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For businesses trying to reach customers and potential customers online, Facebook, with its more than 1bn users, has become a platform that can't be ignored.

And what's better than a platform with 1bn users? A platform that, up until now, has been largely 'free' to market on.

But thanks in large part to the pressures it faces as a publicly-traded company, Facebook is becoming less and less free to companies looking to market themselves to consumers. And as detailed by the Wall Street Journal's Sarah E. Needleman, the company's increasingly aggressive efforts to generate revenue have some businesses rethinking their relationship with Facebook.

Bait and switch?

With Facebook pushing ad offerings like Promoted Posts, business owners who thought that their Facebook Pages were owned media are learning the hard way that using the world's largest social network to drive sales can be an expensive proposition.

Case in point: Needleman cites business owner Richard Bishop, who estimates that he'd need to spend at least $9,100 each year to promote his 35 weekly Facebook posts to the 1,500-plus fans of his company's Facebook Page. "All of a sudden they're saying a minimal percentage of your fans will see your posts unless you pay. They devalued the value of a fan," Bishop stated.

Another displeased business owner, Lindsay Gonzales, told Needleman that she tried Promoted Posts, but called it a "waste of money" because she still had no control over whom Facebook exposed to her posts.

It's all about ROI, if you can measure it

Bishop and Gonzales are almost certainly not the only business owners who feel that Facebook has pulled the rug on them, but not everyone is upset aboutpaying for what they thought was previously free, however. Needleman points to restaurant owner Joe Sorge, who says he's spending approximately $1,000 a month on Promoted Posts. And according to Sorge, sales are up.

Just how Sorge has tied his spend on Promoted Posts to higher sales is not described, and it may not matter as far as Facebook is concerned. So long as businesses believe they're getting extra mileage from their Promoted Posts, they'll consider the investment worthwhile. According to Facebook, use of Promoted Posts is up significantly, indicating that, at least for the time being, there are enough advertisers willing to believe.

But Facebook shouldn't assume that this will last forever. It was far easier for business owners to ignore the soft costs associated with their Facebook efforts than it will be for them to ignore the hard costs imposed by Promoted Posts and other paid offerings. To build a base of loyal customers similar to that of Google, Facebook will realistically need to make it easier for advertisers, particularly those less sophisticated, to tie their Facebook spend to sales. And if history is any indication, that's not going to be easy.

Patricio Robles

Published 12 October, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

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Ron

When will small businesses learn not to build their business on the borrowed land that is Facebook?

Instead of using Promoted Posts, start a blog, put title of the blog post on your Facebook page, when fans click to read the blog post have an email sign up form so you can build a direct relationship with them without using Facebook.

Using Facebook as a main way to build a relationship is crazy when Facebook control how you can do it and how much you’ll have to pay to do it.

about 4 years ago

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jsncruz

Ron brought out a good point about the power of starting a brand blog.

Fine, Facebook can help a brand gain gross numbers and these numbers may even be targeted BUT how many of these people will engage in conversations on and across the brand's page? It's ridiculous how much money some brands are spending for page Likes - when Likes no longer mean true engagement (at least, not like a year or more ago).

If money spent on paid Likes aren't gained back from on-ground sales, then this is just another ego-boost for brands (and an expensive one, albeit). If brands want to gain a solid online following, TALK to people and TAKE CARE of those who talk back to them.

about 4 years ago

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