How Is Facebook Thinking about SMB Targeting, Segmentation?

Facebook FitFacebook launched its SMB roadshow in New York today: Facebook Fit. The company also announced that, globally, it had 30 million small business Pages (Business Pages) on the site. That’s up from 25 million just a few months ago — although that number includes SMBs with no offline presence.

I asked Facebook in San Francisco at the Street Fight event today about geographic distribution. Alas no new insight was provided. The official number of advertisers remains 1 million.

ZDNet was in the audience and offers some observations on the day. A reporter I spoke with this morning who was also in attendance in New York called it “slick” and said advertising was barely mentioned.

Apparently also in attendance were some SMB marketers who use Facebook. One mentioned in the ZDNet article is Fairway Market, a regional grocery store chain in the New York area. The company reportedly has a $12 million annual marketing budget. 

While this technically might qualify as a “small business,” it’s pretty far removed from traditional SMBs, which have fewer than 10 employees. This got me thinking about Facebook’s opportunity and how it’s segmenting the SMB market.

The yellow pages industry historically saw an average annual advertiser spend of just under $6,000.

I’m wondering if Facebook’s ultimate plan involves focusing on much higher-spending SMBs that will have in-house marketing personnel and “real” marketing budgets of $100,000+. I know that at least right now the company is directing its message to SMBs broadly and not just high spenders.

But Facebook will probably have a great deal more success if it segments the market (its installed 30 million base) according to certain marketer profiles.

Facebook can probably can identify certain characteristics of SMB marketers on the site that are going to be more growth oriented and capable of taking advantage of the social networks’  marketing capabilities. It’s an interesting exercise: to see if the company can use its own tools and data to identify the best prospects from among the 30 million.

In the same way that ReachLocal’s early prospecting involved calling quarter page (and above) print yellow pages advertisers, I also wonder if Facebook will target AdWords SMBs among its 30 million SMB Page owners and go after those who aren’t already Facebook advertisers.

What’s your prediction? Will Facebook succeed where others have failed to gain direct SMB self-service enrollments? What SMB segmentation approach do you think the site should use?

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6 Responses to “How Is Facebook Thinking about SMB Targeting, Segmentation?”

  1. Marketing Day: Facebook Pages New Look, Google's Video Ad Marketplace & Hootsuite Updates says at

    […] How Is Facebook Thinking about SMB Targeting, Segmentation?, Screenwerk […]

  2. Terry Wall says at

    Greg, so far–as I understand it–Facebook has resisted recruiting a ‘sales force’ to go after SMBs, in favor of the direct approach. At what point might that change, in order for them to leap forward, instead of crawl? And of course, we KNOW the challenges of onboarding a sales organization to pursue SMBs…it’ll be interesting to watch this story unfold.

  3. Greg Sterling says at

    That’s correct. I think they’re going to experiment (if they haven’t already) with telephone sales. But ultimately, like Google, they’ll have to use some mix of approaches: inside sales, resellers and marketing to generate in-bound and self-service signups. The larger point is (depending on who they pursue) they’ll need some sort of sales/support organization to help onboard and service these customers.

  4. Malcolm Lewis says at

    Rather than how to sell to smbs, I wonder what Facebook has to sell in the first place. What’s their value prop for smbs? For Google/YP/Yelp/Foursquare/etc. it’s obvious – be found/featured when people are looking for a local business like yours. How many people go looking for a personal trainer on Facebook? And how many people want to see a post from a plumber pop up in their FB feed that by definition is social not commercial? I know these questions have been asked a million times before, but until FB can answer them I suspect go-to-market strategy discussions are moot. My 2c.

  5. Greg Sterling says at

    I think Facebook would say it’s selling “your message” to audiences and people with specific interests. It essentially sells audience targeting.

  6. Malcolm Lewis says at

    Yes, but is that audience receptive to the message when it is delivered? It’s the old user intent discussion. Doesn’t targeting requires intent to be effective? Presenting me with a newport beach plumber ad when I’m looking for a plumber in newport beach on Google is likely to get a click. Showing me that same ad when I’m chuckling over greg’s TBT photo is not likely to get a click.

  7. Greg Sterling says at

    Yes . . . search vs. display

  8. Marketing Day: Facebook Pages New Look, Google’s Video Ad Marketplace & Hootsuite Updates | says at

    […] How Is Facebook Thinking about SMB Targeting, Segmentation?, Screenwerk […]

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