Facebook COO Sheryl Sandberg, who recently interviewed Oprah Winfrey at Facebook's headquarters, used to work for Google as vice president of global online sales and operations. She helped build Google AdWords into a revenue godsend for the search giant. Now, she envisions the small businesses that joined Google's ad program switching their advertising money to Facebook.
The US has nearly 30 million small businesses, and Sandberg estimates that 9 million of them are using Facebook to speak to their customers. Only "hundreds of thousands" are spending money on ad campaigns though, she says, which is significantly less than the 22 percent estimated by a recent survey.
Either way, Facebook wants to step up its game when it comes to small businesses. The company plans to offer free $50 advertising credits for up to 200,000 small businesses to help them increase sales. When an ad is clicked, the advertiser pays a set rate predetermined for that clickthrough.
Facebook knows most small businesses are too busy to try its ad program; they are already happy with their free Facebook Page and don't want to spend money. The point of the credit system is to get them to at least try it out. "Credits like that can go a long way," Sandberg told USA Today. "For $50, most small businesses can target every single person they need to target at least once, and then they can grow their business from there."
"So my dream is really simple," says Sandberg. "I think every small business should be using technology, they should be using all of the Web technologies, and they should be using Facebook. So we're not going to stop until all of them are using it to grow their business."
When she worked at Google, Sandberg used to say that about 50 percent of small businesses didn't have a website yet. While now she says the number is in the 40 percent range, she argues it is easier for small businesses to use Facebook, since they don't have to pay for building a site. Furthermore, most people can make and maintain a Facebook Page because it is very similar to what they already do with their personal profile.
There are at least three advantages to using Facebook's ad platform: a user base of 750 million active users, being able to target users with a precision not found in most other forms of advertising, and Social Ads, which lead to a 68 percent increase in ad recall (meaning people actually remember the ad) and a four times higher likelihood of buying a product. "Facebook takes word-of-mouth marketing and makes it work at scale," Sandberg said.