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Despite Challenges, Facebook Remains Top Ally for Small Business Advertising

Despite Challenges, Facebook Remains Top Ally for Small Business Advertising

We all know that Facebook is a dominant force in the digital advertising landscape. And it seems that no matter the controversy or challenge the social media giant faces, advertisers remain bullish in using the platform. 

How is Facebook responding to current ad tech and policy challenges, while defending the role of targeted advertising, especially for small businesses?

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Privacy, Journalism, and Targeted Advertising for Small Businesses

Even though Facebook was initially upset by Apple’s upcoming privacy update, the company has introduced new online shops to make up for the lost advertising revenue. Recently, CEO Mark Zuckerberg said that the changes may even benefit Facebook. 

“It’s possible that we may even be in a stronger position if Apple’s changes encourage more businesses to conduct more commerce on our platforms by making it harder for them to use their data in order to find the customers that would want to use their products outside of our platforms,” explained Zuckerberg in a Clubhouse room.

By introducing Facebook Shops and Instagram Shops in 2020, Facebook created a way to offset the revenue loss from its Audience Network advertising business. 

Another challenge that Facebook faced in Australia, and is now facing in the US, is payment terms for news content in feeds and search. After Facebook blocked news on its platform in Australia, Australia agreed to amend the law that made it pay publishers for news content. 

As the Australian government, digital giants, and publishers negotiate the new law, the world watches. 

“There is no doubt that Australia has been a proxy battle for the world,” said Australian Treasurer Josh Frydenberg. “So many other countries are looking at what is happening here in Australia.”

Legislators (across both parties) in the US are trying to follow Australia’s example. The proposed Journalism Competition and Preservation Act would give news agencies a four year grace period free from antitrust action to allow them to negotiate with the tech giants.

Even though Facebook has battles on every side, it is unequaled at defending itself as a friend to advertisers and consumers. It’s recent ad campaign celebrates the benefits of personalized advertising. 

Narrated by famed artist Grace Jones to a retro beat, the ad claims, “For every big idea that rose to wild acclaim, there are so many more, that never find their fame.”

By referencing several unique small businesses—including a Goat House Farm—the ad gets its point across. Small businesses need to get their message to the right consumers, and consumers benefit when they see the ideas that they love. 

MediaRadar Insights

According to Facebook, there are more than 7 million active advertisers on the platform, and most of these are small to medium sized businesses. 

“Facebook has an enormous number of advertiser clients,” said Nicole Perrin, an analyst at eMarketer. “They’re definitely pretty reliant on the long tail of small business advertisers.”

We can see this in our data. In January and February, only 14% of Facebook advertisers advertised in other digital formats. Of the brands who only advertised on Facebook, 43% are mostly made up of retail, entertainment, and professional services companies.

Some large brands are also exclusively advertising on Facebook right now. Notable brands who only advertised on Facebook in the first two months of the year include:

Of the 14% Facebook advertisers who advertise across other digital formats, this is what the digital advertising landscape looks like:

digital landscape facebook advertisers who use other formats

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