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10 ways Facebook is telling businesses to confront changing ad market

Media IndustryBusinessTwitter, Inc.
Soaring usage of Facebook on mobile devices leading to higher advertising rates for businesses
With only about 5% of small businesses buying Facebook ads, Facebook tries to appeal to them

The soaring usage of Facebook on mobile devices has generated an expensive problem for the companies that advertise on the 1.3-billion-user social network.

Facebook shows fewer ads on its mobile properties than on its traditional website, meaning companies are finding themselves placing higher bids to win those few coveted placements.

About 30% of Facebook’s regular users solely visit from smartphones and tablets, up from 19% a year ago. And the gap between heavy users of Facebook in general and heavy users of Facebook mobile has narrowed since last year to 21%, from 33%.

In its earning call last month, Facebook laid out how that’s changed advertising in the past year: 25% fewer ads displayed and a 123% increase in the effective price per ad.

The shift is adding to the frustration for companies that have already had to confront the fact that as Facebook adds users, posts that the companies don't pay to promote are being seen by fewer of their fans.

Facebook officials are touring the country this summer, including Los Angeles on Thursday, to address concerns. They're targeting small businesses because only about 1.5 million of the 30 million of those that have Facebook pages purchase ads.

“What we’re trying to do is give them a way when they’re spending their marketing dollar to be able to reach their exact, targeted audience so they’re spending most effectively,” Facebook’s Bess Yount said in an interview. “Once people get that concept, normally we see their success skyrocket.”

Facebook touts its importance by saying that 38% of respondents in a Vision Critical survey said they made a purchase after engaging with it on Facebook, compared to 29% on Pinterest and 22% on Twitter. There’s also a validation factor, according to entrepreneurs. Businesses that have a large amount of followers on social media are taken more seriously.

Here’s a quick look at some of the tips that Yount offered to business owners:

  • Choose a colorful, action-packed cover photo that lures in viewers.
  • Try the Pages Manager app to control a Facebook page from a mobile device. Recognizing that business owners are shifting to mobile just as much as anyone, Facebook has been pushing to improve the app, Yount said.
  • Take note of the Facebook posts in your own newsfeed that you find most interesting. “That’s your competitive landscape,” Yount said, suggesting that business owners try to replicate things that they like in their own feeds. “You have to compete with whatever your friends and family are posting, including wedding photos, baby photos [because your fans are probably seeing similar posts],” she said.
  • Ask customers for photos they’ve taken with your product and reward them for their submissions with discounts. In other words, use customers as your creative department.
  • When a post appears to be doing well, pay to “boost” it. Don’t boost something that’s not doing well because initial viewers probably didn’t “like” it for a reason.
  • Upload mailing lists to Facebook and choose segments of customers from there that you may want to reach, such as the most loyal ones. Then, use Facebook’s “lookalike” program to advertise to people similar to the segment of customers you already have.
  • Don’t show a general ad to a specific audience. “Break those out and create focused ad campaigns,” Yount said.
  • Schedule posts so they publish right before or during the period that Facebook’s page insights tool show that your fans are most active.
  • For businesses where Web sales are crucial, activating re-targeting means Facebook users would see an ad for your business soon after visiting a specific spot on your website. It’s a good way to remind them to come back, Yount said.
  • As Southern California examples of businesses doing well on Facebook, the company offered: Loot CrateHamboards, Remo the Realtor and School on Wheels. One of the best tips they offered: Once you build a community, don’t spend all day responding to negative posts. Your avid fans should take care of that for you.

Chat with me on Twitter @peard33

Copyright © 2014, Los Angeles Times
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