19 May 2010

Facebook deals a MASSIVE blow to small business

17 Comments facebook marketing and advertising

Yesterday afternoon, developers all over began complaining that they couldn’t create FBML pages, the necessary elements of custom landing pages.  The new rule was that you had to either have 10,000 fans or have an account rep, which means that you’re spending money on advertising.  We have some clients that spend $200k on Facebook ads, so it’s not clear what the threshold is to qualify to have a rep– I believe it’s around $5k a day, but that changes and Facebook will not comment on the issue.

In short, you are either a major brand or you are willing to pony up money like a major brand.  If you’re not, then tough.  The catch-22 is that to have a fighting chance to grow to 10,000 fans, you need a custom landing page tab to allow you to ask users to fan you, insert videos, and perform e-commerce.  Overnight, Facebook has instantly zapped a number of businesses that were reliant upon their Facebook presence to promote themselves.  

At the same time, a number of agencies and software shops such as BlitzLocal that specialized in Facebook pages are also in trouble. Even those firms that specialize in Facebook ads will be massively hurt, since without custom landing pages, their conversion rates will suffer.  Those pages that were fortunate enough to have already made custom tabs– their default setting reverts back to the wall.

WHAT THIS MEANS

If you want to play, you have to pay.  That’s pretty clear— unless you’re spending money, and a LOT of money, you’re not important. For our big brand clients, not that big a deal. For local businesses, this just underscores the risk of building your business on someone else’s website. You’re at the whim of their policy changes.  Keep your regular website by all means as an insurance policy.

If you’re a household name, you have far less competition for traffic now– consider yourself lucky, but also know that privacy is a major hurdle that Facebook is struggling with– and the timing of this decision is quite poor.

Advertising can still save the day.  When Allah giveth, Allah also taketh away. Sure, we lost the best part of Facebook pages, but we do still have some insanely good targeting on Facebook ads, where you can target down to the individual person.  As a test, I ran an ad targeting folks who live in Alabama, work at BlitzLocal, and are of an certain age.  Only one person in the world meets that criteria– and I bombarded him with ads that have his name in all caps.  You can still run your ads to your regular website and get fans using global like.

WHAT YOU SHOULD DO

Make sure you are running multiple sources of traffic and maintaining at least your Facebook page and regular (WordPress) site.  You never know when one company stumbles and another arises. Don’t put all your eggs in one basket.  Facebook may reduce their 10,000 fan requirement– in the past, they had high minimums to choose a vanity url.  Who’s to say that they may change this rule once they realize how badly it hurts the local businesses who just can’t get to 10,000 fans.

Try out MySpace and Google Content to hedge your bets on Facebook.  The traffic is not as cheap, but these folks have been pouncing at Facebook’s missteps.  I’d say that this recent change is the most FRUSTRATING thing that I’ve seen from Facebook so far– far more than Beacon or even the recent privacy issues.  Facebook is a young company– some of the brighter folks there are probably lobbying to get this changed– and youngsters when they fall down, can often get right back up and learn from their mistakes.

Meanwhile, BlitzLocal is halting the small business page development efforts on Facebook and moving to other platforms such as WordPress.  Jason Calcanis and others are making a stink about Facebook’s recent moves and now deleting their profiles, gathering the masses to leave.  While normal for Jason to gather attention as such, he does have a valid point that when Facebook shifts their policies on pages and apps, as we have witnessed in the last 3 years, then your investment in Facebook is unstable.

How has this change affected you?

UPDATED NEWS:

Facebook has reversed their policy here, as we predicted.  The outcry was enormous.  One source told us that the move was to shut down spammers who were using landing pages to do malicious things. Thus, Facebook hadn’t considered who else would be impacted by that action.

Had Facebook not woken up, our plan of action would have been to continue making automated pages, just focusing on the profile pic for customization. As for advertising, this would have hurt us a bit, since sending users to just the wall versus the landing page tab would have decreased conversion rates. This disaster narrowly avoided points to the risk to sitting on only one platform. In our role as an agency, we have to be wherever the traffic is, so we have to consider organic search, maps, and other ways to get traffic for our clients. Some folks in the Facebook forum have called me ignorant and incorrect in what I’m saying.

If they read the notes carefully and understand the impact, even if we are allowed to still create a landing page tab but NOT specify the default tab, the effect is almost the same. Specifying your homepage tab is just like specifying what is the homepage of your regular site. You know how you can have many tabs on your page, including ones not in the first six that are in the >> on the right? Those are effectively invisible– and that’s the point here. Your default tab setting is critical, as your homepage get most of your traffic.

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written by
Chief Technical Officer of BlitzMetrics. Data geek and dabbler in using ads to drive leads/revenue/traffic via marketing automation. Die hard Infusionsoft and Marketo fan.
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17 Responses to “Facebook deals a MASSIVE blow to small business”

  1. Reply Andrew Jones says:

    Dennis: You said developers “couldn’t create FBML pages”. Just wanted to clear up that wasn’t the case. You can still create FBML tabs, as well as add application tabs to fan pages. You just could no longer set one of those tabs as a “default landing tab”.

    That said, this morning, it seems they’ve switched it back. But for how long? Maybe they’re just looking for something else to monetize overnight and not tell us.

    More and more, I’m feeling we’re building sand castles on Facebook’s beach. They keep doing everything possible to erode what we’ve built and make us look bad to clients at every turn. My primary job is to build Facebook applications, but I’m about to write an article about why I believe Facebook is bad news and essentially ruining the web.

  2. Reply josh909 says:

    I just checked a new page page I recently worked on (http://www.facebook.com/johnfriedaaus) that has only 138 fans. Contrary to the above post i’m still able to add additional FBML boxes and tabs. The customised landing page still seems to be working for non logged in users as well though i’m not game to change this in case I can’t change it back.

  3. Reply Mark says:

    Viva diaspora p2p open source facebook/skype/etc replacement!

    Mark

  4. Reply Andy says:

    All of my Facebook Landing Pages are still live. and we done spend alot on advertising or have any with more than 4000 fans

  5. Reply Mike says:

    It is not affecting me. You should rereead the post you linked to as FBML pages ARE allowed. You just cannot make it your default landing page if the requirements are not met.

    • Reply Dennis Yu says:

      Hi Mike,

      Please read my note and Facebook’s response more carefully. To not be able to set a landing page tab is effectively the same. Plus, they reversed their decision.

  6. Reply Martin Maybruck says:

    Great post Dennis. Yesterday was a sad day for small businesses trying to compete in the huge online marketing & social media marketing space.

    It strengthens my marketing strategy with my clients of not putting all your eggs in one marketing basket. Diversity, diversity, diversity!

    Not to say that Facebook might not change it’s decision and that Facebook isn’t still a very powerful marketing and communication tool for small businesses.

    This now means more small businesses will need to quickly learn how to use Facebook ads to drive prospective Fans to a custom Tab.

    More money for Facebook. More expenses & work for small businesses to keep up.

  7. Reply kody wilcox says:

    I just made a fanpage to test this. I can make fbml pages and tabs..?

  8. Reply Facebook indifference at work again « Just wondering…. says:

    [...] losing the ability to create custom landing pages. Facebook later reversed their decision. Dennis Yu at Blitzlocal comment on the custom landing page change noting: this just underscores the risk of building your business on someone else’s website. [...]

  9. Reply Pat says:

    The larger problem is simply that Facebook is INDIFFERENT.

    Maliciousness is not required. Facebook is indifferent unless they suffer direct harm. Facebook is like the criminal who is sorry only when they got caught.

    More at my blog

  10. Reply cheryl says:

    Great post and discussion…especially from Andrew. I’ve posted your link to my friends so they are aware.

    Yes…this is bad for entrepreneurs and small businesses. This will also HURT many innovative designers who’ve done GREAT work on custom landing pages and embedding elements in them.

    Indeed…it’s a sad day.
    The 800 pound gorilla continues to throw its weight.

    No replacement in sight…YET.
    Maybe soon…

  11. Reply Jimmy Williams says:

    I am also one that teaches and keeps informing my clients about being diverse and staying in control of their own sites. Using social media and web 2 sites as support systems can only enhance what they are doing. This decision by facebook only emphasizes the point of being in the know and if you wanna play, you better play to win.

    Cheers,
    Jimmy R Williams
    The Methodical Marketer

  12. Reply Gail from GrowMap says:

    Step way back and look at the really big picture. The illusion that the major Corporations that contol the Internet, the media, the economies of every country and the governments too compete is just that – an illusion.

    There is a long range plan to favor big brands across the major sites. Only those that see them for what they are – what I refer to as “The Borg” will have alternatives in place as they continually squeeze the local and small businesses out.

    Read my comment in the SEOBook post that quotes Google’s CEO that the Internet is a “cesspool” and “Big Brands are the solution”. Then read my comment that Search Engine Land did not approve in their post about what many are calling the Google MayDay update.

    It has been obvious to me that these companies aren’t even trying to compete with each other since Yahoo! Search Marketing intentionally cratered their ppc engine and Microsoft / Bing launched an entry that was such a joke I actually heard large SEM companies tell their major clients if they wanted to advertise there they would have to do it themselves.

    When you are old enough you can look back and see how the media promotes them sequentially: Yahoo, Google, Bing….MySpace, Facebook, Twitter….the same way stock prices are manipulated to con traders out of their “investments”.

    There ARE solutions that I have offered in my post suggesting we must all support small businesses and in the post Dennis recently commented in which I’ll link to this comment. It is time to wake up and decide whether we want to keep playing in a big game that is fixed and take our chances or start or our smaller but more honest game.

  13. Reply Olivia Jade says:

    Thanks for the post! I’m still wondering if I should make a Facebook page for my product and I guess it would do no harm in trying it out, especially because of the low costs involved. I also came across some simple tips on how to utilize Facebook well for marketing or branding at http://blog.socialmaximizer.com/14-tips-for-marketing-on-facebook/

  14. Reply David says:

    Excellent post and discussion – I even liked the extra articles linked in the comments :) Facebook did reverse their decision in a hurry, and obviously for good reason!

  15. Reply Shivam says:

    how to change the landing page?
    i search for it on google most of the time but never found anything useful.

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