It is a new age in business, as social media marketing continues to become the driving force in many small enterprises. Facebook Inc (NASDAQ:FB) seemed to solve that quandary, with its massive user base accessible for free, but not any more.
In May, Facebook launched a feature known as promoted posts that requires businesses to pay a certain fee in order for fans to see their posts. The amount you pay determines the number of fans who will be able to see your posts.
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Several small scale merchants joined Facebook Inc (NASDAQ:FB) with a goal of capitalizing on the social network giant’s massive user base. Some are now crying foul following the company’s latest move, as it seeks to restore some value in its sagging stock price. Facebook receives an average of $5.36 in revenue per user and is looking to boost this figure with its new set of services.
Facebook has recently introduced a gift service that allows users to send real gifts to their friends and takes a 12% . Furthermore, the social media giant has also started running a pilot project for the promoted posts feature on individual accounts. Users who want to promote a certain campaign, for instance, event announcement, will have to pay $7 for the post to be visible to a larger audience.
On the other hand, Facebook views its promoted posts similar to the manner in which, Google Inc (NASDAQ:GOOG) search operates, where organic search results are free, but companies pay extra to show up in sponsored search results. However, users are rattled by the fact that even if they pay to promote their posts, Facebook Inc (NASDAQ:FB) holds the key as to who views them.
Facebook Inc (NASDAQ:FB) revealed in a letter that the promoted posts service is gaining traction, although the tech giant did not go into details.
Small business owners estimate that if they were to pay for the service, then it would results in unmanageable costs rendering them incapable of competing against larger industry players. This is putting a very big question mark on the premium pricing of its promoted posts service. Additionally, merchants are forced to incur additional costs related to staff, if they seek to have someone assigned to manage their social media marketing platforms.
The costs are indeed rising, and it remains to be seen how much return promoted posts can add to a business, as compared to the cost of running the service.