Facebook lost up to $100 million in revenue during its Oct. 4 outage that lasted more than four hours. And Mark Zuckerberg’s personal wealth reportedly fell by more than $6 billion in that same time frame.
But I’m more concerned about the impact on the small businesses who utilize social media as their only source of advertising. Depending too much on Facebook (or other platforms) has become a common mistake by business owners and the impact is becoming more costly each year.
I remember a time when social media success meant posting regularly and having engaging content. If you got in earlier enough, you could build an audience and aggressively drive your message if you had a good content plan. Those days are gone and small businesses need to adjust accordingly.
Here are three ways putting all your marketing dollars can cost you money and customers.
Since 2018, there have been constant algorithm changes from all the social media platforms, especially Facebook (which owns Instagram). That’s around the time Zuckerberg announced we would start seeing more of our friends and family in our newsfeeds. Since then, we’ve also seen major algorithm changes in response to political bias, the rise of “fake news,” ongoing privacy concerns, and other updates from Facebook to improve the member experience.
Each time these algorithms change, it impacts who sees the content small businesses push out and how often they see it. That means business owners need to understand and adjust to each of these changes when they happen. If you have ever seen your engagement on social media suddenly drop and you didn’t change what you are doing, it’s likely an algorithm change you haven’t responded to.
The one common theme among all these changes is that organic reach has continued to decline.
According to Trusted Insights, the median engagement rate for unpaid content on Instagram is around 0.31% now. So, a business with 1,000 followers is only getting engagement from 3.1 of them with the content they work so hard to push out.
Instagram is currently adding more tools to help small businesses advertise, but they each require paying some form of commission to the platform.
Changes to Facebook ads
The response to lower organic reach is paid advertising and many small businesses have benefitted from Facebook ads in recent years. They are more affordable than many forms of advertising and the ability to target and get reporting makes them more attractive to businesses with smaller advertising budgets. But that targeting is becoming more difficult with recent changes and the cost of running effective Facebook campaigns continues to rise. Facebook also continues to implement various rules that reject or delay the ads that would have been fine less than a year ago.
Today’s Facebook advertising requires more time to understand and manage the Facebook ads. That includes defining audiences correctly, A/B testing, and setting the right KPIs beyond likes and comments. It’s easy to waste money running ineffective ads before realizing they aren’t working as they once have. Decision-makers must ask what good is 100 likes if you aren’t seeing the conversions for your business?
Facebook ads are still a good way to reach your audience but it’s important to have clearly defined goals and the processes in place to monitor campaigns closer than before.
Don’t lose your voice
The falling organic reach and challenges with Facebook ads are critical things to consider. But I view the most important reason not to put all your eggs in the social media basket is that you don’t own your audience. You can have 100,000 followers on Facebook today, but it doesn’t matter if only a few will see your posts. In 2020, the average engagement was down to .25%. A business with 100,000, might reach about 5,000 people and get 250 to engage with the post.
Most small businesses don’t have close to 100,000 followers on social media, and those same businesses can’t depend on the rising cost of doing Facebook ads.
And what happens the next time Facebook has an outage? What if it happens during your peak season or a special event or sale? What if Facebook is forced to make other changes that prevent you from getting your message out. You can lose your voice overnight and struggle to reach the audience you’ve worked hard to build.
With targeting becoming more challenging and the cost of advertising going up, it has become critical for small businesses to build their own database of customers and be able to communicate with them frequently.
The goal is to have a variety of ways to engage your customers, starting with a quality website as the foundation. With an effective website, you can build your own database for a newsletter and use traditional forms of media to attract new clients.
Social media is still valuable, and I encourage people to use it as a tool in the kit. I also think most small businesses should have a social media strategy. But it should be part of a bigger marketing strategy that you have more control over.
If you are struggling to find that balance of doing social media the right way, while also being smart about your overall marketing strategy, let’s set up a free consultation. Contact us today to get schedule a conversation that can change how keep and attract new customers.