Facebook now has about 3 million advertisers on its platform, the majority of which are small businesses. Sheryl Sandberg, Facebook’s COO, told USA Today that Facebook’s main mission is to connect the world and tht connecting people to small businesses is an important part of that.
Small businesses making big contributions to Facebook
Facebook knows that small businesses are one of its biggest opportunities as they do not have enough money to advertise on bigger media. Dan Levy, Facebook’s vice president of small business, notes that mobile has accelerated adoption among small businesses, especially overseas. More than 1 million advertisers made an advertisement directly from their mobile device, and more than 70% of the advertisers on the social networking site are outside of the U.S., Levy said.
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“Mobile has really enabled so much of this growth, especially outside of the United States, where so many people just start on a mobile device,” Levy said.
Facebook’s fourth quarter sales rose 52% to $5.84 billion, supported by its growing success in selling advertising on mobile devices. To get more revenues from the segment, Facebook is working hard to make itself more useful to small businesses by providing them free pages on its site and other services to manage their digital presence, like promotions at low cost, proper charts to check the growth of their page, etc. More than 50 million small businesses use Facebook’s free Pages product currently, and more than 20 million use its Pages Manager App.
A potential threat to Google
Analysts see this 50% increase in advertisers in one year as impressive, and at the same time, as increased competition for Google.
“Three million active advertisers is pretty huge,” said Debra Aho Williamson, an eMarketer analyst.
Even rival Twitter with only 130,000 advertisers is not in the scene, whereas Instagram, the photo-sharing service owned by Facebook, has only recently begun building its advertising business and has 200,000 advertisers. According to Williamson, advertisers view Facebook as an important part of their “advertising arsenal.” “That is supported by the fact that the number of advertisers on Facebook is increasingly rapidly.”
The advertisers on the social networking site range from major brands such as L’Occitane and the Golden State Warriors to small operations such as catering companies or clothing boutiques. The social media giant is working hard to increase the number of paid advertisers around the world. About 2.5 million businesses were actively advertising on the platform in the fourth quarter.