: free, local business pages that promote their businesses to a growing, global social network.

But don’t think the crew over at Facebook hasn’t thought about the monetization opportunity associated with opening up those “free” pages. Of course, the businesses get free publicity if marketed correctly, and consumers get connected to businesses they might not have discovered before. After all, connecting people to people, people to causes and people to businesses — and vice versa — is Facebook’s main business.

But perhaps Facebook’s most recent foray into local business (Pages) has created a new realm of commerce opportunities for the social networking giant. Still, it can be a win-win proposal, possibly — especially on the mobile side.

During Facebook’s earnings call yesterday (Nov. 4), Facebook COO Sheryl Sandberg gave some perspective on just how Facebook’s business pages have taken off. In fact, she announced that Facebook now has more than 45 million SMBs using Pages.

“On SMBs, I think it’s one of the most compelling opportunities we have for Facebook. And that’s because I think we solve a really big problem for SMBs, which is how are they going to reach customers. In the United States, which is usually the most advanced market, 35 percent of small businesses have no Web presence at all,” Sandberg said, pointing toward the mobile impact for SMBs.

“Building a mobile presence is even harder than a Web presence because most people don’t use the mobile Web, and mobile apps are expensive to build and hard to get people to use, especially if you’re a small business. That’s why there are 45 million SMB pages on Facebook. These are people who are using Facebook and this free product to create an online and increasingly a mobile presence.”

But that mobile presence is where Facebook gets a hefty chunk of revenue from via mobile ads. Mobile advertising revenue represented approximately 78 percent of Facebook’s Q3 advertising revenue ($3.4 billion), which was a 66 percent increase from the year prior. Advertising revenue, overall, was $4.3 billion, a 45 percent YOY increase.

Here’s where SMBs make that relevant.

“Our job is to make sure that free product works for them and then, over time, bring them into our paid products,” Sandberg said. “We have 2.5 million advertisers and over 80 percent of them started on Pages and then started with simplified ad products. And that’s what we’ve done over time, and we’ll continue to do that. What you see is that it’s as easy for them to use it as profile, and we can give them opportunities to do things that they otherwise couldn’t do.”

SMBs are also being drawn to other features Facebook offers, such as videos that are cheap to make and easy to use, Sandberg said. In one month alone, 1.5 million SMB videos were posted. 

“That gives us a way to continue to work with SMBs and increasingly grow our business with them,” she added.

And that’s how it’s set the bait and hook to monetize Pages. It won’t get every small business, of course, and some will only use the free service. But it’s got the plans in motion to get more businesses on its video front, which leads toward the advertising model. 

And on its mobile side, the results for daily active users (DAU) are growing strong. Mobile DAUs hit 894 million, on average, in Sept. 2015, which was a 27 percent YOY increase. Daily active users hit 1.01 billion during that same time period, which is a 17 percent YOY increase.

Recently, Facebook announced an array of news hinting toward an eCommerce push that will help businesses capitalize on the reach of its platform. It is currently testing new ad experiences aimed to promote seamless shopping and a Shop section on Pages. According to Facebook, the goal of building these new native experiences is to enhance the ability to discover new products on mobile while also helping businesses to drive more sales.

One of the latest mobile features it is currently testing is a new ad experience called Canvas, which offers mobile users access to a fast-loading and fully optimized screen after clicking on an ad. Canvas is designed to encourage product browsing before the customer goes to the retailer’s website to make a purchase, allowing a business to drive any number of advertising objectives, such as brand building or simply increasing sales.

Facebook also announced plans to begin testing its Shop section for a small group of U.S. businesses, providing a single place where users can discover and buy new products. Facebook said businesses will have the ability to link to their own retail websites through the Shop section or simply encourage customers to purchase products directly on their Page.

Facebook is also developing a Craigslist equivalent feature for its Messenger app that would enable users to buy and sell products in a well-structured marketplace.

The feature called “Local Market” was first reported by many users from Australia and New Zealand who saw it in their mobile app. The feature encompasses a well-defined marketplace that categorizes products into various sections like appliances, furniture, autos, clothing, books, etc. Much like Craigslist, the feature allows users to upload pictures and descriptions. It also includes a buy and sell interface that has search capabilities.

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