Anyone who watched the daily deals industry slide from penthouse to poorhouse knows that today’s phenom can easily become tomorrow’s fizzle. And, to judge from the plentiful post-mortem commentaries on the fortunes of the likes of Groupon and Living Social, omens of pending trouble were evident long before it hit.
Which brings us to Facebook. The social media behemoth, while still red-hot, seems to show some of the same warning signs. Chiefly, those consist of multiplying competition in the face of moderating growth and a growing disaffection among some small businesses that make up most of its paying customers.
Take Martha Baur. Co-owner, with her husband, Carson, of Mosquito Squad of Greater St. Louis, Baur has spent a lot of time during the last four years marketing the pest control business on Facebook. Lately, however, her attitude has changed.
“Originally I looked at it as a way to get new customers,” she says. “But I’ve hardly had anybody ever call and say they found us on Facebook. So now I look at it as a way to interact with our existing customers.”
While she still posts actively on the business’ Facebook page, Baur has no plans to buy any of the paid ads that are contributing to Facebook’s revenue growth, in part because she sees them as contributing to a decline in the service’s appeal. “I feel like Facebook is now promoting so many businesses through ads that when I log on now, I’m inundated with ads,” she says. “It’s not as fun or exciting for me as a user anymore.”
Moderating Growth and Multiplying Discontent
Although Facebook recently passed the formidable 1 billion-user mark, its record of adding about 55 million monthly active users per quarter hasn’t changed much. That means its rate of growth is slowing, while rivals like Twitter, LinkedIn and Facebook’s own Instagram have been growing at faster rates.
In another worrisome sign, business owners may be tiring of Facebook. More than 60 percent of small businesses that have put money and effort into social media for marketing and other purposes are seeing zero return on their investments, according to a recent survey by Manta. Nearly one in five said the most difficult social network to work with is Facebook.
Facebook’s attempt to be all things to all people presents marketers with a problem, says Manta CEO Pam Springer. “For SMBs, many of the social networks are too broad and not focused enough on meeting their specific needs,” she says. “As a result, it's not reaching the right audience and not translating into business leads.”
Manta has its own social media platform targeting small- and medium-sized businesses, so perhaps it is expected that the Columbus, Ohio, company’s survey findings support the need for alternatives. But Springer’s criticism is echoed by people like Kevin Raymond, a partner in K & E Sheet Metal, a custom sheet metal fabrication and installation company in South Glens Falls, New York.
Raymond views Facebook primarily as a social media platform where commercial messages are unwelcome and unhelpful. “I never felt like people wanted to engage with my business on Facebook,” he says. “The inundation of baby pictures and friends' incessant, mundane babble seemed to keep any possible customers from getting through.”
Raymond last year left Facebook completely. “I used Facebook as a personal and business tool for many years with minor success,” he says. “I can't say that we necessarily made any revenue directly from Facebook.”
The flood of social messages isn’t the only issue. Facebook’s constant changes, for instance, frustrate business owners who have limited time to learn and relearn technology.
Some changes, such as implementing a charge to message users who have liked a page, also hit marketers in the pocketbook. As a result, the cost per thousand for exposing a message to Facebook users can approach the CPM for premium advertising, according to some.
Some of these issues probably stem more from users’ flawed perceptions of what Facebook is than from flaws in Facebook. When budgeting attention they’ll give to Facebook, experts say marketers should realize that social marketing isn’t equally effective for all businesses. What what works for one company may not for another. So small business marketers need to focus on what produces measurable improvements.
Effective social marketing requires finding what works, and then working it, says Amanda Sibley, global marketing relations manager at HubSpot, a Cambridge, Massachusetts, maker of marketing software.
“The time you spend creating and promoting content for your social channels should be directly related to the return you’re seeing, what’s working, and what isn’t--there isn’t a magic bullet for every business in every location, so testing, learning, and applying what you learn based on data is critical to success,” she says.
While investing heavily in social marketing isn’t appropriate for all businesses, almost any business should have a free Facebook page filled with keywords and images of its offering, Sibley says. Depending on what generates the best results, a business owner might put comparatively more time and effort into the company website, a blog or another social platform.
That describes Raymond, who says he invests far more time, with far greater results, into Twitter, which he’s found ideal for connecting with other businesses. It’s still not translating directly into new customers, he adds, but it is effective for engaging with and learning from existing customers.
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Social Wild Cards
There are signs that Facebook’s woes may worsen. For instance, trendsetting young people may be starting to turn away from the platform created specifically for them. Facebook’s recent annual report filing warned that its own newly acquired Instagram was cannibalizing younger users from its mainstay platform. And Instagram, where people exchange digitally doctored photos, is almost entirely social, with little business presence and no paid ads.
No hard evidence quantifying Instagram’s effect on its parent’s youth appeal has surfaced. Sibley, for one, doubts young people are seriously alienated. By prioritizing easily consumed visual content and instituting its new graph search feature to make it less necessary to leave Facebook for searches, the platform is handily maintaining is youth relevance, she says.
Given Facebook’s size in both absolute terms and compared to other social media, it seems unlikely it will soon suffer daily deal-like reverses. But it does seem likely that subscriber growth, especially in saturated North America, will moderate while niche-oriented services lure business users.
In St. Louis, however, Mosquito Squad co-owner Baur has no plans to stop interacting with existing customers on Facebook. Cultivating repeat customers is critical for her seasonal business, she notes, and her customer demographics neatly match Facebook subscribers.
And Facebook is the first place she goes to tell customers about her company’s charitable activities, such as sponsoring a tree in the city’s much-venerated Forest Park. “I love Facebook for the fact that you can interact without hounding them with emails,” she says. “It’s at their discretion to go online and see what we’re doing for the community.”
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Photos from top: iStockphoto, Facebook, Getty Images