Facebook SMB Chief: We’re Changing — Small Businesses Need to Change With Us


Three years ago, Facebook’s COO Sheryl Sandberg called the small business advertising market the web’s holy grail. Now, after fits and starts, the social network appears to be making good on her statement, announcing earlier this month that two million businesses advertise on its platform.

But the news comes as the relationship with those small business has worsened. In October, the company warned advertisers that “unpaid marketing pitches” would see a “significant decrease in distribution” in News Feed, the company’s core distribution product. Facebook framed the decline in organic reach as a necessity to protect the quality of the News Feed product, but many small businesses scoffed at the characterization viewing the move as a bait and switch.

Now, in an interview with Street Fight, Jonathan Czaja, the head of small business in North America at Facebook, says that the decline in organic reach reflects a wider evolution of the social network as an advertising platform. He admits that the type of relationship marketing, which become popular among small businesses in the early days of Facebook, will become less valuable as the company moves from more basic social advertising metrics to “business objectives” and discusses new initiatives to build customer service into the company’s engineering-first culture.

In many ways, the big question for Facebook’s small business team has not changed since we spoke with Dan Levy, the director of small business globally, a year ago: for many advertisers, it feel like a bait and switch. They spend the time and money building these communities on Facebook, and then suddenly, Facebook starts to charge these businesses to reach the audience they developed.
The reality is that Facebook as an advertising platform is evolving. We started with ads based on social metrics, and what we’ve done is spend a ton of time building advertising products based on business objectives rather than social actions. We’ve seen this platform evolve and now our advertisers are having to evolve with us.

The guiding light in [the decision to reduce organic reach] is to protect the news feed experience. We believe the best way to help advertisers reach the people they want to reach is is to make sure consumers are thrilled with News Feed experience. News Feed is getting crowded — there’s just more competition so [the decision to reduce reach] is a reality of newsfeed getting bigger.

A few days after Facebook indicated that it would reduce organic reach, Forrester analysts Nate Elliott advised marketers in a post that they should stop relying on Facebook solely as a relationship marketing tool. Do you agree?
I do.  I think the way that folks think about utilizing Facebook has changed for a lot of reasons. A decline in organic reach does limit the amount in which you can communicate with your customers in the way you used to be able to do on the platform. I would agree with that.

So what’s driving small businesses to go out a build a community on Facebook even given the declines in organic reach??
There’s still a lot of value to the Page apart from distributing content to your fans. We’ll have a lot more to say about Pages going forward, and we do think it’s important that small business create a presence on Facebook and demonstrate the value they bring to their customers.

You come from Bonobos where you headed up one of the most lauded customer service organizations in retail. Could you talk a little about the customer service problem at Facebook and the need for the company to build these non-technical aspects of their business?
Facebook has underinvested in the service it has provided to small businesses. These companies are pouring their heart and money into their platform so we need to not only build products for them, but also provide the support to help them use our platforms.

Subsequently, we’re starting to heavily in building a customer service organization because we realize small business require a level of support that we’re not providing. For instance, we’re testing live chat capabilities today, so we can talk with Facebook advertisers to do things like screen sharing and we’re close to testing voice support as well.

Facebook has taken a more product-based approach to this marketplace in part because we’re an engineering-first company, and like a lot of tech companies service is something that trails in our priorities. But we realize that we need investment, and you’re going to see a big push by us to reestablish that connection.

Can you expand on the push to build a customer service organization? Do you have any criticisms of how Google — arguably the largest small business advertising platform — has built out their organization?
You’re not going to be blown away by the stuff we’re doing because the first step for us is to provide customer experience that is on par with the basic ecommerce experience. We need to offer the ability to contact us if you have an issue. We’re also going to invest heavily in self-help tools, online courses and other self-help information. For us, we need to figure out how to delight customers with a level of service that also operates at meaningful scale. How do you apply this in a way that meet the need of two million advertisers in a cost effective way?

Among brands, one of the big initiatives to move beyond social metrics has been the development of Lift, a tool that allows marketers to measure the relationship between in-store sales and Facebook advertising.  Is that a viable model for small businesses?
We’re seeing a lot of promising results [with Lift,] but the challenge is that, at the moment, it’s only effective for the larger advertisers who can provide a large enough sample of point-of-sale data to demonstrate lift. Without that large dataset its much harder for marketers to measure performance, so I’m not quite sure if it will apply all the way down to single stores in small locales.

Steven Jacobs is Street Fight’s deputy editor.

  1. Facebook User
    March 17, 2015

    Alignable surveyed over 1,400 small business owners on the likelihood they will pay to promote their posts. 68% said No, 14% Yes, 18% Unsure.


  2. Sherm Stevens
    March 17, 2015

    One point not discussed here is the constant battle with FB over ads getting denied and accounts getting shut down without provocation. I worked with a FB Go sales rep for 2 months to ensure my ads were compliant and still got one of my ad accounts closed, then reinstated, then closed… for no apparent reason. Facebook needs more transparency. I am a legitimate agency wishing to follow all the rules, but it’s impossible when the rules keep changing.

  3. March 21, 2015

    Smart small businesses are realizing they wasted a lot of time on Facebook and need to get back to the online presence they *own* – their websites. We’re seeing a lot of that in our area – most SMBs have upgraded their websites and are using them for more topical content, spending less time on FB (and Twitter, for that matter), realizing people are finding them via search engines, NOT via FB etc. The wise businesses also are not giving FB a cent. They provided free content and endless promotion (slapping little “f’s” all over private websites) for FB for years … thinking it would pay off … and now they are being completely dissed. You unfortunately have to maintain a nominal presence there, but nothing says you have to send your hard-earned, limited marketing $ to out-of-state billionaires.

  4. March 25, 2015

    My name is Sam Bell and this article really resonated with
    me. My company and clients represent the SMB’s that you were directly referring
    to in the article that do pay for advertising on Facebook and I can definitely
    shed some light from the customer side and provide what may be some invaluable feedback
    as you move forward on improving the customer service experience.

    My clients and I have literally become dependent up the
    Facebook ads platform to make living through marketing our products and
    services and as Ad agency owner I have recently seen 3 to 4 business decimated
    over the last 2 to 3 months due to having their accounts shutdown without any
    rhyme or reason. They have gone through all the proper channels to reinstate
    their account by providing proof that they are real people and business by submitting
    their Government issued ids and pleading for help from customer service to no
    avail, other than a canned.

    I would like to know if you are open to a few suggestions
    and ideas from small agencies such as mine that are in the trenches and working
    with Small Business Owners daily to help improve the customer experience and
    continue to add value to the Facebook community as a whole.

    -Sincerely Sam Bell III

      May 20, 2015

      We have had a similar same experience. Capricious and random account shutdown has us aggressively pursuing alternatives for our clients in responsible self-defense. its unfortunate as we started out as advocates (even evangelists) for Facebook ads to our clients and industries.

      I understand the need for caution when opening such a platform to the masses (as there WILL be abuse), however there is a “shoot first and answer no questions later” operating basis. Why are new advertisers and long standing established advertisers treated the same? For example, I would be willing to undergo almost any level of professional scrutiny and certification if we could achieve a “trusted” status with Facebook where we get contacted BEFORE account shut down and given a chance to remedy it before upsetting the client. We feel like we’re always trying to prove we are not criminals and begging a largely deaf FB to listen.

      My other beef is that Facebook seems to have placed an emphasis on automating their advertiser customer contact with canned responses and a lack of actual human contact. Ironic for a company that defines the social network concept.

  5. HumDog
    March 25, 2015

    I agree with what Sam Bell stated. Ads get disapproved and accounts shut down for reasons that are not even clear. I have had ads disapproved and it was a photo of a woman smiling. Apparently a woman smiling was not approved because it “depicted a perfect set of teeth”… This is the kind of retard stuff that Facebook needs to correct!!! I’m also a digital marketing agency and it just frustrates clients when ads are denied that don’t even make common sense.

  6. D_Studios
    May 11, 2015

    Is any other agency business extremely hindered by the $10k minimum needed in order to establish a line of credit? Many of my clients have corporate policies that do not allow them to pay for media with a credit card or PayPal. And if they do, they don’t have a credit card with enough of a limit to pay for for campaigns exceeding a few thousand dollars each month. Many of the brands I work with are LARGE companies that are spending MILLIONS elsewhere. Facebook is completely missing the opportunity to capture these ad dollars and help make the brands who aren’t in the top-tier and working with sPMDs a success.

  7. Zee Hamdani
    May 19, 2015

    While Facebook is a good way to keep your customers up to
    date with your business, one should solely not rely on Facebook. This is mainly
    because these days I’ve noticed that many people are not paying attention to
    their Facebook a lot. They are randomly just scrolling through their newsfeed
    just to pass time. So if this were the case, then Small Businesses would
    benefit more from other types of advertising; something that would catch the
    customers and the potential customers eye.

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