Why small businesses likely won’t suspend their Facebook ads

Kristin Schwab Jul 2, 2020
Heard on: Marketplace
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Many of the companies boycotting Facebook are major brands with big budgets. Daniel Leal-Olivas/AFP via Getty Images

Why small businesses likely won’t suspend their Facebook ads

Kristin Schwab Jul 2, 2020
Many of the companies boycotting Facebook are major brands with big budgets. Daniel Leal-Olivas/AFP via Getty Images
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Despite its name, Anything but Beer, the brewery in Syracuse, New York, makes a lot of it. There’s a hopped apple ale and a Szechuan peppercorn imperial ale — all gluten free. And that appeals to a specific type of customer. The brewery’s chief marketing officer, Brittany Berry, says advertising on Facebook makes it easy to zero in on people looking for gluten-free products.

“If I go out and get our local newspaper, what is the percentage of people that it actually reaches that it’s relevant for?” she said.

Because Berry is spending only on ads that target her most promising potential customers, she gets a lot more for her money. Local TV ads cost thousands of dollars. Advertising an event for a week on Facebook costs her $200.

“Traditional marketing is out of our price range,” she said.

The exodus from Facebook is growing as hundreds of companies pledge to suspend advertising on its platforms as part of the movement to force the social media giant to do more to eliminate hate speech and misinformation. Many of the companies, like Verizon, Honda and Adidas, are huge brands with enormous budgets, and their boycott will exact a price. But the biggest chunk of Facebook’s $70 billion ad business comes from small businesses, which account for nearly 75% of its annual ad revenue, according to Deutsche Bank.

And it’s the combination of cheap advertising rates and curated viewers that attract small businesses.

“There are just so many different levers that you can pull in terms of targeting, region, spend, testing, learning what works and what doesn’t,” said Danielle Thompson, account director at marketing agency Blue Bear Creative.

And there are 3 billion users across Facebook’s platforms, which include Instagram. Where else can a small business go and find all that?

“So that’s the question right?” said Jennifer Grygiel, a marketing professor at Syracuse University. “It’s something even the big brands are wondering about.”

Brittany Berry at Anything but Beer said she doesn’t love Facebook, but she also can’t afford to leave it — especially now, when the best way to reach people stuck inside is online.

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