Facebook advertising has become more expensive and small business owners are feeling the pinch, according to The Wall Street Journal.
The social media giant has revealed the average price per ad on its site increased by 123% in the most recent quarter when compared to the previous corresponding period.
Facebook shows ads to users based on their profile information – including age, interests, relationship status and location. More than 12 million Australians use Facebook, representing an unprecedented opportunity for businesses to promote their products and engage with customers.
Foad Fadaghi, managing director of Telsyte, told SmartCompany targeted Facebook advertising is a good way for small businesses to amplify their brand because not everyone can afford a full-page newspaper advertisement.
But he says Facebook raising its prices could be a concern for some SME operators because previously social media was renowned for being quite a level advertising playing field.
“It’s not too dissimilar from the early days of Google where the price of AdWords was going up and some people were being priced out of the market,” says Fadaghi.
“That was a similar challenge for small business operators. If small business owners are getting priced out it is a reflection of the platform being used by large businesses,” he says.
However, Fadaghi said even though SME owners often have a small budget to spend on advertising and marketing, they shouldn’t be too worried about being priced out of the market.
“It’s about targeting and being very specific about who you target on Facebook to get the most value,” he says.
“For those on smaller budgets it requires more work on how you utilise that budget for competition on the same keywords than you might have in the past.”
Advertising keywords have made headlines lately, with a Victorian-based insurance firm attempting to promote its business following the MH17 Malaysian Airlines disaster.
Fadaghi says businesses need to be smart when it comes to advertising their company online and do more than just throw money at marketing campaigns.
“Today it’s a lot more sophisticated in the way marketers will buy keywords on Google, and similarly small businesses need to develop strategies and use the features and functionalities of platforms. That could be non-paid functionalities – just like organic SEO [search engine optimisation].”
Earlier this month, Facebook posted $US791 million in profit for the April-June quarter, with mobile advertising making up 62% of the company’s revenue.