Nov 10, 2017
Facebook unveils 30-city program to boost small business' digital skills
Mark Zuckerberg says Facebook will parachute into 30 cities across the country, from Houston to Des Moines, to help small businesses, nonprofits, aspiring entrepreneurs and job seekers beef up their digital and social media skills in the face of sweeping changes to the nation's economy.
Zuckerberg planned to make announcement while in St. Louis, where he took part in a roundtable discussion with small business owners, during his final swing through the U.S. on his year-long tour of every state he had not yet visited.
Facebook will spend tens of millions on the new program called Facebook Community Boost. It's a significant expansion of a smaller program that has taught some 60,000 small businesses how to use Facebook, Zuckerberg told USA TODAY.
The new program, launching next year, marks a significant investment in Facebook's marketing campaign to small businesses. Facebook aggressively promotes itself to small businesses, providing them with free pages and services to manage their digital presence in hopes of turning them into paid advertisers.
The focus on small businesses furthers Facebook's goal of bringing communities together while boosting the company's advertising business, Zuckerberg said in an interview.
"It's important for (Facebook's) business. A lot of those folks end up advertising and being a part of the business. But it's also really important for the community, both on Facebook and off," he said. "Small businesses are really a critical part of strong local communities."
They are also a large and growing chunk of the social media giant's advertising business. Of the six million advertisers on Facebook, the majority are small and mid-sized businesses.
Zuckerberg declined to say how much advertising revenue those businesses generate for Facebook. Pivotal Research analyst Brian Wieser estimates they bring in about about one-quarter of the company's total advertising revenue.
In the third quarter, Facebook revenue topped $10 billion for the first time, in part propelled by those ad sales. Facebook's chief operating officer Sheryl Sandberg, who regularly hopscotches the globe touting the benefits of Facebook ads to boost small businesses, said one of the strongest drivers of revenue growth in the quarter came from small and mid-sized businesses in Europe. That's an indication of just how large an opportunity these businesses represent for Facebook.
There are some 30 million small businesses in the U.S. and nearly 500 million around the world. Many of them don't have much or any digital presence or digital marketing strategy. But 70 million of them have pages on Facebook. Facebook is trying to convince more of them to set up shop and then spend money there.
With the announcement, Facebook's also looking to change the national conversation after a bruising year in which it has been buffeted by sharp criticism, from revelations that Russian agents used Facebook to spread inflammatory messages to meddle with the U.S. election to the wave of misinformation and hoaxes that for months flowed unchecked on Facebook.
There have been blunders on the business front, too. On several occasions, Facebook admitted it understated or overstated the metrics it provides to marketers to guide their decisions in buying advertising.
Most palpable is the growing unease with the massive power of the nation's top technology companies as they grow wealthy off rapid advances that are radically reshaping industries and eliminating jobs. Google said last month that it would invest $1 billion over the next five years in nonprofit organizations, in part to help people adjust to the changing nature of work.
Among the nation's five largest tech companies, Facebook had the lowest percentage of people who liked its products and services in a survey conducted in October by technology news outlet The Verge.
During his listening tour which ends this week in Kansas, Zuckerberg says he's met with a broad cross-section of the more than 200 million Americans on Facebook. In June, recognizing that more people were feeling left behind by globalization as well as technological changes, Zuckerberg changed Facebook's mission to focus on building community after a decade of promoting Facebook as a service that connects small groups of friends and family.
"There is no question that people have concerns about the direction some things are going in and we feel a very deep responsibility to contribute positively and to help build community," Zuckerberg said. "That's why we shifted the mission toward this. That's why we are building a lot of products that help people build community. This announcement fits into that as well."
Zuckerberg says the training sessions in cities across the country build on his desire for Facebook to be a force that binds people together online and off. Facebook Community Boost will be aimed at small business owners looking to land new customers, nonprofits looking to develop their social media chops, entrepreneurs looking to use technology to get their idea off the ground, job seekers looking for digital skills to qualify for openings and community members looking to use Facebook tools to connect people. Facebook has already selected a handful of the 30 cities: St. Louis, Houston, Des Moines, Albuquerque and Greenville, South Carolina.
"The important part of this is that this is not just about Facebook. We train entrepreneurs and these local businesses to use a lot of the best tools online. Some of those are ours. Some of them other people's," Zuckerberg said.
Facebook isn't the only company angling for the attention and advertising dollars of small businesses. Its chief competition is Google. While neither has a lock on the small and mid-sized business market, "together with Google, the two of them dominate paid media spending from small and mid-sized businesses just as they do large advertisers," Wieser says.
Reaching small businesses and then giving them the training and support they need without making costly investments such as hiring armies of salespeople and support staff has been a significant challenge for both companies, says small business digital marketing expert Greg Sterling, vice president of strategy for the Local Search Association.
He predicts Facebook's new training program will be popular with small business owners eager to learn the ins and outs of targeting ads to such a large pool of prospective customers.
Small business owners on Facebook are increasingly finding they have to pay for advertising if they want to reach users. Facebook has repeatedly changed its algorithms in recent years to decrease the free exposure businesses were able at one time to get on the social network.
So they need help navigating Facebook's self-service advertising system to design campaigns, measure their reach and make changes to improve the effectiveness of the campaigns. They are often trying to juggle this on small marketing budgets and with limited resources and time. And small businesses increasingly are competing for limited ad space and they're paying more for ads. In the third quarter, Facebook's average price per ad rose 35%.
"There is a lot of demand to figure out how to do this," Sterling says.