StreetFight published an interview with Facebook’s Dan Levy who oversees SMB programs. The thrust of the interview focuses on the declining organic reach of Pages. It has been controversial and some see a conspiracy to generate more ad revenue for the company.
What was more interesting to me, however, was the part of the interview in which Levy is asked about Facebook and its attitude toward SMB resellers. Here’s the excerpt:
SF: Last year, it appeared as though the company was committing to a reseller approach. Is that still the case?
Levy: We’ve talked to just about every major distribution partner that works with small businesses across the world. And they’re all interesting because they reach a lot of small businesses and they provide something that’s really important, which is kind of the human connection with those businesses.
However, historically, we’ve not found it hugely valuable yet, simply because we have such a challenge in front of us already with 25 million active, engaged small business pages and only a million advertisers. We already have the touch point with the business, and for us it’s about trying to continue to prove the value to get them to engage more deeply and become advertisers, whereas I think a lot of the value of the channel is actually kind of getting out to reach those businesses. That is a fortunate problem that we don’t have right now.
Facebook believes that on its own it can convert some percentage of its massive “installed base” of SMBs into advertisers. That may be true but it’s going to be considerably more challenging that the company currently believes.
Mark Zuckerberg himself probably has some — though perhaps limited — understanding of the needs and attitudes of small business owners. (His dad was reportedly a dentist.) However COO Sheryl Sandberg is pretty familiar with the challenges of converting SMB advertisers, having been one of the early movers and shakers behind Google AdWords.
What’s clear is that Google was never able to successfully figure out a way to make self-service truly accessible to mainstream SMBs. The company cultivated and later reinvented its extensive (if troubled) network of resellers. Most of the resellers themselves are ambivalent at best about their relationships with Google.
I had a conversation the other day with one of its prominent resellers who was interested in migrating away from clicks/leads sourced on Google because of their cost and the fact that they provide thin margins.
But back to Facebook. For self-service advertising to succeed, Facebook would have to do a number of things:
- Establish an ongoing dialog with small business owners (advisory council, regular focus groups)
- Provide much more education (online, in person) for SMBs about how to succeed
- Simplify advertising on the site even further (much more than Facebook realizes)
- Offer a directory of approved providers who can “do it for me” if the SMB can’t or doesn’t want to
- Offer live customer support
If it can do all these things and do them well then it has a fighting chance to bring some of those 20+ million SMBs over into the advertiser ranks. I suspect however that Facebook will do some of the things above and ultimately conclude that it needs resellers to touch the millions of SMBs it wants to advertise on the site — even though they may already have Pages.