Dec 02, 2014

Does Facebook’s decision to charge businesses for followers to see their status make it unusable for small businesses?

I like in a city that is in the middle of something of an economic and cultural revival. There are a lot of artists and entrepreneurs setting up shop in the downtown area that was nearly deserted. Much of this has been possible due to low rent costs and crowdfunding, which really requires a high level of communication with customers and supporters to succeed. Facebook has definitely played a role in facilitating this, and has been one piece of the puzzle in getting these efforts off the ground despite limited capital. Facebook is instituting a policy that will demand payment from small businesses so that their customers/supporters who haved liked the business and have followed it will only get updates that the business pays Facebook not to filter it out of followers news feeds.

These are businesses that are just starting out and are operating on very little capital. Will it even be viable for SMBs to use Facebook when this policy takes effect in January, or will Facebook become the domain of established businesses with deep pockets?
These moves are certainly not good for small businesses. On one hand, I can understand Facebook wanting to get paid for providing a social media advertising platform for businesses. On the other hand, they ARE paid already by using the information that they gather on users, including things such as what small businesses they like and follow.

This is really going to impact different types of small businesses in very different ways. For example, a traditional small business, let’s say an established local hardware store, is likely to use Facebook as a way to promote specific products or sales campaigns, making use of the social media platform in a manner that isn’t all that different from traditional advertising methods. In contrast, a crowdfunded startup such as an artist collective is going to much more focused on building relationships with supporters and potential clients so that they can build the business into a sustainable entity. The former will decide to apply it’s advertising budget however it sees fit, and can chose whether or not it wishes to do so with Facebook. The latter will not have that same freedom to decide - without social media engagement it is more likely to wither on the vine before it reaches a self sustaining level, but it may not have the thousands of dollars needed to promote its posts so that they are not lost in the crowd.
The Wall Street Journal has an article about the impact of the new Facebook rules on entrepreneurs. Check it out for their take on the issue.
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